Based on the inputs provided, P3-VALUE 2.2 performs the calculations
detailed in the previous chapter. This chapter presents the various
outputs for the risk assessment, financial viability assessment, VfM
analysis and PDBCA. These outputs help the user understand what financial
and economic differences to expect from a public-private partnership
compared to Conventional Delivery.
6.1 Risk Assessment Outputs
Based on the risk inputs and calculation, the model provides separate
risk outputs for VfM and PDBCA. Table 3 below shows sample outputs for
VfM.
Based on the financial inputs and calculation, the model provides
the following financial outputs for both the Conventional Delivery and
P3:
Debt repayment profile
Debt Service Coverage Ratios (DSCR)
Sources of funding and financing
Furthermore, the model provides a number of additional outputs for
the private financing structure. Please note that the financial viability
assessment outputs can be found under the VfM outputs in the model.
Figure 13 shows a sample debt service profile for either Conventional
Delivery or P3.
Figure 13: Sample Conventional Delivery
or P3 Debt Service Profile
Minimum calculated DSCR vs. minimum required DSCR
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P3 - Sources of funding and financing
Amount
Debt amount
$251M
Subsidy/milestone payment to Developer
$108M
Additional required subsidy to Developer
$71M
Equity contribution
$84M
Total sources of funding and financing
$513M
P3 - Financial outputs
Value Unit
Pre-tax equity IRR
12.00%
% p.a.
Post-tax equity IRR
10.34%
% p.a.
Pre-tax P3 WACC
8.84%
% p.a.
Post-tax P3 WACC
7.96%
% p.a.
Additional required subsidy from Agency (if applicable)
$71M
Concession fee to Agency (if applicable)
Annual availability payment (if applicable)
Interest capitalized during operations? (Yes, No)
Yes
text
No. of years interest is capitalized during operations
5
years
Maximum outstanding debt
$261M
Maximum gearing*
75.75%
%
* Maximum gearing may exceed the
input gearing due to interest capitalization during
the early years of the concession (only if sculpted
debt financing is used).
6.3 VfM Outputs
This section presents the VfM outputs. Figure 14 shows the Model
Navigator's high-level view pane with the different VfM output sheets
listed.
Figure 14: Model Navigator's High-level
View Pane with List of VfM Output Sheets
This screenshot of the model navigator shows the VfM Output
sheets, including: VfM simplified outputs, VfM output summary,
VfM comparison graph, VfM PSC graph, VfM P3 public graph, VfM
P3 private graph, and financing outputs.
6.3.1 VfM Simplified Output
As shown in Table 7, the VfM Simplified Output sheet provides the
user with a high-level table comparing Conventional Delivery to P3.
As shown in Figure 15 , the sheet also shows a visual representation
of the VfM results.
Table 7: Sample Revenues and Costs
Under PSC and P3
This screen capture shows the detailed visual representation
of various cost components and revenues.
6.3.2 VfM Output Summary
The VfM Output Summary sheet contains a summary of all relevant cash
flows to either the Agency or the P3 concessionaire under Conventional
Delivery and P3:
Costs and revenues under Conventional Delivery
Costs and revenues to Agency under P3
Costs and revenues to Developer (i.e., Concessionaire) under
P3
Sample outputs for a conventionally procured project are presented
in the Figure 16 and Table 8 below.
Figure 16: Sample Cash Flows Under
Conventional Delivery
This bar chart shows various items of cash flow over time,
such as Toll Revenues, O&M costs, No Build O&M Cost
Savings, Pre-construction & Construction costs, Base variability,
Pure risks, Lifecycle performance risk, and Financing Feeds,
with costs remaining relatively stable after initial startup,
but Revenues increasing over time.
Table 8: Sample Costs & Revenues
Under Conventional Delivery
Unadjusted net revenues / (costs) under Conventional
Delivery
$346M
$1,890M
Calculated market value of revenue uncertainty
adjustment
($135M)
($392M)
Calculated market value of lifecycle performance
risk
($126M)
($309M)
Adjusted net revenues / (costs) under
Conventional Delivery
$86M
$1,189M
If the project is procured as a P3, a distinction can be made between
cash flows (and costs/revenues) to the Agency and to the Developer (i.e.,
Concessionaire). First, the Agency's perspective is presented, as in
Figure 17 and Table 9 below.
