Vertical Integration

Brien Desilets, an expert in project finance of Claret Consulting, LLC, an economic and project finance consulting firm specializing in developed and emerging markets, discussed the European model of "bundling", projects during an enlightening phone conversation on February 17, 2010. In the United Kingdom, individual projects under ₤20 million (about $30 million US) aren't considered for PPP projects. Per Desilets, the PPP finance baseline justifies the lengthy procurement process and transaction costs.

Grimsey and Lewis further explore the concept of "bundling", and vertical-integration where project size is maximized for economy of scale and PPP structure includes as many aspects of design/build/ finance/operate and maintain as possible.

Instead of doing one school in a district, all schools could be bundled into a vertically integrated turnkey project where everything but the teaching would be supplied by the private sector. The idea of broadening scope and increasing size could lead to different models in the United States involving new structures, teaming arrangements and financing vehicles.