The government project team is likely to require the support of a suitably qualified and experienced external financial or commercial adviser. Currently, merchant and investment banks and the leading accountancy firms make up the bulk of what may be termed financial advisers. A financial adviser should have direct experience with project financing and be able to explain the different risk and return expectations of different financial markets and instruments. A financial adviser would typically provide the following services, although not all of the following would necessarily be required on any given project:
• assistance with the preparation of the public private partnership business case, including advice on the development of the output specification, the public sector comparator and Abridged Partnership Model
• advice on carrying out risk analysis (including facilitation of risk workshops) and the identification, quantification and allocation of risk
• market sounding
• structuring and drafting the bid documentation to ensure good quality responses from the private sector
• ensuring the payment structures offer the optimum balance of risk and reward
• providing advice on the financial evaluation of bids, including the deliverability of funding structures (reviewing and checking the accuracy of the proponents' financial models and testing the robustness of the proponents' assumptions)
• providing financial advice and support during the period leading up to financial close.