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发布时间：2014-12-14 来源：文档文库
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河北理工大学
英文翻译
专 业 ： 工程管理 班 级 ： 02工程管理1班 姓 名 ： 周 鑫 学 号 ： 200404060105 指 导 教 师 ： 刘岩峰
2008 年 6 月 10 日
Banking construction risk in the London Underground Public Private Partnership
A case study in applied project financing 1
Robert Lonergan
The author is a Senior Associate at the law firm of Bell Gully, Auckland, New Zealand, and specialises in infrastructure financing and PPP. In the period 1999-2004 he worked at a leading London law firm where he advised on major infrastructure projects in the UK, Europe and the Middle East.
1 Introduction
The construction industry has developed a variety of models for allocating and managing construction risk: traditional procurement (where the employer retains design risk and tenders the work to a single contractor, design and build procurement (where the employer transfers design and price risk in whole or part to the contractor and management procurement (where the employer retains risk and control in relation to design and the co-ordination of separate works packages. Further mechanisms have been developed to allow employers and contractors to share pricing risk (by way of a target cost mechanism or to enhance the management of speculative risks (by entering into an alliancing arrangement.
The nature of limited recourse (project financing militates against the use of procurement models in which key pricing or completion risks are retained by an employer: project financing construction risk models are therefore derived from the design and build model but with greater risk transfer from the employer to the contractor. There may however be projects where it is simply not possible to apply the traditional project finance construction model: the transfer of traditional project finance risks to a contractor may not represent a value for money risk transfer, or a contractor may simply not be willing to assume those risks at any price. In these circumstances the issue arises as to what extent other forms of construction procurement can be accommodated within the limited recourse model. The London Underground Limited (LUL PPP is an example of the limitations of the traditional
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project finance construction model as an effective mitigate of project risk. This paper discusses the means by which construction risk was allocated and managed, not only at the subcontract level but as between the other project participants, so as to produce a bankable project structure.
2 The LUL PPP Scheme
The London Underground network is one of the world‟s major urban transport networks and has suffered from persistent underfunding by central government and poor long term planning. In March 1998 the Labour Government announced that LUL would be restructured to create a “public facing” operating company (LUL, responsible for running trains and stations, determining service patterns and setting fares, and 3 new companies (Infracos responsible for managing the train, station, track and signal assets. The proposed PPP therefore essentially involved letting contracts in respect of the London Underground infrastructure rather than its operating elements (i.e. train driving, ticketing, marketing or revenue collection. The operating functions for the Tube will remain the responsibility of LUL which will be wholly-owned by Transport for London, a Greater London Authority functional body.
As part of the PPP LUL divided its 11 deep underground and sub-service lines into three distinct groupings which are the responsibility of three Infraco companies: Infraco JNP, Infraco BCV and Infraco SSL, each with its own PPP contract (a Service Contract. LUL established these Infracos as internal divisions and shadow running commenced in September 1999. When transferred to the private sector the Infracos would be required by the Service Contracts to maintain and upgrade the underground infrastructure and to provide the necessary finance for the same.
3 General nature of the Service Contracts
The Contract Period runs 30 years from the Transfer Date, being the date on which the shares in the relevant Infraco are acquired by the private sector service provider, divided into 4 7.5 year periods (each a Review Period, with a Review Date at the end of each Review Period. The key Infraco obligations were:
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(1
the achievement of specific levels of performance measured 5against benchmarks from shadow running, which include measures of journey tie, asset availability and train and station conditions;
(2
the introduction of major upgrades to certain of the network groupings (Specified Line Upgrades to achieve significant capability upgrades by specified dates;
(3
completion of other projects such as train fleet refurbishment and replacement, station modernisation and station refurbishment; and
(4
asset management and maintenance so that the assets meet specified benchmark conditions (Asset Condition Benchmark at each Review Date, condition benchmarks (Residual Life Expectancy by the end of the third Review Period, and specified residual life benchmarks (Residual Life Benchmarks on expiry of the Service Contract.
An effective balance between the maintenance, renewal and upgrading of assets is at the core of the Infraco business, and LUL considered that the private sector are best placed to decide this balance and that the most effective way of incentivising the private sector was through the payment regime.
The key obligation of LUL under the Service Contracts was to pay an Infrastructure service charge (ISC to each Infraco, with adjustments to the ISC based upon the performance of Infraco against benchmark measures of Capability, Availability and Ambience.
