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Learned at Sesame Street
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Great ambition. Wow. Projects like that satisfy the darkest wet dreams of consultants, builders and equity providers alike. ​ As you can imagine there was a great setup: The government brought in first-class legal and financial advisors, funded partly by multilaterals. Competitive procurement, glossy RFQs, strong bids. ​ Of course, during the procurement the government hit its chest, like a proud gorilla. Well paid advisors produced bankable structures. Even much better paid layers put forward risk allocations that were standard. Investors lined up — international lenders, multilaterals, local banks. ​ Once the concession was awarded and the consultants left… the Colombian government’s internal team weaker than a Trump’s bluff… ​ So… Financial covenants weren’t properly tracked. Change orders were signed off without deep analysis. Corruption risks were underestimated… especially with famous guys coming from Brazil… ​ The “baby” — a 25-year contract worth billions — was left in the hands of a few overstretched civil servants that were informed about what a PPP was using a Sesame Street piece of show. ​ The crash? Obvious… By 2016–2017, the Odebrecht corruption scandal exploded. Evidence showed bribes paid to secure Ruta del Sol II. Financing collapsed. Works stopped halfway. The concession had to be liquidated. ​ The government had spent millions on procurement and consultants, but had not invested in building a robust, independent contract management team to defend the state once the ink was dry. ​ Auch… ​ The brutal truth? PPP procurement is the honeymoon. Colombia proved that even if you design a “perfect” PPP with the best advisors, if you don’t have a strong team holding the baby afterwards, the project is at the mercy of corruption, weak enforcement, and political shocks. The consultants go home with their fees and bonuses. ​ Spending millions on advisors during procurement is useless if you don’t have the internal capability to manage the contract for 25 years. Period. ​ Now, if you are not interested about the guys at Sesame Street telling you what a PPP is, you can click in the link below. ​ ​100 Q&A About PPP that you MUST KNOW​ ​ 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. ​ ​ |
Vicente Valencia
I talk about Personal Growth, Management, Infrastructure and More | C-Suite Executive | Mentor, Coach, Strategic Consultant | Real Estate Investor | 👇JOIN +2k readers 👇
Humiliation can come in many ways. But probably, one of the most humiliating failures a government can suffer in a PPP is the silence. This happened in a mid-sized developed country of the Commonwealth just a few years ago. The government wanted a flagship social infrastructure project: a cluster of new courthouses and justice facilities, spread across regional cities. They framed it as transformational. A “once in a generation” opportunity. Ministers on stage, cameras rolling, the usual...
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