Tag Archives: Financial Model

NHS Greater Glasgow & Clyde – DBFM Financial Close – 2nd component

Yesterday, 11 December 2019, the third of the facilities in the latest NHS Greater Glasgow and Clyde healthcare PPP reached financial close. 

Unusually, the new facility (new Clydebank Health and Care Centre) is being added to an existing DBFM contract under a pre-agreed change procedure.

The first component of this healthcare project reached financial in December 2018 and procured two new facilities (the new Greenock Health Centre and Mental Health In-patient facilities at Stobhill Hospital). The private partner is hub West Scotland and the contract follows Scotland’s hub/DBFM “PPP-lite” template contract. 

We supported the NHS in-house team and were responsible for a range a financial transaction support activities including assessing financial submissions from the private sector partner, confirming that returns, margins and fees are consistent with benchmarks and validating financial model optimisation throughout the procurement and at financial close.   

 

Lessons from a New School

Yesterday I had the pleasure of attending the opening ceremony of Oban High School, a PPP school on the west coast of Scotland.  The building is a superb example of a modern learning environment, but the stars of the day were the pupils whose excitement and enthusiasm was a joy.

My team at Caledonian Economics were financial transaction advisers on the project, which reached financial close in 2016. The new building opened for pupils in 2018, with demolition of the old school buildings and sports pitches completed this year.

Oban High School Pipe Band - World Champions

Oban High School Pipe Band – World Champions

Reflecting on this in the light of my recent projects in #Azerbaijan, #Uzbekistan and #Kosovo, I wondered what lessons we can apply, as we tackle the challenges of crumbling buildings and dynamic populations in these former Soviet countries.

Lesson 1) – school estate regeneration is a long term business.  My involvement with redevelopment of schools in the region goes back to the feasibility study we wrote in 2000.  This led to a series of developments using both direct capital investment and PPP modalities.  The approach I recommend in developing countries is to:

  1. start by making the most efficient use of the classroom space that already exists;
  2. next, tackle areas of greatest need – buildings in bad condition, or mismatch between forecast population and classroom spaces;
  3. then, choose the procurement method that is best suited to the task at hand. Our large new high schools are #DBFM -type #PPPs, small primary schools are financed using government capital, and refurbishments use budgeted revenues.

Lesson 2) – listen to the pupils.  The range of facilities in the new school are striking: gymnasium, dance and music studios, workshops for vocational skills, and all weather sport pitches.  Yet, when I asked pupils what they would recommend for as priorities to maximise the impact on pupils of new school buildings in developing countries, they told me about the simple things, such as:

  1. bright, airy, uncluttered classrooms and informal ‘break-out’ spaces;
  2. avoid projectors and screens – large bright backlit monitors are much easier to read;
  3. plenty of whiteboard space, to capture important points;
  4. good school meals.

Lesson 3) – create networks of institutions.  Oban High School works closely with the small (30 pupils) High School on the remote island of Tiree.  Video links and screen sharing, backed up with in-person visits, tackle the curriculum constraints and provide developmental experiences for staff and pupils.

The Oban-Tiree link generally involves connecting classes, as compared to the one-to-one approach being followed by e-sgoil in the Western Isles.  These techniques are relevant for remote, rural and mobile communities in developing countries.  Reliability, I have been told, is more important than bandwidth: good audio matters more than high resolution video.

The network also includes the local further education (#VET) college who deliver training on construction, marine and mechanic skills.

Lesson 4) – In Oban I saw how extra-curricular after-school arts, sport and music activities build social and team-working skills, and strengthen the core curriculum.

Many schools in developing countries operate with two or three shifts of pupils – sometimes a response to population growth, but sometimes also a consequence of demand for popular schools while nearby schools have spare capacity.  Multiple shifts make extra curricular activities virtually impossible, depriving pupils of opportunities to increase the quality and value of their school days.  This is a primary determinant of ‘need’ described in Lesson 1).

Finally I would like to thank the Head Teacher Mr Bain, the staff at the school, the team at Argyll & Bute Council, and especially the pupils of Oban High School for a memorable, instructive and very enjoyable day.

Jedburgh Intergenerational Campus – financial close

As financial transaction advisers to Scottish Borders Council on their Jedburgh Intergenerational Campus project, we are pleased to report that Financial Close was achieved on 25 October.

The new £32 million education campus will replace three existing schools in the town and will include #nursery, #primary, #secondary, and further educational facilities.

The project is being delivered in partnership with hub South East Scotland using the standard Scottish PPP/DBFM structure, and achieved financial close 13 months after the business case (known as the New Project Request) was approved.

This successful project continues our relationship with the Council, having previously advised them on the development of the new Kelso High School which achieved Financial Close in February 2016 and which opened on time and budget in November 2017.

