SV Christian Hintze Holm believes the report is so deficient that it does not meet the acceptability requirements; with regard to announcing a PPP agreement (public-private-partnership) with 30 years’ duration and an acquisition value of well over 100 million.
– The lack assessments of what such financing will entail consequences arrangement can have and what risks municipality undertakes compared to a traditional leveraged model. We believe the lack of case study had significance for the municipal council. It was evident that there was considerable confusion among officials about what OPS means on the areas that were not investigated, mainly costs and risks.
– No assessment of impacts
And he had far more to say on how he thought the decision was inadequate
– The chief officer’s case report describes in all material respects the need for and nature of care homes, as well as an assessment of whether the municipality may enter into a PPP avtale.Hvordan it will take place in practice, it is not rated consequences, he argues and exemplifies:
– The general out risk and uncertainty factors of PPP financing, cost impacts against the other possible funding models, the consequences of long-term bond to one supplier, if there is no market for PPP financing from the specified criteria and possible regulatory consequences, are not discussed. These factors obviously must be studied before such a competition advertised, he emphasizes and explains:
– A short, very incomplete, and according to the alderman hastily prepared notes, were laid on the table of the board . It turns sketchy stated that PPP financing will be an estimated 1.2 million more per year than debt financing. This paper is not included in the documents that formed the basis for the municipal council.
Shortage List
then listed Hintze Holm up what he thought was the main shortcomings:
– First, given misleading information about alternatives to PPP. The alderman writes that the municipality has no other suitable sites for the purpose. This is a fact and manifest errors. This assumed that the municipality must acquire care homes as OPS or service contracts, ie because the opportunity for traditional debt financing is not available. This is misleading information. There is nothing in the way of the municipality itself may acquire residential homes through a traditional construction project, whether on municipal land or empty city purchases.
– There is a general problem with PPP financing market for this are not well developed, so that the number of suppliers is small and the real competition is limited. In our case, this will probably be extra unobtrusive, following criteria shall be applied. There will be few current suppliers because there are very few pre-regulated private land for such purposes north of Fjellstrand. The case contains no assessments of the ability to obtain a sufficient number of providers, or what kind of impact a limited number of providers can get.
Furthermore, he pointed out a lack of clarity with regard to the criteria for selection of the bidder:
– It is not specified how you want to handle significant matters that location , progress and not least about the current plot is regulated or unregulated. There is no assessment of the relationship between the municipality’s role as PPP Party and municipal planning authority. By an attachment makes it clear that it envisages commencement of the lease in 2016 when providers must have completed regulated areas.
– If you must enter into an agreement with a landowner who is addicted to conduct a regulatory process, it will be challenging due to the municipality’s role as a planning authority. The municipality may not bind its planning authority through private law contracts, and can get liability if regulation for this purpose is complicated. There will also be a question of what situation the municipality comes as planning authority to landowners already started to adjust to similar purposes, but not chosen, or can bind to the 30-year PPP contracts with the municipality.
Cost and expertise
Finally pulled Hintze Holm until he felt a vague charge image:
– The cost consequences of a PPP financing is not explored beyond that mentioned in a line in the proposal that a traditional construction project would normally result in lower financing costs, “because the municipality may borrow money considerably cheaper than a private actor. “
– The need for expertise to formulate the basis for a PPP agreement, and the cost of it, is not considered. An agreement that obligates the municipality for 30 years requires a very thorough preparation and excellent negotiation skills.
– The same applies to changes during the contract period. The municipality’s experience shows that depending on the purpose flexibility. Within such a long period as 30 years, occurring obvious changes in the needs that require changes to the buildings. PPP contractor will be in a monopoly situation, which could result in any change will be costly, rounded Christian Hintze Holm argument array.
then promoted Claudia Behrens (MDG) the following:
“municipal council decision in the case is repealed. The case is under further study on the basis of the points in the requirements of legality. “
But her proposal received only nine votes (2 R, 5 S, 2 MDG) and fell. Then the setting adopted against eight votes (2 R, 5 S, MDG 1).
“Local Board’s decision in this case upheld and the application of legality forwarded to the County for treatment.”
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