(1
Capability measures the ability of the rolling stock and infrastructure to deliver service to LUL customers, measured in total journey times. The performance specification also calls for upgrades in the capability of each line, with additional payments being made for the remaining life of the contract once the capability improvement has been delivered.
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(2 Availability measures the extent to which LUL‟s customers suffer disruption to the service from faults and breakdowns. The main requirement on a day to day basis is that Infracos should make the railway infrastructure available in a fit and proper condition, and the Service Contract therefore provides financial incentives to minimise asset related delays which are measured in terms which reflect the estimated total impact of the delay on customers.
(3 Ambience reflects the quality of the travelling environment which LUL customers experience both in stations and trains, measured through “mystery shopper” surveys.
Where Infraco has failed to perform under the Service Contract LUL has various remedies, the principal remedy being that LUL will make deductions from the ISC.
The nature of the LUL PPP scheme meant the project risk profile was quite different from that normally encountered in limited recourse projects.
(1
As a major capital investment programme is extended over the whole of the Contract Period, albeit with the greater part of the investment in the first 7-15 years, there was no discrete construction period and subsequent operations period during which construction risk could be said to have been substantially mitigated.
(2A corollary of the first point is that the interface between construction risk and maintenance risk had to be actively managed throughout the Contract Period. This balance was a far more acute one than in other Private Finance Initiative (PFI projects, where lifecycle decisions may be made at the outset of contract and lifecycle maintenance would be generally planned for whole of contract period. In the LUL PPP the most efficient balance of capital and operational expenditure was an issue to be constantly reassessed by the Infracos. (3
A comprehensive asset condition register did not exist so it 87
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was impossible at the outset of the Service Contract to quantify the amount of work required to restore existing assets to the required condition. LUL had identified and categorised assets so far as it could but certain of the assets (particularly those in the deep tube groupings were not categorised, or there was no certainty as to the validity of the condition category allocated to those assets by LUL (so-called “Grey Assets”. Without further allowance in the Service Contract Infraco thus bore the risk that this classification was incorrect, potentially leading to higher costs and delays in completing capability upgrades.
All of these factors together meant that the transfer of the whole of construction and maintenance risk to the private sector at the outset of the Contract Period was unlikely to be a value for money risk transfer, while in any event future public sector service requirements could not be firmly predicted. Therefore it was neither feasible nor desirable for financing for the whole of Contract Period to be committed at financial close. The issue then became how could project risk, and particularly construction risk, be allocated and managed so that the risks transferred to the private sector could be effectively priced on a value for money basis by the private sector?
4 LUL Risk Sharing in the First Review Period: Grey Asset Risk and Extraordinary Review
In order to mitigate Infraco‟s risk exposure during the First Review Period the Service Contract contained mechanisms allowing LUL to share in project risk. The most significant of these related to the treatment of Grey Asset risk and the role of the Statutory Arbiter.
Grey Assets
To mitigate Infraco Grey Asset risk a separate regime was agreed in relation to Grey Assets during the First Review Period. Infraco is responsible only for categorising such assets by the end of the first Review Period and for the cost of making safe any found to be unsafe during that period, together with the cost of maintaining the balance of Grey Assets in the condition in which they are found.
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The Statutory Arbiter and Extraordinary Review
The Statutory Arbiter was a regulatory device created specifically for the LUL PPP pursuant to the Greater London Authority Act 1999 (“The GLA Act”. In the GLA Act this person is referred to as the PPP Arbiter, but herein the definition in the Service Contract is used, which is Statutory Arbiter.
The Service Contract provided for certain matters to be referred to the Statutory Arbiter for "direction” or “guidance”. The Statutory Arbiter was required by the GLA Act to give directions or guidance in the way best calculated to achieve certain objectives which include promoting efficiency and economy in the provision, construction, renewal, improvement or the maintenance of the relevant railway infrastructure, ensuring that any specified Infraco rate of return would be earned only by an Infraco which is efficient and economic and enabling an Infraco to plan the future performance of the Service Contract with reasonable certainty.