Glasgow School PPP

Glasgow City – two new Primary Schools

The Glasgow City Council procurement of the new Blairdardie and Carntyne primary schools reached financial close on 23 October 2017, and the first of the schools, Carntyne, was handed over on time and budget on 19th October 2018, with Blairdardie on target for hand over on time in February 2019.

 The new primary schools have been developed under a single compact PPP contract between the Council and  hub West Scotland.

As the public sector Financial Transaction Adviser on this PPP we supported the Council’s in-house team and were responsible for assessing financial submissions from the private sector partner. This included confirming that returns, margins and fees are in line with the market and consistent with pre-agreed levels.  We worked closed with technical specialists to calibrate the payment mechanism, and supported commercial negotiations.

Our second Aberdeenshire Schools DBFM/PPP has reached financial close

Our appointment as Transaction Financial Advisers by Aberdeenshire Council on the procurement of a replacement for Inverurie Academy and Community Campus came to a successful conclusion when financial close was achieved on 19 April 2018.

This is our second such appointment by the Council, having previously supported the procurement of Alford Community Campus which opened its doors to pupils for the first time in October 2015.

alford

Photograph credit hub North Scotland

Both new schools were procured with our support from hub North Scotland under the hub/DBFM/PPP structure. They will variously serve pupils in early years (#kindergarten), primary and secondary education and include a range of community facilities such as theatre, sports hall, swimming pool, community library and dance studio, with all-weather and grass playing fields.

 

Angus Council – transaction adviser for two new primary schools

We are very pleased to have supported Angus Council on the procurement of replacements for Muirfield and Ladyloan Primary Schools in the coastal town of Arbroath, which reached financial close on 24 November 2017.  The new schools are being developed under a single Design-Build-Finance-Maintain contract with hub East Central.

Each school will have a capacity of approximately 335 primary pupils and 72 pre-school pupils.

We supported the Council’s in-house team in confirming that financial submissions from the private sector partner are within the various limits set by the Territory Partnering Agreement and we worked closely with the financing partners to achieve a successful financial close to the project. 

This continues our long relationship with Angus Council which including supporting the initial feasibility study, and subsequently acting as transaction advisor, for the Forfar and Carnoustie schools PPP.

Dumfries and Galloway Schools PPP – Operational Support

We have been reappointed to provide financial advisory support to Dumfries and Galloway Council for the operational phase of the Smarter Schools PPP project.

DCIM100MEDIADJI_0081.JPG

Stranraer Academy, refurbished and extended

This project was signed in 2008 and all eleven schools were operational by 2010.  The project was financed by a £127 million facility provided by HSBC and the European Investment Bank.

This reappointment continues our long relationship with the Council which spanned the project business case, tender preparation and evaluation, financial close, and project effectiveness assignments during the operational phase.

NHS Orkney New Hospital – Financial Close

building

Caledonian Economics would like to congratulate NHS Orkney, Robertson Capital Projects and the project team on reaching financial close and signing the contracts for the New Orkney Hospital and Healthcare Facility. 

With colleagues from QMPF we have been working with NHS Orkney for several years to support the business case and subsequent procurement under a variant of the Scottish PPP/NPD model.        

The new Rural General Hospital will have 49 inpatient beds covering acute, cancer & palliative care, maternity and rehabilitation  and will host a variety of services including two GP Practices, Dental and support services.  When it opens in 2019 it will provide a state of the art modern building which will enhance the services staff can offer, utilising technology and the improved facilities.

More details here: http://www.ohb.scot.nhs.uk/new-hospital-and-healthcare-facilities 

This continues Caledonian Economics’ long association with Orkney, having previously supported Orkney Islands Council on the procurement of the new Kirkwall Grammar School and Theatre, Pickaquoy Leisure Pool and Stromness Primary School, using a unique variant of the PPP structure.

Infradeals Rank Calecon 1st global for PPP social deals.

Infradeals published their 2016  and Global PPP and Infrastructure advisor league tables in January. 

With 11 signed deals at a value of $453 million, Caledonian Economics ranked first Financial Advisers to the public sector side of social infrastructure deals. 

Calec Global PPP Social Infra ranking

 

New West Calder High School Reaches Financial Close

West Lothian Council’s procurement of the new West Calder High School from hub South East reached Financial Close today, 14 December 2016.

This is the eleventh such Financial Close using the Scottish hub/DBFM PPP financing model that Caledonian Economics has advised on this year.

The new high school building has been designed to meet modern access requirements and support inclusion of pupils with additional learning needs in line with the ‘presumption of mainstream’.

The new location  will enable greater community access to the very high standard of facilities, particularly physical education facilities for community use outwith core school hours.