PPP PFI, Economics, Contracts and Private Sector Finance
About Course
Course Overview:
Private Finance Initiatives (PFIs) are methods of providing funds for major capital investments. In such arrangements, private sector organisations are contracted to design, build, finance, manage and operate (in part or whole) public projects, mainly infrastructure projects of roads, highways, hospitals, schools, etc.
Under Private Finance Initiatives, the private sector company handles costs, with its services leased to the public sector; the public sector, in turn, pays the private sector organisation annually. In PFIs, instead of receiving direct benefits of funding, private sector companies earn through long-term investment and returns from the project.
PFIs are intended to increase project efficiency and ensure timely completion and to share risks. Financial advisors, such as investment banks, manage the bidding, negotiation and financing processes for these initiatives. Such initiatives are carried forth with the aim of sustenance because termination procedures for such agreements are complex.
PFIs help governments respond to the requirement of greater capital investment in public infrastructure. They have enhanced forms of government contracting or outsourcing, which could yield greater efficiency and value for money. The consortium in such arrangements is guaranteed full return of costs and interests, as well as return on investments.
The returns could be all or a percentage of the revenue collected for the service. On the other hand, the government may pay a periodic fee for the services. While such arrangements have many advantages, especially those related to service quality and efficiency to citizens, there are a few significant drawbacks. One of these is the increased burden on taxpayers for interests and associated payments.
Payments to the private sector could sometimes include not only construction costs but also maintenance costs post-construction, thus increasing overall costs incurred by taxpayers. Nevertheless, given the advantages of Private Finance Initiatives to the success of public sector projects and the related cost implications that need to be looked into keenly, public as well as private sector employees needs to understand private finance initiatives thoroughly to make the best of such initiatives and address and mitigate the cost-related risks.
This RTI training course will empower you with a thorough understanding of Private Finance Initiatives and their related benefits to the successful completion of public sector projects. The modules of this course cover various aspects of PFIs, which will not only help you understand the advantages of PFIs but also prepare you to minimise challenges and effectively manage these to ensure timely and good-quality public sector project completion.
The knowledge and information gained through the course will enhance your skill set, particularly in private sector finance, which will help you demonstrate sound decision-making capabilities related to investments and financing for your organisation. In turn, this will provide you the opportunities to undertake more challenging and important roles within your organisation and partake in critical and sensitive decisions to ensure timely project completion and good service delivery to citizens.
Course Objectives
The main objective of this PPP PFI, Economics, Contracts and Private Sector Finance course is to empower the public and/or private sector professionals with:
- In-depth understanding of PFIs, related principles, techniques, strategies, advantages, challenges, etc
- Knowledge of tools and techniques to make the best use of PFIs and effectively manage related risks
- The required understanding of when to use or opt for PFIs for public sector projects
- Adequate awareness as well as skill to mitigate, or at least reduce, increase in taxpayer costs because of PFIs
- The required confidence, skill, and capability to drive PFIs or proposals for PFIs in the organisation
- The required experience, knowledge, and skill to influence or be part of the consortium responsible for managing the terms and conditions of contracts and agreements for such associations
- A sense of pride and satisfaction from playing a pivotal role in the increase in customer satisfaction through on-time project completion with high quality
Training Methodology
Regewall Training Institute customises each of its courses to suit the training audience and their professional backgrounds. Classroom sessions with presentations, as well as group discussions, troubleshooting for questions, group activities, projects, etc.
ensure two-way participation in the course. Trainees are also encouraged to share their experiences related to PFIs, and issues, concerns and best practices are discussed in detail by the trainer.
Like all Regewall Training’ courses, this course follows the Do–Review–Learn–Apply Model.
Organisational Benefits
Public and/or private sector organisations, whose employees attend this course, will receive the following benefits:
- A workforce that is more skilled and equipped to handle and make decisions with regard to PFIs
- Better initiation and management of PFIs
- More appropriate decision-making with regard to the type of public sector projects that should make use of options like PFIs
- Better management of public services and projects because of advanced technology, skill, and resource utilisation from the private sector through the knowledge gained from the course
- Better risk management because of a balanced understanding of possible risks and liabilities and their appropriate sharing among partners
- Reduced costs because of long-term funding through effective use of PFIs
- Timely completion of public sector projects with good quality
- Increased customer satisfaction because of better services and timely completion of critical public sector projects
Personal Benefits
Public and/or private sector professionals undertaking this course will benefit in the following ways:
- Better understanding, awareness and knowledge of PFIs and the related principles and theories
- Enhanced skill and capabilities to play a pivotal role in PFIs and related negotiations and dialogue
- Greater opportunities and platforms to demonstrate potential and talent to perform more challenging and critical roles and responsibilities in one’s organisation
- Better decision-making skills about projects that need financing instruments like PFIs
- Increased exposure and experience across both sectors, thus expanding one’s scope for career growth and development
- Extreme satisfaction from fostering greater customer satisfaction by facilitating necessary financing instruments for critical public sector projects to be completed on time and of good quality
Who Should Attend?
- Members of the top management of public and private sector organisations responsible for making decisions about financing options for public sector projects
- Financers and other banking officials are involved if such initiatives are opted for in project completion
- Contract managers who play important roles in developing, negotiating, and managing PFI contracts
- Tax authorities to manage or monitor costs and taxes incurred by taxpayers as a result of PFI’s
- Legal authorities and compliance experts to ensure that all contracts and agreements abide abiding the law and comply with expected universal standards
- Any other private or public sector professional who is part of agreements related to PFIs or who would like to play ra oles in PFI associations
Course Outline:
The PPP PFI, Economics, Contracts, and Private Sector Finance course will cover the following areas that are critical to understanding PFIs and Public Sector Finance thoroughly:
Module 1 – Parties Involved in Private Finance Initiatives (Private Finance Initiatives)
- Awarding authority
- Special purpose vehicle
- Third-party funders
Module 2 – Steps in Private Finance Initiatives
- Establishment and definition of service need
- Assessment of PFI applicability
- Tendering and negotiation process
- Contract negotiation with the preferred bidder
- Construction by a private consortium
- Private supply of public service
Module 3 – Key Principles of Private Finance Initiatives
- Purchase of services not assets
- Value-for-money to public sector
- Project risk management between the private and public sectors
- Utilisation of private sector expertise and know-how
- Incorporation of whole life costing in infrastructure projects
Module 4 – Key Drivers of Value-For-Money in Private Finance Initiatives
- Risk transfer from the public to the private sector
- Long-term nature of contracts
- Output-based service specifications
- Reduced costs of capital and services (competitive bidding)
- Performance assessment for private sector accountability towards results
- Increased operational efficiencies and skill
Module 5 – Advantages of Private Finance Initiatives
- Long-term relationship
- Public saving
- Private profit
- Better management skill
- Long-term contract
- Risk transfer
- Less construction time
- Delivery against budget
- Innovation approach
Module 6 – Disadvantages of Private Finance Initiatives
- High transaction and service costs
- Distortion of priorities
- Time-consuming process
- Unbalanced risk allocation and ownership
- Lack of expertise
- Government influence
Module 7 – Types of Private Finance Initiatives Projects
- Free-standing projects
- Joint ventures
- Services sold to the public sector
Module 8 – Private Sector Financing Sources
- Debt financing
- Equity financing
- Merchant bankers
- International trade financing organisations
- Specialised financial institutions
- Insurance companies
- Commercial mortgage
- Lenders