K2 1-6 EN - short

Which of the following is NOT an element of the broad definition of a PPP in the PPP Certification Guide?

• The private agent bears significant risk and management responsibility
• The contract is for the development and/or management of a public asset or service
• There is a long-term contract between a public party and a private party
• The infrastructure is legally owned by the private agent

Which of the following conditions must be true for a project to be considered a "Private Finance" PPP?

1. All of the risks of the project must be transferred to the private sector

2. Payment must be linked to performance and/or demand or use of the asset or service

3. There is no continuing role for the public sector, as all responsibility is transferred to the private sector

4. A significant portion of the finance is at the private party's risk.

• 2 and 4 must be true.

• 1 and 3 must true.

• 1 and 4 must be true.

• 2 and 3 must be true.

Which of the following feature is essential for a project to fall under the PPP Certification Guide's definition of a "Private Finance PPP"?

• The project must involve the development of a new asset

• The private sector must be responsible for operating the asset

• The private sector is not permitted to provide any services other than maintaining the asset

• The private sector must be responsible for managing the asset by providing long- term maintenance

Which of the following is true in respect of a project that falls within the PPP Certification Guide's definition of a Private Finance PPP?

• Neither construction risk nor life-cycle risks should be transferred to the private sector
• Construction risk should be transferred to the private sector, but life-cycle risks should not
• Life-cycle risks should be transferred to the private sector, but construction risk should not
• Both construction risk and life-cycle risks should be transferred to the private sector

Which of the following is INCORRECT?

• In a user-pays PPP, the performance of the asset will generally depend on the degree to which the agreed service levels are met.

• The linking of remuneration to performance should align the parties interests without being prescriptive as to the means and methods to be applied.

• The linking of remuneration to performance is paramount for aligning the interests of the private partner with the objectives of the public sector.

• The contractor will only receive payments (or most of the payments) once the infrastructure asset is completed.

Which of the following is NOT true in respect of user-pays Design, Build, Finance, Operate and Maintain projects that may be regarded as PPPs?

• In some user-pays DBFOM PPPs, the government holds some of the equity shares in the private partner.

• User-pays Design, Build, Finance, Operate and Maintain PPPs are also known as "concessions" in some countries.

• The private partner is the economic owner of the asset during the life of the contract.

• As the private partner collects revenue from users, there is never any need for the government to provide public financing for the project.

What name is given to a project in which private sector participation is introduced into the shareholdership of an existing public company/operator that has the responsibility of operating certain infrastructure, but there is no contract (in the strict sense) between the government and the investors?

• A public domain concession

• A government-pays PPP

• A long-term lease

• A partial divestiture

According to the PPP Certification Guide, which of the following best describes economic infrastructure?

• Economic infrastructure is infrastructure that generates user fees in excess of the construction, financing, operation and maintenance costs of the infrastructure.

• Economic infrastructure is infrastructure (mostly facilities in the form of buildings) that accommodates social services.

• Economic infrastructure is infrastructure that makes business activity possible, such as communications, transportation and utilities.

• Economic infrastructure is infrastructure that is profitable for the private sector.

Which of the following is NOT true of unsolicited proposals?

• Unsolicited proposals enable faster project delivery and provide better outcomes for government than solicited proposals.
• Unsolicited proposals are not made at the request of government.
• Unsolicited proposals are made by the private party.
• Unsolicited proposals are submitted at the initiative of the private firm.

Which of the following are true in respect of the ability of PPPs to deliver efficiency through better utilisation of assets?

1. In some PPPs, the private sector can provide a service to more people with the same or fewer resources

2. In some PPP projects, the private sector can utilize the project site for hotels, restaurants, or other synergistic uses, which can lower the cost of the project .

• Neither statement is true.

• Statement 1 is true.

• Statement 2 is true.

• Both statements are true.