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I once said that Preferred Bidder is the most dangerous moment in a PPP. It’s like the moment that the shark attacks in Jaws… just when you expect it less… Everyone relaxes. Champagne glasses appear. LinkedIn posts multiply. “Proud to be part of the winning consortium.” Then reality walks into the room. Let’s talk about the Malaysia–Singapore High Speed Rail. A mega rail PPP. 350 km. High-speed trains. Two countries connected. Estimated cost: $15-20 billion. The type of project ministers love. The type of project bankers pretend to understand. And the type of project consultants love even more. Years of planning. Money is abundant… so… Advisers everywhere. Technical studies. Financial models. Risk matrices. The usual circus. Consortia formed. Global contractors. Japanese groups. European operators. Infrastructure funds. Everyone sharpening their pencils… or their Excel files. Hundreds of millions spent preparing bids. But then… Politics entered the room. A new government in Malaysia. Suddenly the project was “too expensive”. Negotiations started again. And again. And again. While everyone was pretending the deal was still alive. Eventually the inevitable happened. The governments announced the project was cancelled. No financial close. No trains. Just a few hundred million dollars in advisory fees and bid costs evaporating into the atmosphere. Don’t celebrate the wrong milestone. Expert bankers and advisors celebrate Financial Close… and it’s for a reason. But experienced people know the real milestone. The first train carrying passengers. Until then? Anything can happen. Including a government waking up one morning and saying: “Actually… we changed our mind.” Don’t be caught in situations like this one… check 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 👇
Some of the worst PPPs in the world come from capital cities trying to look impressive. Huge buildings. Architectural statements. Politicians cutting ribbons. And budgets exploding. But some of the best PPPs? They come from places nobody talks about. Take Ferguson Place Recreation Centre PPP. It sits in Fort St. John, Canada… Oh Canada! Population: about 21,000 people. Not exactly Tokyo. The city needed something simple: A recreation centre. Swimming pools. Ice rinks. Fitness facilities....
A toll road. In one of the richest regions of Europe. Northern Italy. Lombardy. Industrial powerhouse. Traffic everywhere. What could possibly go wrong? The project was called the Autostrada Pedemontana Lombarda. A massive motorway designed to connect cities north of Milan and relieve congestion around the region. On paper, it looked like a dream. Economic powerhouse region. Millions of inhabitants. Constant truck traffic. Banks were queuing to through their money to the asphalt plant. Making...
The system worked perfectly. The satellites tracked the trucks. The software calculated the tolls. The invoices were ready. The gantries were already installed across France. 173 of them. Steel structures over highways, quietly waiting for trucks to pass and pay. The project cost almost €1 billion. It was called the Écotaxe Poids Lourds. The idea was simple. Heavy trucks should pay for using the roads. Especially foreign trucks crossing France. Elegant. Who would say no to such a great idea?...