A key function of the Statutory Arbiter was to give directions as to the finance required by a “Notional Infraco”. This is a hypothetical entity performing the obligations of Infraco in an economic and efficient manner and having certain assumed characteristics:
(1
at the relevant Review Date it has performed all its 14 13121110activities so as to be reasonably certain of its ability to perform its obligations in later Review Periods;
(2
it has the same contractual commitments to third parties as Infraco to the extent that such obligations were entered into in an efficient and economic manner;
(3 it has the same funding arrangements as Infraco actually has, to the extent that these were entered into in an efficient and economic manner, and that it will raise further finance in an economic and efficient manner; and
(4 it assesses capital and operating costs as it would when
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contracting in a competitive tendering process for the relevant activities and having regard to certain matters such as ISC adjustments and the probability of costs overruns and savings in a portfolio of activities.
Extraordinary Review
An Infraco may instigate an Extraordinary Review during the first Review Period if it reasonably considers that Net Adverse Effects arising in the Review Period have exceeded or will exceed the Materiality Threshold: the Materiality Threshold is £200,000,000 in the first Review Period and £50,000,000 for each subsequent Review Period. Net Adverse Effects are the sum of Qualifying Costs and Qualifying Revenues. Qualifying Costs are calculated by comparing Infraco‟s actual costs (or if lower, the costs Infraco would have incurred if it had performed in an efficient and economic manner and with the characteristics of a Notional Infraco (“Eligible Costs” with the expected costs of a Notional Infraco. Eligible Costs are compared with the expected costs, and it is the net overrun position which gives rise to Net Adverse Effect. A similar calculation is made for Qualifying Revenues, save that it is the actual revenues (or if higher, the notional revenues which are compared to the benchmark revenues.
If the Statutory Arbiter directs that Eligible Costs have or will exceed the Materiality Threshold the Statutory Arbiter may be asked for a direction as to the adjustment of the ISC sufficient for a Notional Infraco to avoid the need to finance that part of the Net Adverse Effect during the current Review Period which is in excess of the Materiality Threshold, and so that Infraco is provided with sufficient resources to meet further Net Adverse Effects which arise in the period up to the next Review Date.
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The Infracos‟ original funding was committed on the basis of a certain risk profile. If new obligations imposed by LUL at Periodic Review materially increase the risk profile of the project, or require additional finance on unattractive terms, this LUL Risk Sharing in Subsequent Review Periods: Periodic Review
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could compromise the position of the existing funders to the extent they would no longer be willing to continue in the transaction. Therefore a scheme was designed to balance the interests of Infraco shareholders, lenders and LUL in relation to the financing risk arising in subsequent Periodic Reviews.
At least 18 months prior to the Review Date LUL shall serve notice on Infraco setting out the proposed terms for the next Review Period (the “Restated Terms” and its affordability constraints. There are limits on the scope of what LUL may propose as Restated Terms: it is not allowed to change certain entrenched provisions and the Restated Terms must be technically achievable. Infraco then responds with a proposed level of ISC which reflects Infraco‟s need to obtain new finance to perform the Restated Terms, whether in terms of financing pre-existing obligations (Base Finance or new or varied obligations (Eligible Finance.
LUL or Infraco can thereafter ask the Statutory Arbiter for certain determinations as to the level of Base Finance and Eligible Finance reasonably required by Infraco to perform the Restated terms, and whether LUL changes comprised in the Restated Terms amount to a material change in Infraco risk. If the Statutory Arbiter determines that:
(1 (2
a Notional Infraco would be incapable of procuring that Base Finance or Eligible Finance for any reason, then a Special Mandatory Sale may be triggered whereby the Service Contract is transferred to a new service provider.
On policy grounds however there are different compensation outcomes from a Special Mandatory Sale depending on the circumstances in which the sale arises. Where the project risk profile is otherwise unchanged a Special Mandatory Sale reflects that (all things being equal Base Finance funding risk is substantially an Infraco risk. Accordingly:
Base Finance or Eligible Finance is required, or there has been a material change in Infraco risk; and 16
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(1
If LUL has required changes in the Service Contract which would require Eligible Finance or alter the project risk profile then senior lenders (and for JNP, mezzanine lenders are compensated in full. Shareholders receive their equity contribution plus their base case return for the balance of the Service Contract adjusted to reflect the actual current level of Infraco performance.
(2
If the required Base Finance cannot be procured then 100% 17of Infraco approved senior debt less oneyear‟s margin is paid, 