A8 Augsburg – Ulm, Germany
The €430m project based upon the German “A”- Model contract. apm delivered technical, financial and risk advice to support the investors to a bidding consortium. Our approach to technical and commercial due diligence was to review baseline assumptions with respect to risk, life cycle and contractual performance of the scheme to ensure that the project would be delivered within acceptable commercial risk parameters.
Key Client Benefits:
A detailed review of the key aspects of the project included:
- A series of staged technical reports providing detailed update and progress status therefore enabling the investors to develop their funding proposal in line with findings.
- Confidence to investors that the bidding consortium had the relevant knowledge and experience to successfully deliver the project.
- Our role enabled the bidding consortium to attain the right level of funding to move to the next stage of procurement.
- Our approach identified the strengths and weakness of the consortium proposal therefore enabling the investors to make a considered decision.
- Trade-off analysis linked to life cycle was delivered for materials selection enabling a more robust commercial proposal and greater confidence in proposed solution.
Our approach provided a comprehensive and robust review leading to the investors making a financial offer to the bidding consortium.
Confidential Highways DBFO, Europe
The DBFO contract comprised the construction of 40 km of new build carriageway resulting from three separate road infrastructure improvement schemes, together with the operation and life cycle maintenance of 90 km of existing roads, for a period of 30 years. The new build schemes are located on two strategic routes, and contain numerous structures, large quantities of earthworks and roadworks, both on and off existing highways, and several junction improvements.
Key Client Benefits:
apm delivered the acquisition due diligence to ascertain the robustness of the DBFO scheme on behalf of a potential equity investor. This involved an expert assessment of the operators information, including:
- Payment mechanism scenario testing and sensitivity analysis.
- Construction – Review and assessment of construction progress against Cost & Programme.
- Routine O&M – Review and assessment of Operators Performance.
- Lifecycle Maintenance – Review and assessment of Strategy and Performance.
- Stress testing the Operators Lifecycle Fund for robustness.
Our approach provided a comprehensive and robust review of a £250m contract in order for our client to make an Informed Investment Decisions.
MoD PFI – “C” Vehicles, UK
The MoD £600m contract was for the support, sustainability and delivery, on a worldwide basis, of all the MOD’s ‘C’ class vehicles during peacetime with the ability to increase the level of service to meet operational requirements i.e. going to war. Arnmore were responsible for the management of the commercial elements of the ALC (Amey Lex Consortium) Tendering for the contract.
Key Client Benefits:
Arnmore provided advice to the successful joint venture in relation to:
- Management of the business process approvals included liaising with Financial and Legal advisors to ensure compliance with MOD requirements.
- Negotiation and advice during the preferred bidder stage between ALC and MoD.
- Development of a bespoke Cost Model and Payment Mechanism Model. This modelled the capital cost of all the equipment, the life cycle of equipment, the operating cost including the support and maintenance of the equipment and the cost and benefits of delivering the capability worldwide.
- Risk sensitivities were modelled to demonstrate how the revenue was affected e.g. maintenance cost variation, variations in equipment demanded by MOD, inflation fluctuations, usage variation, etc.
- These sensitivities were utilised in order to achieve the optimum pricing position for the use in the successful Pricing Mechanism.
Our approach and development of the successful commercial strategy and payment mechanism was directly attributable to ALC’s award of the PFI contract.