Investors

Investors in projects of public interest can be from both public and private sector. The traditional model of financing projects is either from current tax and non-tax revenue, or borrowing. Given that the possibility of borrowing is restricted by law, and the cost of debt increases with approaching the limit of debt finance, the increasing cost of funding is reducing the favorable balance of quality and cost of public services.

Public sector may decide to build a public facility and independently deliver services as well as independently conduct all phases of project development, or any stage order from other sources (private and civil sector).

Private investors have the advantage of so-called economies of scale and can therefore achieve more favorable financing projects, and thus a lower cost of public services. They also possess a significantly larger range of financial instruments and models for overall financing costs that could be reduced in such a way to create added value.

By the financial instruments investor manages foreign currency risk and interest rate risk. Foreign exchange differences mean that the increase in revenue in a currency relative to the currency funding sources present additional benefit of the project because of additional earnings. Investor using currency options, currency risk can be transferred to various financial agencies that are ready to take the risk of exchange rate fluctuation of two currencies for the financial compensation, thus protecting profits from currency risk.

Effective management of currency risk makes the process of delivery of public services more efficient, which can result in higher value added in the private delivery of public services rather than traditional delivery of services.

Contractual forms of public private partnerships perceive the costs of managing buildings in the long term (25-30 years). Therefore, the cost of the building to the investor does not end up downloading and completing the construction of the building, but on the contrary, taking the building by the Investor and the beginning of use/maintenance, begins a significant portion of the whole life cost of the construction investment project.

Integration of all the stages have been defined during the contract (design, financing, construction, maintenance and use of the facility and Eventual demolition and removal of the object at the end of the life cycle of the building).

Total project cost is compared to the “comparative costs of the public sector”(PSC – Public Sector Comparator). The contract also defines “specifications of performances” of public buildings, and the payment is related to the detailed monitoring and achieving of the determined performances.

Maintenance of the building must be well planned (planned, preventive, reactive and inspection maintenance).

Without professional and quality awareness and consideration of overall project materials the PPP project can not be realized.