Availability payments - Revision history

Designing Buildings at 07:03, 12 January 2021

2021-01-12T07:03:08Z

Designing Buildings at 06:58, 12 January 2021

2021-01-12T06:58:58Z

← Older revision		Revision as of 06:58, 12 January 2021
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	* Concessions.		* Concessions.
	* Leases.		* Leases.
−
−	Payments may be modified if there is a change in the performance or availability of the completed project. For example, if the performance of the project deteriorates, the client may pay less, or suspend payments until performance returns to an acceptable level.

	= Evaluation of performance =		= Evaluation of performance =
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	There are generally two types of metric that may be used to gauge appropriate levels of asset availability:		There are generally two types of metric that may be used to gauge appropriate levels of asset availability:

−	* Performance elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and so on.	+	* Performance of elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and so on.
−	* Availability ~~aspects~~ of facilities, services~~, safety~~ and condition.	+	* Availability of facilities or services and their condition.

−	There are some instances where exceptions to payment modifications can be made. These can include preventive maintenance activities, emergency situations and so on. Ideally, availability modifications will be partial, and fee payment will be adjusted accordingly. Whenever possible, asset availability and performance levels should be realistic.	+	The contractor receives pre-established payments called Maximum Availability Payments (MAPs) for the allocated time period.

−	~~Based on this arrangement, the contractor receives pre-established payments called Maximum Availability~~ Payments ~~(MAPs) for~~ the ~~allocated time period~~. ~~Corresponding adjusted payments are typically allocated as payment deductions. These are based on~~ the performance of the project. The relationship of the deduction amount and the performance are also predetermined in the contract, defined as the deduction terms.	+	Payments may be modified if there is a change in the performance or availability of the completed project. For example, if the performance of the project deteriorates, the client may pay less, or suspend payments until performance returns to an acceptable level. The relationship of the deduction amount and the performance are also predetermined in the contract, defined as the deduction terms.
		+
		+	There are some instances where exceptions to payment modifications can be made. These can include preventive maintenance activities, emergency situations and so on.

	= PPPs and availability payments =		= PPPs and availability payments =
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	* The transfer of risk for designing, building (sometimes financing), maintaining and operating an asset from the client to the contractor.		* The transfer of risk for designing, building (sometimes financing), maintaining and operating an asset from the client to the contractor.
−	* An advantageous arrangement for non-revenue generating projects (or projects where demand and financial ~~outcome~~ may be difficult to predict).	+	* An advantageous arrangement for non-revenue generating projects (or projects where demand and financial outcomes may be difficult to predict).
	* An option for projects where outcomes can easily be measured and monitored.		* An option for projects where outcomes can easily be measured and monitored.
	* A fixed fee structure that is established by the client.		* A fixed fee structure that is established by the client.
−	* ~~The~~ suitable framework for projects where delivery of service levels are a higher priority than the generation of revenue.	+	* A suitable framework for projects where delivery of service levels are a higher priority than the generation of revenue.

	= Case study: MetroLink, Dublin =		= Case study: MetroLink, Dublin =

−	This proposed light rail project links an area north of Dublin's city centre to the downtown area by way of Dublin Airport. The planned 12-mile ~~undertaking~~ will be constructed both above and below ground, with a tunnel under Dublin Airport ~~and running from Northwood to Charlemont.~~	+	This proposed light rail project links an area north of Dublin's city centre to the downtown area by way of Dublin Airport. The planned 12-mile route will be constructed both above and below ground, with a tunnel under Dublin Airport.
−		+
−	An availability payment structure for the project was broken down into two segments: one for the infrastructure construction (the design, build, finance and maintain procurement model) and another for the operation of the project upon completion.	+

−	~~As of March 2018,~~ the ~~line~~ was ~~planned to begin operation in 2027. At that point,~~ the ~~contractor will be entitled to~~ a ~~basic payment~~, ~~a flexible operations payment~~ and ~~a payment based on energy costs. Deductions to these payments may occur if there are service failures~~.	+	An availability payment structure for the project was broken down into two segments: one for the infrastructure construction (under a design, build, finance and maintain procurement model) and another for the operation of the project upon completion.

−	~~= Availability payments in~~ the ~~UK =~~	+	When the project is complete, the contractor will be entitled to a basic payment, a flexible operations payment and a payment based on energy costs. Deductions to these payments may occur if there are service failures.

