aashto construction sub-committee annual meeting virginia beach adrian sheppard director for ppp and...
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AASHTO AASHTO Construction Sub-Committee Construction Sub-Committee
Annual MeetingAnnual Meeting
Virginia BeachVirginia Beach
Adrian SheppardAdrian Sheppard
““Director for PPP and Asset Management”Director for PPP and Asset Management”
11stst August 2011 August 2011
Delivering Highway Services Delivering Highway Services through through
The Portsmouth PFI experienceThe Portsmouth PFI experience
OverviewOverview
Background to the Contract - Funding Background to the Contract - Funding issuesissues
Contract Structure & ControlsContract Structure & Controls Contract EfficienciesContract Efficiencies Delivery through the Core Investment Delivery through the Core Investment
PeriodPeriod Transition into the Life Cycle Replacement Transition into the Life Cycle Replacement
PeriodPeriod
The City of PortsmouthThe City of Portsmouth
Unitary Authority - Unitary Authority - 19971997
Population 190 000Population 190 000 Predominantly UrbanPredominantly Urban Gateway to EuropeGateway to Europe Total Road Length Total Road Length
455km455km• PRNPRN 66km66km• SRNSRN 94km94km• TRNTRN 295km295km
84 Structures84 Structures 20 000 lighting units20 000 lighting units
Key IssuesKey Issues
Strategically important cityStrategically important city Cyclical peak traffic flowsCyclical peak traffic flows Residential and business pressuresResidential and business pressures 27 Political Wards27 Political Wards Competing needsCompeting needs
Key IssuesKey Issues
Road Condition Road Condition 48% failed or critical48% failed or critical Insurance ClaimsInsurance Claims Public DissatisfactionPublic Dissatisfaction Insufficient fundingInsufficient funding Lack of investmentLack of investment Other prioritiesOther priorities
Bid ProcessBid Process
• OBC Outline Business Case
• EOI Expression Of Interest
• PQQ Pre-Qualification
• ISOS Outline Solutions
• ISDS Detailed Solutions
• ISRS Refined Solutions
• CFT Final Tender
• PB Preferred Bidder
• FC Financial Close
The HighwayThe HighwayMaintenance ProjectMaintenance Project
• Ensign Highways LtdEnsign Highways Ltd• 25 year Contract25 year Contract• 5 year CIP5 year CIP• $850m $850m
Core Investment Period 5yrs $100m
Life Cycle Replacement 20yrs $80m
Operations & Maintenance 25yrs$670m
Total $850m
Contract ValueContract Value
AdvantagesAdvantages
Transfer of risk to service companyTransfer of risk to service company Local authority gains non-refundable Local authority gains non-refundable
grant from the Government to help grant from the Government to help with the cost of borrowing with the cost of borrowing
Service budget is ring fenced and Service budget is ring fenced and certaincertain
Significant and guaranteed Significant and guaranteed improvements in network conditionimprovements in network condition
Hand-back in a guaranteed condition Hand-back in a guaranteed condition with residual lifewith residual life
Exclusions fromExclusions fromthe Contractthe Contract
Urban Traffic Control SystemsUrban Traffic Control Systems Bus StopsBus Stops Refuse CollectionRefuse Collection Coastal ProtectionCoastal Protection Retained Highways FunctionsRetained Highways Functions Abandoned VehiclesAbandoned Vehicles Other City Council ServicesOther City Council Services
Key PrincipleKey Principle
Design, construction and operation risk Design, construction and operation risk transferred to the Service Providertransferred to the Service Provider
No third party claims to PCCNo third party claims to PCC
““Fence to Fence” ConceptFence to Fence” Concept
Shared RisksShared Risks
Major Structural Repairs Major Structural Repairs • BridgesBridges• Highway drainageHighway drainage
Change in StandardsChange in Standards Other Network Changes Other Network Changes Insurance- Total Loss of the Network Insurance- Total Loss of the Network Interest Rate Risk Interest Rate Risk Inflation Risk Inflation Risk Force MajeureForce Majeure
PFI Credit Project Agreement Facility Agreement Sub-Contract
DEPARTMENT FOR
TRANSPORT
PORTSMOUTH CITY COUNCIL
INDEPENDENT
CERTIFIER OWEN WILLIAMS
ENSIGN HIGHWAYS LTD
SPV SHAREHOLDERS
COLAS SA AND COLAS LTD
COLAS LTD
PORTSMOUTH BUSINESS UNIT
LLOYDS TSB
TECHNICAL ADVISERS
ATKINS
StructureStructure
Role of the SPVRole of the SPV
The SPV is the interface between all The SPV is the interface between all parties to the project:parties to the project:
