Governments love competitive tension. They spend 18 months creating it. Market soundings. RFQs. RFPs. Best and Final Offers… or Optimization Phase in some places… Lawyers, financial models, technical advisers, probity officers… and 143 versions of a contract called FINAL. I love this game! Then they select the preferred bidder. Sign the contract. Open the champagne. Take a photograph wearing hard hats. Book holidays to Fiji. And kill the competition. Because the first auction is over. The...
1 day ago • 2 min read
Private investors love traffic risk. Especially when the government carries it. India wants to revive private highway investment. Its traditional BOT model had collapsed. Less than 5% of highway projects got someone signing a BOT contract. So the government changed the model. Traffic-risk sharing. Revenue support. Government buyback. Suddenly, private investors are interested again. Funny how that happens. Let’s be fair. Sharing traffic risk may be exactly the right decision. Traffic is...
2 days ago • 1 min read
Financial close. Champagne. Photographs. Congratulations. A few speeches about partnership, collaboration and the exciting journey ahead. This phase… and the consequent hangover… normally lasts a couple of weeks. Then you wake up and realise that you have something the size of the Titanic to deliver. And you may have been procrastinating… and drinking and eating too much. You suddenly remember: The document management plan must be submitted within 10 Business Days of Financial Close....
3 days ago • 2 min read
You know I love real estate… Well… Imagine hiring a property manager. Then the tenant still calls you. You chase the unpaid rent. You arrange the plumber. You check whether the repair was completed. And, at the end of the month, the property manager sends you an invoice. It’s not a joke. This happens every day with assets worth billions of dollars. Investors hire people to manage their SPVs. But the investors still have to: Chase the board papers. Coordinate the operator, contractor, lenders...
4 days ago • 1 min read
Twenty years in the market. Dozens of transactions. Deep sector knowledge. Blah, blah, blah… Everyone says they are experienced… until you ask the question. “How much will it cost?” The answer: “It depends.” If you have seen this before you continue to dig in and you’ll see these answers: “We’ll charge based on time incurred.” “We can give you an estimate, but it won’t be binding.” I get it… I’ve been there. Partners. Directors. Senior managers. Managers. Analysts. Look. Everyone is...
5 days ago • 1 min read
I understand. Saving public money does not put a politician on TV. It is much better to announce that you are spending $1 billion. A new road. A new bridge. Some magnificent piece of infrastructure. Probably unnecessary. Possibly in a small town. But located in a very interesting constituency if you want to be re-elected. I get it. Avoiding the need to build infrastructure is even worse. You risk being called: “Cheap.” “Short-sighted.” “Not committed to your voters.” I get that too. The...
6 days ago • 2 min read
In 2014. France. A true and very well documented story. The government ordered a new generation of regional trains. Beautiful trains. Modern. More comfortable. Not the smelly crap that they had when I studied in Paris… Nah… €15 billion of good trains. But someone forgot a small detail… The trains did not fit in many of the stations. You can think that those should be the basis… But no… Small details… Why bothering when we’re buying 15 billion of these things… The result? Around 1,300 platform...
8 days ago • 1 min read
Sometimes you receive funny comments and emails… Like… “Do I have to pay for a call?” as if until very recently there was not a time with no unlimited forfeits on your phone and you had to pay for EACH call… Look. I charge US$49.90 for a first call. Not enough to make me rich. At least not yet… and of course, not at that price. But the cost is still enough to make someone stop and ask: “Do I actually have a problem worth discussing?” Free calendars tend to attract three things: “Can I pick...
9 days ago • 1 min read
IBM had the best add possible: “Nobody ever got fired for buying IBM.” The logic was simple… as it was people they targeted. If it worked, fine. If it failed, nobody could blame you. You had chosen the biggest name. The sure name. Then a competitor added: “And nobody ever got promoted for buying IBM either.” Brilliant. Look. Too many advisers and providers are still selected like this. Through fear. The biggest logo. The thickest proposal. The largest team. The safe choice. Then the proposal...
10 days ago • 1 min read