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How Lenders Slow-Cook Mega-Projects to Death
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When you spend enough time in Europe, you usually end dealing with a bank. It’s as lovely as a tooth pain. The EU is the bureaucracy hell of the world. A place that tells you even how the cap of a bottle of coke must be… and of course, they did not think about any market testing or user case. What for? Well… Banks. You can’t live without them, but you hate them. Mastodonts with benefits. Shield by government. Too much money invested in lobbies… or finding imaginative solution to hide bribes to politicians… Anyway. In PPP, banks are gods… and you may end hating them too. Why? Several reasons… but if you can imagine that they are slow to approve you a mortgage… when you’re talking about a Change of 30-40 millions… they won’t be Speedy Gonzalez. One of the things that I had in the to do list when I did the refinancing of my last project in NZ was to modify the rights and time to review small changes. Trust me. You want to get rid of those rights and endless reviews. Or those guys that make the project possible will also make it impossible… or too slow. Killing it change by change. Temptation to step “out of the contract” will be inevitable. Trust me. You don’t want that. More in-depth tips, every week, about PPPs and more, in my mentorship. ​My Mentorship​ PD 1: If you liked this email, don't keep it in secret and forward it to a friend. They will thank you enormously one day. PD 2: If somebody has sent you this email and you want to receive emails like this yourself, visit vicentevalencia.com PD 3: If you want unsubscribe, click the link below. |
Vicente Valencia
I talk about Personal Growth, Management, Infrastructure and More | 👇JOIN +2k readers 👇
Still in the UK. Now, a hospital PPP. Large. Modern. Shiny. Hundreds of millions invested. Years of planning. Procurement. Financial close. Construction. Finally… The building was delivered. Or so everyone thought. The project was the Royal Liverpool University Hospital PFI project. New hospital. Supposed to open in 2017. There was only one small problem. The building could not be used. Fire safety defects. Structural issues. Incomplete works. Entire sections of the hospital had to be torn...
Everyone relaxes after the contract is signed. Lawyers celebrate. Sponsors shake hands. The press release goes out. “Landmark infrastructure project.” “World-class partnership.” “Long-term value for taxpayers.” Champagne. Photos. LinkedIn posts. Etc. In 2018 one of the largest PPP contractors in the UK, Carillion, collapsed overnight. Not struggling. Not restructuring. Collapsed. Gone. A tomar por cul0. The company was involved in dozens of PPP projects across the UK and beyond. Hospitals....
I hope you had not been in one of those… A meeting with a Power Point. Around 130 slides… Yes. One. Hundred. Thirty. Graphs. Tables. Appendices explaining the appendices. The speaker? Monotone. Boring. Like a GPS giving directions in the desert. A funeral seemed a fiesta in Ibiza. Slide 14… Slide 38… Slide 79… Around slide 92 something magical happened. One of the client directors fell asleep. Not metaphorically. Actually asleep. Head tilted. Eyes closed. The kind of sleep that says: “I’ve...