	Availability payment arrangements have also been made for some aspects of projects including:		Availability payment arrangements have also been made for some aspects of projects including:

Designing Buildings at 06:52, 12 January 2021

2021-01-12T06:52:37Z

← Older revision		Revision as of 06:52, 12 January 2021
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	= Performance based payments =		= Performance based payments =

−	Payments are made for ~~the~~ predetermined amount regardless of whether ~~or not~~ the project is actively in use. ~~Such projects may be considered risky~~ to ~~embark upon~~, ~~but the arrangement~~ may ~~nevertheless~~ be ~~beneficial to both parties~~.	+	Payments are made for a predetermined amount based on availability, regardless of whether the project is actively in use. Arrangements tend to last between 25 to 35 years. They are sometimes used for public projects (such as infrastructure development, school campuses, hospital buildings and so on) that may not be viable as fee or toll-based undertakings. They can also be used for individual components of particularly large projects.

−	This situation can arise when the advantage to making availability payments over the life of the project outweighs the alternative of making a capital investment. Availability payment arrangements tend to last between 25 to 35 years.	+	Availability payment arrangements are sometimes used for agreements, including:
−		+
−	Availability payments may be feasible for public projects (such as infrastructure undertakings, school campuses, hospital buildings, courthouses and so on) that may not be viable as fee or toll-based undertakings.	+
−		+
−	~~This type of arrangement can also be used for separate components of particularly large projects.~~ Availability payment arrangements are sometimes used ~~in different types of~~ agreements, including:	+

	* Design build (finance) operate maintain contracts.		* Design build (finance) operate maintain contracts.
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	* Leases.		* Leases.

−	~~These regular payments~~ may be modified if there is a change in the performance or availability of the completed project. If the performance of the project deteriorates, the client may ~~opt to adjust the payment amount~~ or ~~discontinue making~~ payments until performance returns to an acceptable level.	+	Payments may be modified if there is a change in the performance or availability of the completed project. For example, if the performance of the project deteriorates, the client may pay less, or suspend payments until performance returns to an acceptable level.

	= Evaluation of performance =		= Evaluation of performance =

−	There are two types of ~~metrics~~ that may be used to gauge appropriate levels of asset availability~~. These include~~:	+	There are generally two types of metric that may be used to gauge appropriate levels of asset availability:

	* Performance elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and so on.		* Performance elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and so on.

Editor at 20:34, 30 December 2020

2020-12-30T20:34:25Z

← Older revision		Revision as of 20:34, 30 December 2020
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	* Public Private Partnership.		* Public Private Partnership.
	* Public procurement.		* Public procurement.
		+	* Shadow tolls.

	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Project_Knowledge]] [[Category:Definitions]] [[Category:Projects_and_case_studies]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Public_procedures]]		[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Project_Knowledge]] [[Category:Definitions]] [[Category:Projects_and_case_studies]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Public_procedures]]

Editor at 15:15, 30 December 2020

2020-12-30T15:15:54Z

← Older revision		Revision as of 15:15, 30 December 2020
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	* Design, build, finance, maintain DBFM.		* Design, build, finance, maintain DBFM.
	* Design Build Finance Operate Maintain DBFOM.		* Design Build Finance Operate Maintain DBFOM.
		+	* Design build operate maintain DBOM.
	* Government Construction Strategy.		* Government Construction Strategy.
	* Infrastructure.		* Infrastructure.

Designing Buildings at 12:34, 30 December 2020

2020-12-30T12:34:11Z

← Older revision		Revision as of 12:34, 30 December 2020
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	= Introduction =		= Introduction =

−	An availability payment is a type ~~of financing structure that is~~ sometimes used for public private partnership projects. Under this arrangement, the client makes fee payments to the contractor once the project is completed and ready to use.	+	An availability payment is a type payment sometimes used for public private partnership projects. Under this arrangement, the client makes fee payments to the contractor once the project is completed and ready to use.

	= Performance based payments =		= Performance based payments =
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	This type of arrangement can also be used for separate components of particularly large projects. Availability payment arrangements are sometimes used in different types of agreements, including:		This type of arrangement can also be used for separate components of particularly large projects. Availability payment arrangements are sometimes used in different types of agreements, including:

−	* Design build (finance) operate maintain.	+	* Design build (finance) operate maintain contracts.
−	* ~~Concession~~.	+	* Concessions.
−	* ~~Lease~~.	+	* Leases.

	These regular payments may be modified if there is a change in the performance or availability of the completed project. If the performance of the project deteriorates, the client may opt to adjust the payment amount or discontinue making payments until performance returns to an acceptable level.		These regular payments may be modified if there is a change in the performance or availability of the completed project. If the performance of the project deteriorates, the client may opt to adjust the payment amount or discontinue making payments until performance returns to an acceptable level.
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	There are two types of metrics that may be used to gauge appropriate levels of asset availability. These include:		There are two types of metrics that may be used to gauge appropriate levels of asset availability. These include:

−	* Performance elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and ~~morale~~.	+	* Performance elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and so on.
	* Availability aspects of facilities, services, safety and condition.		* Availability aspects of facilities, services, safety and condition.

