PPP experiences from the Danish Building & Property Agency s perspective. Chief advisor and project manager Njal Olsen August 24, 2016

Transcription

1 PPP experiences from the Danish Building & Property Agency s perspective Chief advisor and project manager Njal Olsen August 24,

2 Agenda 1. The Danish Building and Property Agency 2. What PPP is in the DBPA 3. Lessons learned 4. The PPP perspective 2

3 The Danish Building and Property Agency (DBPA) We are a Property agency we build or let others build for us (for example PPP). The state's property manager and developer. We focus on clients, whilst ensuring the proper maintenance of buildings. A competent provider of advice on office space planning. Build effectively and fast to market price with a focus on quality, both in PPP and with the agency as the owner/provider. 3

4 What PPP is in the DBPA 4

5 PPP in Denmark Analysis consistently demonstrates that the Danish building sector could be more efficient and innovative. Successive governments have designated PPP as one of a number of means to improve efficiency. Guidelines followed by experience leads to improved guidelines. Subject to state building regulations (in competition with government construction works or leased contracts). 5

6 Why we are interested in PPP Our focus is both our client s needs and the proper maintenance of buildings. In Denmark PPP is not chosen as a means to raise funds, but rather for its inherent life cycle costing and risk allocation attributes. With rising constraints on public spending bundling or outsourcing of non core businesses can be attractive - e.g. construction works, running and maintenance. 6

7 Main drivers for the procurer Risk assessment and allocation. Focus on life cycle costing inherent to PPP, which is particularly relevant in relation to the emerging climate agenda (incentives in the payment mechanism ensures that the PPP supplier does not get to gain all the upside). 7

8 Our take on PPP No standard PPP-model since the model is adapted to the individual project, however : Contracts lengths years. Typically 100 pct. private ownership due to residual risk and tax issues Risks allocated to the party best equipped to handle or nullify them. Lease perspective with en bloc transfer of risks. Keep it simple (not just for the sake of the Public sector). Careful transition from traditional specifications to output specifications as output specifications do not secure outcome. 8

9 Implementing PPP Describe the features The PPP supplier provides the solution. Must be possible for the PPP supplier to optimize ie few demands with limited possible solutions. As regards the procurement rules, a PPP project does not differ from other forms of construction projects. So far 12 PPP-projects commissioned and one (large project) under construction. 9

10 Lessons learned 10

11 The construction phase All in all successful construction phase until commission and the first years of running/maintenance. Important that all parties are responsible and play their intended role To be the builder differs from just being the contractor. So far no delays or significant defects in the commissioned projects. We need to assert arms length in process more difficult than it sounds. 11

12 The operational phase Limited use of resources from client side. The day-to-day dialogue between tenants and the PPP supplier s operator is all-in-all working well as regards handling minor issues as they occur. The long-term contract benefits the relationship. Still a learning process in regard to the handling of more or less substantial building changes after commissioning. 12

13 The PPP perspective 13

14 We have come a long way Still a learning process. We have shown that PPP can be combined with good incentives for energy conservation. We still need to learn from the operational phases. PPP is just one way to provide the state with cost-effective office premises. 14

15 The next steps In order to further reduce transaction costs, increased knowledge of the PPP model is required. When the project is otherwise suitable, PPPs can provide very good results. Who will finance? Who will build, operate and maintain? 15

16 Challenges Requires competence at an advanced level for the contracting entity. Continued learning with regard to the handling of the inevitable need for structural changes after commissioning. The process of reducing payments to the PPP supplier due to defects in a building's functionality and/or facility management needs to be more operational. 16