The specific expertise that the transaction advisor will need to have depends on the TOR. However, considering the general requirements of a typical PPP project, the transaction advisor may be required to have expertise in the following areas:
(a) Project planning expertise
• Project identification and structuring including incorporation of government's objectives;
• Economic and financial evaluation;
• Assessment of social and environmental impacts and mitigation measures;
• Assessing value for money of a PPP project;
• Designing of resettlement and rehabilitation programmes;
• Marketing of project.
(b) Financial expertise
• Development of a robust business case for the project;
• Identification of risks and assessment of their likely impact on the project outcomes, and development of an optimum risk-allocation arrangement between parties;
• Structuring payment mechanisms considering responsibilities, risks and rewards in respect of both parties;
• Analysis of the tender proposals received from the bidders, including scrutinizing the financial proposals and their implications for the government and verification of cost analysis and financial models; and
• Identification of and reviewing the contract clauses that have financial implications for the public sector.
(c) Legal expertise
• Preparation of the tender documents, PPP contract and applicable lease agreements;
• Ascertaining the best possible method of procurement or bidding following the government procurement rules/laws;
• Legal matters involving taxation, property right, building and planning regulations, environmental law, and legal provisions in any other relevant laws (such as bankruptcy law, competition law, etc.) that have implications and need to be considered in tender documents, and contract and lease agreements;
• Contract negotiation; and
• Legal aspects related to renegotiation of the contract and other agreements due to unforeseen circumstances.
(d) Technical expertise
• Defining technical and output/outcome specifications and standards for services to be procured;
• Formulation of safety and security standards and their compliance by the concessionaire/private party under contract;
• Technical evaluation of proposals and bids;
• Assessment of the capacity of private sector bidders to deliver the project and subsequently operate and manage it;
• Quality control during construction, assessment of technical risks and their mitigation measures, and contractor compliance;
• Formulation of appropriate performance measures and development of monitoring systems to determine performance.
It may be mentioned here that for a PPP project, more emphasis needs to be placed on output/outcome and service standards rather than specifying technical parameters of inputs.
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11. Some elements of this section are drawn from Ministry of Finance, Singapore, "Public Private Partnership Handbook", Version 1 (October 2004), accessed from http://app.mof.gov.sg/data/cmsresource/PPP/Public%20Private%20Partnership%20Handbook%20.pdf; and other sources.