This bar chart shows various items of cash flow over time,
such as Toll revenues for public side, O&M costs, No Build
O&M cost savings, Pre-construction & construction costs,
Base variability, Pure risks, Net subsidy from Agency to Developer,
and Competitive neutrality adjustment, with costs remaining
relatively stable after initial startup, but savings increasing
gradually over time.
Table 9: Sample Costs & Revenues
to Agency Under P3
This bar chart shows various items of cash flow over time,
such as Toll revenues for private side, O&M costs, Pre-construction &
construction costs, Base variability, Pure risks, Net subsidy
from Agency to Developer, Financing Fees, and Taxes, with costs
remaining relatively stable after initial startup, but savings
increasing gradually over time.
Table 10: Sample Costs & Revenues
to Developer Under P3
Pre-construction & construction costs (transferred)
($305M)
($382M)
O&M costs (transferred)
($50M)
($296M)
Base variability (transferred)
($55M)
($92M)
Pure risks (transferred)
($42M)
($98M)
Net subsidy from Agency to Developer
$132M
$179M
Financing fees
($2M)
($3M)
Taxes
($37M)
($410M)
Total net revenues / (costs) to Developer
under P3
($0M)
$1,200M
6.3.3 VfM Comparison Graph
The next element in the VfM outputs is the VfM Comparison Graph.
This graph visually compares the net present value of costs and revenues
to the Agency and provides a clear indication to users whether P3 delivery
is expected to yield Value-for-Money to the Agency.
This bar chart shows a comparison of Conventional Delivery
to P3 Delivery, considering elements of Retained revenues, Retained
construction, O&M cost savings, Retained risks, Financing
fees, Competitive neutrality adjustment, and Net subsidy from
Agency to Developer. The Conventional Delivery model has significantly
higher costs and profits, especially with revenues.
6.3.4 Detailed Cost & Revenue Graphs
Lastly, the model provides three detailed cost and revenue graphs
showing the relevant cash flows to either the Agency or the P3 concessionaire
under Conventional Delivery and P3:
Costs and revenues under Conventional Delivery
Costs and revenues to Agency under P3
Costs and revenues to Developer under P3
These are the same graphs as those included on the VfM Output Summary
sheet, but are larger to enable users to better identify the timing
and size of various cost items.
6.4 PDBCA Outputs
This section presents the PDBCA outputs. Figure 20 shows the Model
Navigator's high-level view pane with the different PDBCA output sheets
listed.
Figure 20: Model Navigator's High-level
View Pane with List of PDBCA Output Sheets
This screenshot lists the PDBCA output sheets, including:
PDBCA Output summary, PDBCA incremental comparison, PDBCA delayed
PSC graph, PDBCA PSC graph, and PDBCA P3 graph.
6.4.1 PDBCA Output Summary
The PDBCA Output Summary sheet contains a summary of all relevant
costs and benefits under Delayed Conventional Delivery, Conventional
Delivery, and P3:
Benefits and costs under Delayed Conventional Delivery
Benefits and costs under Conventional Delivery
Benefits and costs under P3
Sample benefits and costs for the three delivery models are presented
in Figure 21, Figure 22, and Figure 23 below.
Figure 21: Sample Benefits and Costs
Under Delayed Conventional Delivery
The PDBCA Incremental Comparison sheet provides an incremental BCA analysis of
the different delivery models. It first compares the Delayed Conventional Delivery
to the No Build (Step 1) to determine whether the project's benefits outweigh its
costs. Next, the model compares the Conventional Delivery to the Delayed Conventional
Delivery to analyze the impact of the funding constraint (Step 2). Lastly, it compares
P3 to Conventional Delivery to determine the impact of P3 delivery (Step 3). Sample
output tables for the incremental analysis are shown below in Table 14, Table 15,
and Table 16.
Table 14: Compare Delayed Conventional Delivery
to No Build (Step 1)
This bar chart visually represents the data found in the tables above.
Delayed Conventional Delivery has a net benefit to society of $2,879M. Conventional
Delivery has a net benefit to society of $412M, and P3 delivery has a net
benefit to society of $23.1M.
For the hypothetical project depicted in the figures above, the P3 has the highest
net benefit to society.
6.4.3 Detailed Benefit & Cost Graphs
Lastly, the model provides three detailed benefit and cost graphs:
Benefits and costs under Delayed Conventional Delivery
Benefits and costs under Conventional Delivery
Benefits and costs under P3
These are the same graphs as those included on the PDBCA Output Summary sheet,
but they are larger to enable users to better identify the timing and size of various
cost and benefit items.