Term | Meaning |
The mechanism by which a private partner in a PPP arrangement is often compensated. According to performance standards specified in a project agreement, an ASP is paid to the private partner for capital and operating costs, as well as their required rate of return, over the term of the agreement. | |
Money lent by a bank that is often secured by the assets of the project and that is usually the most senior claim against project cash flows. | |
A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money. The issuer is required to pay a fixed sum annually until maturity, at which time a fixed sum to repay the principal is made. | |
Document prepared in British Columbia by a project owner demonstrating the need and cost/benefit of a project, in addition to supporting a procurement method and providing an overview of the accounting impacts that a project may have. | |
A circumstance where competitive advantages that typically accrue to government as a result of public sector ownership are neutralized through a series of adjustments that permit a fairer comparison of non-public sector alternatives. | |
A rate used to relate present and future dollars. Discount rates are expressed as a percentage and are used to reduce the value of future dollars in relation to present dollars. This equalizes varying streams of costs and benefits, so that different alternatives can be compared on a like-for-like basis. | |
An efficient market is one in which securities prices reflect all publicly available information. This means that every security traded in the market is correctly valued given the available information. | |
The point in the procurement process where negotiations with a preferred proponent are finalized and a project agreement is executed, allowing construction to begin. | |
A payment made to unsuccessful short-listed bidders in a request for proposals process as partial compensation for expenses incurred in submitting a compliant proposal. | |
Independent, third party certifiers engaged by the project owner to verify and certify whether the conditions of the project agreement are being satisfied. | |
Drawings of a project that are indicative of a possible solution that would meet the requirements of a proposal call. Indicative designs serve several purposes including: • Allowing users to visualize what a design could look like, • Providing a basis for estimating costs, and • Serving as a starting point for bidders to develop their own, more detailed competing designs. | |
The decision by an owner to invest in a particular project as a means of addressing their service delivery needs. | |
The long-term requirements to maintain and rehabilitate an asset. | |
A process used to assess the market's reaction to a proposed project and or procurement approach by providing an opportunity for market participants to provide input in terms of interest, capability and capacity. The objective is to structure a project in a manner that will encourage competition by generating a favourable market response. | |
NPC refers to the value of periodic future cost outlays when they are expressed in current, or present day, dollars by discounting them using the Discount Rate. | |
The ongoing processes or activities of a practical or mechanical nature that are involved in running a facility, such as janitorial services in a building or snow removal on a roadway. | |
Specifications developed by the owner that define the output and performance levels required in relation to construction and life cycle performance of an asset, to ensure the completed project satisfies the objectives of a project with respect to meeting the owner's service delivery needs. | |
Usually a provincial ministry, authority or agency that is undertaking a needs assessment and benefit analysis to determine if a project will satisfy service delivery requirements, and that will own the project and fund the annual service payments if a project proceeds as a PPP. | |
A contingency fund reflecting the value of risks retained by the owner that is recommended to be included in the financial model, project budget and funding analysis. | |
Public private partnership whereby public sector infrastructure is procured using a long-term performance-based agreement with a private sector partner to deliver and maintain an infrastructure asset, including significant, upfront capital investment. | |
A proponent selected from a short-list of bidders to enter into negotiations with a project owner to reach financial close and deliver a project. | |
The decision by an owner to procure a project in a particular way in order to achieve value for money. | |
The project agreement sets out the requirements for the delivery of an asset under a PPP in terms of cost, schedule and life cycle performance that typically govern the performance-based payment of the ASP to a private partner. | |
The public sector comparator, which is a financial model of a hypothetical public sector reference concept used in quantitative procurement analysis to compare the risk adjusted, life cycle cost of traditional delivery with the cost of procuring the same project as a PPP. | |
Risks associated with delivering a project that are not transferred to the private partner under a PPP, representing a cost to the project regardless of the procurement approach. | |
Document issued by an owner for qualified proponents to submit formal proposals to deliver a project. | |
Document issued by an owner inviting parties interested in participating in an RFP, to submit their qualifications for delivering a project. | |
Risk Management Branch (RMB) is the enterprise risk management agency within the B.C. Ministry of Finance that advises on risk management issues, reviews and approves indemnities given by government, and assists ministries in establishing their own comprehensive risk management programs. | |
Primary tool used to identify, assess and manage project risks based on the following major components of risk: • Category • Description • Rating • Valuation • Allocation • Treatment | |
A financial model developed to represent the procurement of a project using a PPP approach. The Shadow Bid is used to develop a cost estimate to be compared to the PSC as a means of evaluating potential differences in the present value of the risk adjusted costs between traditional and PPP procurement. | |
Methods by which the public sector has traditionally procured projects in B.C, through design bid build (DBB), or a combination of DBB and design build (DB) contracts. | |
Risk associated with delivering a project that is typically borne by the public sector under traditional procurement, that is transferred to the private sector under a PPP. | |
Also commonly referred to as value for taxpayer dollars, VFM describes the benefits to the public expected to be realized through a particular procurement method, and can be quantitative and/or qualitative in nature. Quantitative value for money is achieved through lower cost of a particular procurement method, whereas qualitative value is achieved when a particular procurement method better supports the goals and objectives of a project without necessarily costing less. |