Key Factors in identifying stakeholders in a PPP project

  1. Stability:
    The public party should be in a position to guarantee a stable framework for development over the lifetime of the project. The respect of the legal provisions of the original contract and the principles under which it was granted is extremely important for the private party and its financiers if they are to „trust‟ the public party. This is not only important for existing projects, but for future ones, as any further changes in the legal or regulatory framework may be perceived as an additional risk and priced accordingly in later deals.
  2. Transparent bidding process:
    The public authority should make sure that the bidding process is open and transparent in order to encourage competition and, therefore, to increase the chance of finding an appropriate private partner and optimise the outcome of the project.
  3. Expectations of the private party:
    Governments often have unrealistic expectations regarding the performance of the private party, such as levels of service that are significantly higher than those on the rest of the network. This may result in potential private partners being reluctant to join the PPP.
  4. Traffic demand forecasts:
    The success of many PPPs is often directly linked to traffic demand. Therefore, an accurate forecast of traffic demand is an extremely important element, as discrepancies between real and expected demand can make it harder to meet financial liabilities, which might in turn lead to the failure of the project.
  5. Concession duration:
    The duration of the concession should be determined on the basis of the particular conditions of the project in order to optimize cash flow and debt repayment. Optimizing the concession duration is necessary for a balanced approach to the distribution of risk and finance between the public and private parties.
  6. Clear objectives:
    The public authority should specify its objectives for each specific PPP scheme. This will make it easier to make a balanced decision in terms of the distribution of risk and finance, to build an efficient partnership with the private partner, and to assess the final success of the scheme.
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