They called it “a visionary public-private partnership.” With such a titled and being in Brazil, I could not buy enough popcorns in the supermarket. ​ Spoiler alert. At the end, they were right. It was visionary. ​ But only in one sense: no one else could see it working. ​ The government of Bahia, Brazil, decided to modernize Salvador’s old suburban rail line. Ambition was sky-high… as high as political careers made on the back of public money… although, I’ll let that one for another story… ​ Anyway. Ambition. High. ​ A 36-kilometre monorail, sleek, silent, and sexy — connecting 34 stations and a million commuters. The dream? To make Salvador look like Singapore. The reality? It ended up looking more like a Netflix true-crime episode about corruption and optimism bias… So badly, that it deserves a chapter in this newsletter. ​ When they launched the tender, only one bidder turned up — the Chinese group BYD with its “SkyRail Bahia” proposal. You know you’re in trouble when your “competitive dialogue” sounds more like a monologue. But instead of hitting pause and asking, “Wait, why is no one else interested?”, they went full throttle. How typical. What a “biased” mistake. ​ Contracts were signed. The existing railway was demolished. And construction began with the energy of a motivational guru in social media making $1.000/month at the most… ​ Then came the usual trilogy: delay, cost blowout, and scandal. Love Netflix! ​ Costs jumped from R$ 1.5 billion to R$ 5.2 billion, which in PPP language means: “Oops, we forgot to multiply by three.” ​ Deadlines? Missed. Accountability? Missing. By 2023, with little more than a few piles of concrete and a pile of excuses, the government pulled the plug. ​ The Audit Court declared the contract illegal. Yes, illegal. Imagine signing a PPP so poorly structured that it doesn’t even pass the legality sniff test. Sponsor lawyers, where were you? Or the client lawyers… Or the lenders’ lawyers… And what about the JV ones? ​ Anyway. ​ Investigations followed. Accusations flew. And Salvador’s skyline was left with unfinished pillars that look like monuments to bureaucratic ego. ​ Let’s summarize the achievement: A railway line destroyed before anything new was operational. Zero competition at tender stage. Thousands of commuters stranded with nothing but a construction site. A fresh new tender a few years later — because apparently, burning billions once wasn’t enough. ​ In PPP land, they call it “lessons learned.” In the real world, such masterclass in public incompetence and negligence has no name. ​ The real horror? What I see every day when agencies and sponsors do obvious and avoidable mistakes… or they miss the minimum sniff test. They will tell you it was a “necessary learning experience.” If not… they directly point out to the other side of the table. ​ Look. ​ No question why taxpayers and media think that “Public-Private Partnership” too often means Public Money, Private Mess, and Political Amnesia. ​ For more of these stories, click below. ​ ​Don't get embarrassed - Get the basics in PPPs​ ​ PD 1: If you liked this email, don't keep it in secret and forward it to a friend. They will thank you enormously one day. PD 2: If somebody has sent you this email and you want to receive emails like this yourself, visit vicentevalencia.com PD 3: If you want unsubscribe, click the link below. ​ ​ |
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Early brief: “Deliver a shiny new light rail through Sydney’s CBD. Easy. Everyone loves trams.” Translation: scope unclear, assumptions heroic, risks buried under PowerPoint. They signed a PPP anyway. The CBD & South East Light Rail (CSELR) looked great on slides. A 12-km network. Wrapped in a neat PP. Design, build, finance, operate, maintain. The promise: reliable transport, urban sparkle, political selfies. But, as usual, then construction met reality. The contract drawings and utilities...
It was the early 2000s. In Disunited Kingdom the formerly known as UK. The government wanted to rebuild hundreds of schools. Big dream. Big politics. Usual suspects. Of course, as per the playbook, before launching the program, they ran a market-testing exercise to “hear the voice of the private sector.” Lovely. And the market said what the market always says: “Of course, I can, it’s possible. I cannot be fired or lose my bonus… so, I confirm that we can design, build, finance, and maintain...
I have 4 airbnb apartments in Auckland. 3 perfoming well. 1 slagging. Quien no llora no mama or who does not cry, he is not breastfeed, or less literally, if you don't cry, you don't get fed. I sent an email. What’s going on? I’m disappointed. What I can do to help. In 48 hours or less, the calendar in the slagging apartment is full. No response, just facts. Like magic… back on track. This situation is not unusual. In my 20 years managing projects and people, I’ve seen this almost every day....