• The Public Authority and their advisorsThe Public Authority and their advisors• The Lenders and their advisorsThe Lenders and their advisors• The Contractor and their advisorsThe Contractor and their advisors• The Sponsors and their advisorsThe Sponsors and their advisors
Role of the SPVRole of the SPV Core tasks for the SPV management Core tasks for the SPV management
function include:function include:
• Develop and deploy processes, systems and Develop and deploy processes, systems and procedures procedures
• Technical and commercial risk assessment and Technical and commercial risk assessment and managementmanagement
• Financial reportingFinancial reporting• Performance monitoringPerformance monitoring
Role of the SPVRole of the SPV Core tasks for the SPV management Core tasks for the SPV management
function include:function include:
•Management of funding arrangementsManagement of funding arrangements•Contract profile and promotionContract profile and promotion•Dispute managementDispute management•Partnership developmentPartnership development
Scope of WorkScope of Work RefurbishmentRefurbishment Winter maintenanceWinter maintenance Periodic maintenance Periodic maintenance Sweeping & cleansing Sweeping & cleansing Third party claimsThird party claims Statutory UndertakersStatutory Undertakers Network ManagementNetwork Management
Fence to Fence
Payment MechanismPayment Mechanism Usage Payment = Shadow toll (10%)Usage Payment = Shadow toll (10%) Availability Payment = Monthly lump sum Availability Payment = Monthly lump sum
(90%)(90%) Deductions (Performance based)Deductions (Performance based)
65%12.5
100%
18.6
MaintenanceInvestment period
20 yrs5 yrs
NCI AP
MonitoringMonitoring
SurveysSurveys InspectionsInspections Internal AuditsInternal Audits PCC Independent CertifierPCC Independent Certifier Bank’s Technical Advisor Bank’s Technical Advisor Residents / City Help DeskResidents / City Help Desk CouncillorsCouncillors NewspapersNewspapers
Liaison and Dispute Liaison and Dispute Resolution ProceduresResolution Procedures
Progress Meeting Operational Meeting
Network Board
‘Principals’
‘Expert’
Progress Meeting Operational Meeting
Network Board
‘Principals’
‘Expert’
• Service Points
• Warning Notice
• Contract Termination
Default Notice PeriodsDefault Notice Periods
R & DR & D Pavement designPavement design
Project and Project and Construction Construction ManagementManagement
Model DevelopmentModel Development Products & bindersProducts & binders Recycling Recycling
& Environment& Environment
Expertise & InnovationExpertise & Innovation
Performance MeasuresPerformance Measures Number of public enquiriesNumber of public enquiries
Performance MeasuresPerformance Measures
Performance MeasuresPerformance Measures
Performance MeasuresPerformance Measures
Performance MeasuresPerformance Measures
Performance MeasuresPerformance Measures
Performance MeasuresPerformance Measures
Efficiency SavingsEfficiency Savings Investment at right timeInvestment at right time Combined Maintenance/Improvement Combined Maintenance/Improvement
SchemesSchemes Maintenance/Capital Works/Cleansing Teams Maintenance/Capital Works/Cleansing Teams
interactinteract Shared OfficeShared Office Joint Training InitiativesJoint Training Initiatives Seeking InnovationSeeking Innovation Better management of Utilities activitiesBetter management of Utilities activities
Efficiency SavingsEfficiency Savings Integrating design with constructionIntegrating design with construction
▪▪ Improved buildabilityImproved buildability
▪▪ Better budget managementBetter budget management
▪▪ Speedier construction processSpeedier construction process
▪▪ Better interface managementBetter interface management
▪ ▪ Improved responseImproved response
Public Satisfaction 2005Public Satisfaction 2005 4Ps Excellence Award 20064Ps Excellence Award 2006 IHT Effective Partnership Award 2008IHT Effective Partnership Award 2008 Other Local Authorities in UK following modelOther Local Authorities in UK following model Public Satisfaction 2008Public Satisfaction 2008 Highways Partnership Awards 2009Highways Partnership Awards 2009 ICE Award 2010 - Best Community Project ICE Award 2010 - Best Community Project
RecognitionRecognition
58%
13%
45%
0%
20%
40%
60%
Satisfied Dissatisfied Net satisfaction
Satisfaction with Colas' work
Mayfield SchoolMayfield School Tidy SchoolTidy School The News “We can do it”The News “We can do it” PCC Tidy campaignPCC Tidy campaign Portsmouth in BloomPortsmouth in Bloom Brunel commemorationBrunel commemoration Kid safeKid safe University of PortsmouthUniversity of Portsmouth
Local CommunityLocal CommunityInvolvementInvolvement
THANK YOUTHANK [email protected]@colasinfrastructure.com