1. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Credit crunch and projects: the providers' view Philip Vernon Partner; Energy, Transport and Infrastructure Department Ashurst LLP, London philip.vernon@ashurst.com

2. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Introduction basis of procurement project structure credit crunch scenarios questions for panel

3. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Basis of procurement procurement by central government/local authority public works/services contract subject to EU procurement regulations now normally competitive dialogue procedure legacy deals using negotiated procedure

4. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Project structure – spider diagram Different sectors e.g. waste schools hospitals prisons transport

5. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Project structure – common ownership

6. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Credit crunch scenarios examples of scenarios –non availability of finance –change in finance terms/requirements –change in consortium member timing within procurement –pre close of dialogue –post close of dialogue

7. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Non-availability of finance: authority funding Loan/Capital Contribution

8. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Change in finance terms/requirements: change to finance terms Increased funding costs Increased unitary charge

9. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Change in finance terms/requirements: change to project agreement terms Increased risk/ unitary charge

10. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Change in finance terms/requirements: change to supply chain terms Increased unitary charge

11. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Change in finance terms/requirements: change to equity terms Increased unitary charge

12. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Change in consortium member: change to equity investor

13. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Procuring Authority Equity Investor Project Co Funders Services Contractor Building Contractor Equity Investor Parent Company Change in consortium member: change to supply chain

14. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Panel discussion Scenarios Non-availability of finance - authority funding Change to finance terms/requirements - finance terms - change to project agreement terms - change to supply chain terms - change to equity terms Change to consortium member - change to equity investor - change to supply chain Questions Effect on prequalification? Depends on basis of procurement? - negotiated procedure - competitive dialogue Depends on timing within procedure? - pre close of dialogue - post close of dialogue Credit crunch – market wide issue? Mitigants for new procurements? State aid?

15. A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO Credit crunch and projects: the providers' view Philip Vernon Partner; Energy, Transport and Infrastructure Department Ashurst LLP, London philip.vernon@ashurst.com 11926505