Typically in a public-private partnership, a single private entity assembles the delivery team and takes responsibility for project design, construction, operations and financing. In many cases, the public-sector project sponsor may choose to retain operations responsibility.

The public-sector project sponsor determines the project performance and quality requirements. With those requirements, the project company and the public project sponsor work together to identify the best project delivery and financing structure to meet or beat the requirements – on time and within budget.

A Project Development Agreement, or Concession Agreement, forms the contractual foundation for the public-private partnership. The agreement is between the public sponsor and the special-purpose project company set up by MWH IDI and the private investment partners to deliver the infrastructure services specified in the service agreement for a pre-determined service fee.

Project Development Structure

During the early stages of project development, there is an opportunity to advance projects through a shorter-term contract between the public and private parties. A Pre-Project Development Agreement between a project sponsor and MWH Infrastructure Development Inc. is a contract vehicle appropriate for the early stages of a potential public-private partnership (P3) project, especially when the project sponsor needs to understand the relative merits of the public funding and different private financing options available to execute a project.

Through the Pre-Project Development Agreement (Pre-PDA) process, MWH Infrastructure Development Inc. takes on the risk of developing the infrastructure project. As project developer, MWH IDI works in partnership with the project sponsor to determine, on an open-book basis, the cost and technical features of project delivery for an infrastructure asset. Under the Pre-PDA, several development activities advance, including preliminary engineering, assessing potential construction methods, permitting and environmental studies, financial analysis, developing open-book costing models, negotiating all required commercial agreements, and identifying and securing competitive terms with all capital, equipment, and service providers. The Pre-PDA approach allows the public project sponsor and MWH IDI to incrementally build a better understanding of the opportunities and risks associated with alternative project delivery platforms prior to proceeding to the execution phase of the project.

The Project Development Process Including a Pre-Project Development Agreement