Consider a public sector organization (the Authority) that wants to adopt the best approach for upgrading its decades-old wastewater treatment plant.
The water/wastewater PPP market has matured considerably in recent years, with numerous deals with various types of procurement structures having been completed. The Authority wants to make sure it understands all the options currently available for designing, building, financing, operating and maintaining a new plant-and of those, which is best suited to this particular project at this point in time and for the future.
The Authority wants to retain ownership and control of the facility, which immediately rules out fully privatized delivery options. So Authority officials must conduct a bottom-up analysis that looks exclusively at the following project components: design, finance, construction, service operation and ongoing maintenance. It must also look at which party might be best able to manage each component.
The overarching goals that guide this analysis include the Authority's desire to achieve an optimal risk transfer and its wish to weigh the benefit of paying construction costs up front or over the life of a project.