NICK SABINE SABINE 11-2! Do you give up or do you want to keep on going? NICK No, no. I'm just distracted. I took out a loan from the bank to do some home improvements, and I'm getting a bit fed up waiting for the quotes from the plumber, the electrician and all the other tradesmen. SABINE Well you know that’s why at state level local authorities set up Pppswith private companies for their big projects, and we finance those ppps! NICK Really? And Pppsare....? SABINE Public-private partnerships. NICK Oh! ... Can I do that? SABINE No. It’s only for big public-sector projects, like building a high-speed train line, a fibre optic network, a university. Get it? NICK Yes SABINE A ppp is a contract by which the public sector enters into a business relationship with the private sector to build, finance, maintain, oversee and run a project. Depending on the sector, Pppscan be with companies in construction, public transport, telecoms and the environment - companies that are also the bank’s biggest clients. NICK Right... so if a state authority approaches you and says “I need three new schools”, you’ll the ones who finance the ppp? SABINE Only if our client wins the tender process. When the state authority decides it wants to have these schools built, it can ask for individual quotes for each part of the project, which will take some time. And that’s excluding the cost overruns... Or it will launch a ppp tender. NICK Why would it be any faster with a ppp? SABINE Because the successful bidder will be a consortium of private companies that can undertake all the construction costs and deadlines under the ppp. The state authority therefore transfers the risk to the private sector for the construction and the maintenance & upkeep of the facility over 20 or 30 years. With a ppp, pupils will be able to go to their new school one school year earlier. NICK So, are banks specialised in projects, like building build high-speed train lines and fibre optic networks? SABINE Yes, their financing departments are. The teams are arranged into sectors and have specialist knowledge of the relevant risks. That way the client gets expert advice. NICK But it must cost a fortune to build a high-speed train line... Can the bank manage on its own? SABINE A public-interest project like that often costs several billion euros. That's why the bank will associate with other banks. NICK Of course! SABINE So, do you give up? NICK No, let’s keep at it. In fact, I’m just thinking that I should stop by the house and talk to my foreman, I think I have an idea... Where were we?