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PPP reality: what banks do care about
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You hear this word a lot in PPP meetings. Bankable. “This contract must be bankable.” Everyone nods. No one asks the obvious question. What does bankable actually mean? Let me translate. A PPP contract is bankable when a bank can look at it and say: “Fine. If everything goes wrong… we still get our money back.” That’s it. Not innovation. Not sustainability. Not beautiful PowerPoints. Money back. In Question 50 of the course below, I explain what really makes a PPP contract bankable. Because most agencies focus on the wrong things. They discuss architecture. Design. Even landscaping. But banks don’t finance landscaping. Banks finance certainty. Certainty of payment. Certainty of risk allocation. Certainty that the project company will survive a crisis. If those three things are weak… The contract is not bankable. And if the contract is not bankable… Your PPP is just a very expensive academic exercise. If you want to understand what banks actually look for before lending hundreds of millions… Go to Question 50 in the link below. ​The 100 Q&A You Must Know about PPPs​ 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 👇
Innovation is one of the biggest fallacies in construction and PPP contracts. Governments love the word. It appears in every PowerPoint presented to ministers, investors and journalists. Innovation. Innovation. Innovation. But what exactly is innovation? A toilet that cleans your as$ with a water jet and eliminates toilet paper. Innovation? Maybe. Maybe not. It depends. In Question 28 of the course below, I explain how “innovation” actually works in PPP bids. How to win points if you are...
One of my fauvorites… A toll road PPP. Beautiful business model. Traffic studies. Economic growth projections. Sophisticated demand modelling. Consultants everywhere. Like queuing for free ice-cream… The road opened in 2007. The project was the South Bay Expressway SR‑125 toll road. Everything looked perfect on paper. Except for one small detail. Drivers. They didn’t show up. The financial model predicted tens of thousands of vehicles per day. Reality? Sometimes traffic was 70–80% lower than...
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...