A successful PFI & PPP asset contract expiry and transition involves a number of workstreams coming together. Following the contract handback provisions is an important part of this. Other activities are also needed to minimise the risks of achieving a subsequent exit from the investment.
Planning and scoping for the delivery of surveys and compliant assets as well as all of the associated data, documents, and know-how is the first stage in this process. The time invested in a collaborative planning exercise will pay dividends throughout the handback process.
Life of a Special Purpose Vehicle
Throughout its life a Special Purpose Vehicle (SPV) or Project Company has various responsibilities to meet. The activity needed for expiry, both before and after the handback date, overlays with other activity streams.
The earlier planning commences for this activity on PPP contracts, the more optimised the handback process will be.
Our six-step handback process
We have developed a six-stage methodology for managing a successful handback. The approach is designed to ensure the SPV delivers its obligations on PPP Contracts while also supporting the requirements of the public sector as they plan for the future.
In following our tried-and-tested handback process, you will feel reassured that we can manage the transition, guide your strategic thinking, and inform your decision making.
From the beginning of the handback process (and throughout), collaboration is key. In scoping what action is required throughout each stage, together we can identify and address any issues as efficiently as possible.
Different PPP contracts have different contractual requirements. Our first action will be a deep dive review of these requirements, risks and opportunities, and we will output a comprehensive briefing paper including a timeline of obligations.
By understanding the framework and scoping the activity required we can then bring the right focus to the technical workstream, including surveys and the asset register, among many other matters.
Where a handback survey is to be undertaken, the appointed surveyor should carry a duty of care to the Contracting Authority and the Project Company. To ensure that all parties accept responsibility for the outcomes, we engage on the procurement process and appointment criteria to ensure all parties have confidence in those appointed for the survey. We then support the surveyor throughout their work, keeping close to any practical challenges and resolving any issues as they arise.
Once the survey is complete we will review the results and establish what needs to be delivered, how and by whom. Our technical and commercial skills will ensure this is planned in the most effective manner.
The survey is an important part of the expiry process, to establish the condition of assets and any works required. There will be various other items that need to be considered, which we address with an agreed handback plan. These can include the transfer of personnel, documentation, stock, equipment and warranties. We can mediate between parties as an honest broker to find a fair route to value for all and ensure the agreed position is appropriately documented.
As contracts reach their expiry, we look at how to deliver what is needed to ensure a seamless transition. At this stage, the final handback plan will have been established and we will have identified responsibilities for delivering the remaining contractual and technical obligations.
The delivery, monitoring and sign-off of the asset will follow an agreed handback process, which Vercity will closely manage. The sign-off will run in parallel with all the necessary project information being finalised and prepared for transfer.
Post Concession Management
Handback is not the end. Following expiry of PPP contracts, the SPV will enter a new phase of management, requiring a clear understanding of how to discharge any post concession responsibilities.
Working with external advisors Vercity will ensure that these responsibilities are identified and managed, and support strategies for the eventual exit from the investment.