Weekly insights on how to perform when it matters | High-stakes decisions. Real situations. No BS. | 👇JOIN +2k readers 👇
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Imagine you are building a hospital. Actually, make it two. Both under PFI contracts, aka, another acronym in the PPP world. One morning, your contractor goes into liquidation. That morning arrived on 15 January 2018. The contractor was Carillion. The hospitals were Royal Liverpool and Midland Metropolitan. Construction stopped. Unfortunately, patients could not be admitted to a PowerPoint explaining the risk allocation. Fortunately, only their taxes were claimed. The projects had to be rescued. Suddenly… everyone became very interested in a PPP question: “When the subcontractor cannot perform, what exactly can the project company do?” I love people saying: “The risk is back-to-back. We passed it down.” So cute. Just like my cat scratching the new leather sofa… The questions in the board meeting were probably like these: Does the subcontractor’s obligation cover everything you promised the client? Do you have the same deadlines? The same relief? The same rights to terminate? What security can you actually call? And how long will any of that take while the hospital sits unfinished? And you know what? The two PFI projects failed. Yes… Despite back-to-backs, security packages and everything… The government terminated the contracts and finished the hospitals the old way. Look. A “what if” exercise will not solve your problems. A back-to-back gap analysis will not make your contractor immortal. But it can tell you the right way to face these quiet Mondays… That is what I explain in the course below. Watch it while both contracts are still on your desk. It is considerably more relaxing than reading them for the first time after your contractor’s liquidator calls. 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. |
Weekly insights on how to perform when it matters | High-stakes decisions. Real situations. No BS. | 👇JOIN +2k readers 👇
You know those “premium” sofas in New Zealand? The ones that are so premium that are also suddenly 50% off? Wonderful news. Until you wonder what the original price was doing. Was I about to pay for a sofa? Or fund the retailer’s retirement? Or their kids going to Harvard? Now imagine that feeling in a procurement room. Well… I found a case that it’s the perfect example. 1976 General Electric was bidding to build part of PAVE PAWS, a US missile warning radar system. Its original price for the...
A train fails its final test. Normally, you fix the train. In Ottawa, they found another option. They changed the test. Just as Margaret Thatcher when she didn’t like her unemployment numbers… The context. In 2019, the city’s new light rail system was approaching opening day. The final trial was supposed to show it could run reliably before passengers got on board. The first three days exposed serious problems. Testing was paused. This is the point where a sensible person says: “Perhaps we...
The meeting had everything. An agenda. A board pack. Senior people. Weather conversations. Possibly biscuits. Coffee and tea. Potable sandwiches during the break. But… What it didn’t have… For years… … was the person appointed to protect the public interest. A chair. Welcome to one of my favourite PPP horror movies. Metronet. The company responsible for upgrading and maintaining large parts of the London Underground under a PPP. The issue is that Transport for London appointed a Partnership...
