Chap5. Structuring and drafting the tender and contract

Which correctly describes an input to the Structuring and Drafting Phase from the Appraisal Phase?

• a. Request for proposal
• b. Request for qualification
• c. Final draft contract
• d. Definitive scope and project design or detailed project outline

Which type of ‘structuring’ defines the contract term?

• a. Risk structure
• b. Financial and budgetary or fiscal structure
• c. Tender/procurement structure
• d. Resource structure

Which of the main tasks in the Structuring Phase may use data rooms?

• a. Pre-tender interaction
• b. Drafting the contract and packaging the tender documents
• c. Finalising due diligence and preparation
• d. Establishing the project team

Which statement about financial structuring from the public perspective is true?

• a. The higher the payments, the lower the burden for either the government or the public
• b. The higher the user tariff levels, the higher the commercial feasibility
• c. The level of user charge or NPV of government payments should be fixed if there is strong competition
• d. None of them are true

Which statement about the optimum term for a PPP contract is true?

• a. A PPP DBFOM contract should fall within a range of 15-30 years
• b. The term should capture key life-cycle costs
• c. The term should be shorter than the debt term available
• d. The term should equal the maximum debt term achievable minus a “loan tail” cushion

Which is NOT a factor in favour of long-term PPP contracts?

• a. Higher debt terms permit higher leverage
• b. Higher fiscal commitment in overall aggregated terms
• c. Lower yearly burden in government-pays PPP
• d. Tariff levels remain socially acceptable

Which of the following are usual reasons for a government to provide pure co-financing in a PPP? 1. To solve a viability gap in a socially and economically sensible project 2. To increase Value for Money and reduce risks to the private partner 3. To increase the commercial feasibility of a privately financed project 4. To increase affordability by lowering the cost of capital

• a. 1, 2, 3
• b. 1, 2, 4
• c. 1, 3, 4
• d. 2, 3, 4

Which describes MOST accurately a public participative soft loan?

• a. Usually subordinate to the equity provided by the investor
• b. Provided on favourable or below-market conditions in terms of price or tenor
• c. The government receives part of the upside of a project in exchange for the below-market conditions
• d. Increases the long-term burden committed in the payment mechanism of a government-pays PPP, or increases the feasibility gap in a user-pays PPP

Identify the missing word(s) in the following sentence. When providing complementary revenues in a user-pays PPP through public budgetary payments, it is preferable to structure these as [____________] payments.

• a. service-type
• b. irrevocable
• c. unconditional
• d. pure co-financing

Which of the following statements about equity participation in a PPP by the government are true? 1. Equity participation by the government can discourage bidders and create conflict 2. Government can only share in profits if it takes an equity stake in a PPP

• a. Only 1 is true
• b. Only 2 is true
• c. Both 1 and 2 are true
• d. Neither 1 or 2 is true