Nr | Question | YES | NO | User comments | Reference to MGDD | |
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III.B. Special purpose vehicle (SPV) The purpose of this sub-section is to consider some additional aspects that needs to be taken into account according to the rules specified in MGDD if the partner in a PPP/concession contract is a Special Purpose Vehicle (SPV) set up with some government involvement in it. This may be observed in the case of building innovative and complex assets that need the close cooperation with firms on technical matters. | ||||||
24 | Does the performance of the contract take place under the legal umbrella of an SPV? |
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| If the answer is "no", go to question 35. Normally, such a legal entity would have a definite life limited to the length of the PPP contract. It can be expected to have been created solely for legal purpose. | VI.5.2.2/15 |
25 | Does one or more private partners that are the operational contracting parties control the SPV? |
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| If the answer is "yes", there is no question as to the classification of an SPV as a non-government unit. | VI.5.4.1/76 |
26 | Does the board of the SPV consist wholly of non-government appointees? |
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| Even if the answer is "yes", the SPV may still not be autonomous. | I.6.2./7 |
27 | Is the SPV located in a country other than that of the activity in which it is engaged? |
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| The location of an SPV taking part in a PPP contract has no influence on treatment of such a PPP in ESA95. | I.6.2/9 |
28 | Does the SPV have the capacity to acquire assets and incur liabilities in its own right? |
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| VI.5.4.1/77 |
29 | Does the SPV have the capacity to enter into contracts with non-government units? |
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| VI.5.4.1/77 |
30 | Does the SPV have the freedom to take decisions concerning the management and disposal of its assets and liabilities? |
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| If the answer to questions 28 or 29 is "no", the SPV does not have the freedom to take decisions. Although SPVs are established to implement a contract, this does not automatically imply that the SPV does not have the freedom to take decisions. This could arise, for instance, if: i) the SPV does not have the right or capacity to actively manage its assets in response to market conditions (e.g. if government has the right to approve any significant disposal), or ii) there is a pre-arranged contract signed by government fully determining the SPV's operations. | I.6.2./4 |
31 | Can the SPV be considered to be an independent institutional unit according to national accounts? |
| on-balance sheet |
| If the answer to question 30 is "no", the SPV cannot be considered to be an independent institutional unit. In this case, it could be classified as an "ancillary" unit to government or deemed as acting on behalf of government, so that it might be more appropriate to say that the fees paid by government are not sales receipts for a "real partner", but just transfers within the general government sector. | I.6.3/12 |
32 | Are the government payments made to the SPV market-oriented? |
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| Market-oriented means of a similar kind to that observed between other market units, i.e. economically significant prices. A more detailed explanation is given in rows 17 and 18 and 19. | VI.5.4.1/74 |
33 | Does government bear only risks that an SPV would not normally be expected to bear? |
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| Examples of such risks are political or security risks. If the answer to questions 32 and 33 is "yes" the classification of the SPV as a government unit is not required, even when the SPV is 100% government-owned corporation. | VI.5.4.1/74 |
34 | Can an SPV be statistically classified in the non-financial corporation sector? |
| on-balance sheet |
| No, if the answers to questions 31 or 32 is "no". The answer is "yes" as long as it acts as a market unit (50% cost coverage criterion) and payments by government may be considered to be sales. If the answer is "no", the partner should be classified in the "general government" statistical sector, implying in any case that the project is on-balance sheet. | VI.5.4.1/77 |