Public-Private Partnerships (PPP) | KPMG | BE

Public-Private Partnerships (PPP)

Public-Private Partnerships (PPP)

Realizing a successful infrastructure project through a PPP.

Realizing a successful infrastructure project through a PPP.

Public-Private Partnerships (PPP) create new opportunities for the development of public infrastructure. Through funding provided by the private sector, the public sector is relieved of some of the upfront financial burden. And private entities gain access to new fields and projects, creating new long-term asset classes.

To be successful in a PPP, both sides need proper management and advice to help determine risks, find their identity within the partnership, and leverage value from the deal. 

Our team is ready to guide you through each stage of the PPP, providing clarity, and helping you efficiently manage your contracts and projects.

The Challenge

All across the globe, public authorities are facing high needs for the construction and maintenance of large infrastructure projects. Public-Private Partnership (PPP) structures provide alternatives to classic tendering methods in order to catch up with these needs and to cope with restricted government budgets.

In order to make a PPP project a success, a clear contractual risk and task allocation is of primary importance. The partners involved must work together on the project, while maintaining their own identity. 

Public Sector Services

Government authorities must create a commercial framework for their investment programs that attracts the interest of a competitive bidding environment. Our multidisciplinary PPP team provides robust resources, recognized expertise, and key negotiation strategies to address all stages of the development of a project:

  • Initiation stage: application of PPP project feasibility screening methodology (e.g. Public Private Comparator), risk allocation, drawing up the business case, preliminary financial assessment 
  • Structuring stage: choice of contractual structure (DBF, DBM, DBFM, DBFMO, …), shadow-bid modelling, award criteria, assessment of penalty points 
  • Selection stage: assistance to the public tendering process, development of public procurement documents, qualitative and quantitative evaluation of submitted bids 
  • Negotiation stage: negotiations with bidders and lenders, support at financial close

Private Sector

Bidders must select their targets carefully and then seek to deliver the most competitive bid possible. Our multidisciplinary team delivers creative and winning solutions, and comprehensive negotiation strategies throughout the development of a project:

  • Commercial considerations: bid strategy, commercial term development and negotiation, risk analysis and allocation, payment mechanisms 
  • Financial analysis: corporate structuring, analysis of capital structure sensitivities 
  • Financial modelling: outstanding financial modelling techniques combined with various scenario and sensitivity analysis for financial close models as well as for operational models; 
  • Finance strategy: optimal capital structure assessment, development of term sheets, organization of funding competition, negotiations with lenders, set-up of bond solutions 
  • Tax analysis : VAT, transfer taxes, corporate income tax 
  • Providing help in understanding the public sector way of acting, procurement advice and negotiation techniques with public sector bodies 
  • Supplemental resources: accounting, tax optimization, model audits 

Benefits

As a member of the worldwide operating Global Infrastructure and Projects Group, our team possesses hands-on experience in: conceptualizing, structuring, negotiating and implementing successful PPPs.

We help our clients, both from the private as well as from the public sector, simplify the PPP process.

Our multidisciplinary team is ready to help you in each stage of your project, and based upon your individual project needs. We will select the most experienced people to provide you with quality assistance to realize your project. 

Our Projects

Our team has been involved as the financial, legal, tax or accounting advisor in the majority of the large PPP infrastructure projects in Belgium over recent years.  We have experience in all major infrastructure domains where PPP has proven its added value: infrastructure for public administrations, education, recreation, parkings, healthcare, (social) housing, safety, roads, and railways.

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