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	= PPPs and availability payments =		= PPPs and availability payments =

−	PPPs are a very broad range of partnership where the public and private sectors collaborate for some mutual benefit.	+	PPPs are a very broad range of partnership where the public and private sectors collaborate for some mutual benefit. They were first developed in the UK in the 1990s in the belief that private sector companies might be more efficient at providing certain services than public authorities and so could deliver better value for money for taxpayers.

−	PPPs ~~were first developed in the UK in the 1990s in the belief that private sector companies might be more efficient at providing certain~~ services ~~than public authorities~~ and ~~so could deliver better value for money for taxpayers~~.	+	PPPs can cover a range of partnerships to deliver policies, services, buildings or infrastructure, from hospital catering to asset maintenance and renewal. Partnerships can be arrangements made either with central or local government entities.

−	PPPs can cover a range of partnerships to deliver policies, services, buildings or infrastructure, from hospital catering to maintenance and renewal of London Underground. Partnerships can be arrangements made either with central or local government entities.	+	For PPP projects, an availability payment arrangement may offer benefits including:
−		+
−	For PPP projects, an availability payment arrangement ~~offers~~ benefits including:	+

	* The transfer of risk for designing, building (sometimes financing), maintaining and operating an asset from the client to the contractor.		* The transfer of risk for designing, building (sometimes financing), maintaining and operating an asset from the client to the contractor.
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	= Case study: MetroLink, Dublin =		= Case study: MetroLink, Dublin =

−	This proposed light rail project links an area north of Dublin's city centre to the downtown area by way of Dublin Airport. The planned 12-mile undertaking will be constructed both above and below ground, with a tunnel under Dublin Airport and running from Northwood to Charlemont~~. As 2018, the cost of the project was estimated to be €3 billion according to the National Transport Authority~~.	+	This proposed light rail project links an area north of Dublin's city centre to the downtown area by way of Dublin Airport. The planned 12-mile undertaking will be constructed both above and below ground, with a tunnel under Dublin Airport and running from Northwood to Charlemont.

−	~~For the project, an~~ availability payment structure was broken down into two segments: one for the infrastructure construction (~~through~~ the design, build, finance and maintain procurement model) and another for the operation of the project upon completion~~. As of March 2018, the line was planned to begin operation in 2027~~.	+	An availability payment structure for the project was broken down into two segments: one for the infrastructure construction (the design, build, finance and maintain procurement model) and another for the operation of the project upon completion.

−	At that point, the contractor will be entitled to a basic payment, a flexible operations payment and a payment based on energy costs. Deductions to these payments may occur if there are service failures.	+	As of March 2018, the line was planned to begin operation in 2027. At that point, the contractor will be entitled to a basic payment, a flexible operations payment and a payment based on energy costs. Deductions to these payments may occur if there are service failures.

	= Availability payments in the UK =		= Availability payments in the UK =

−	Availability payment arrangements have been made for some aspects of projects ~~in the UK. These include~~:	+	Availability payment arrangements have also been made for some aspects of projects including:

−	* Edinburgh Light Rail Scheme	+	* Edinburgh Light Rail Scheme.
−	* A92, Scotland	+	* A92, Scotland.
−	* A13 Thames Gateway	+	* A13 Thames Gateway.
−	* Manchester Metrolink	+	* Manchester Metrolink.
−	* Strategic Rail Authority	+	* Strategic Rail Authority.
−	* London Underground	+	* London Underground.
−	* GNTL Rail Franchise Bid	+	* GNTL Rail Franchise Bid.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Editor at 19:09, 29 December 2020

2020-12-29T19:09:41Z

← Older revision		Revision as of 19:09, 29 December 2020
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	* Design Build Finance Operate Maintain DBFOM.		* Design Build Finance Operate Maintain DBFOM.
	* Government Construction Strategy.		* Government Construction Strategy.
		+	* Infrastructure.
		+	* Infrastructure and Projects Authority.
		+	* Infrastructure bill.
	* Infrastructure UK.		* Infrastructure UK.
	* Procurement route.		* Procurement route.

Editor at 19:06, 29 December 2020

2020-12-29T19:06:18Z

← Older revision		Revision as of 19:06, 29 December 2020
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	{\|		{\|
−	\| [[File:EdinburghTram.jpg]]	+	\| [[File:EdinburghTram.jpg\|link=File:EdinburghTram.jpg]]
	\|-		\|-
	\| Stationary Edinburgh tram, Princes Street. Photo © kim traynor (cc-by-sa/2.0).		\| Stationary Edinburgh tram, Princes Street. Photo © kim traynor (cc-by-sa/2.0).

Editor at 19:05, 29 December 2020

2020-12-29T19:05:13Z

← Older revision		Revision as of 19:05, 29 December 2020
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		+	{\|
		+	\| [[File:EdinburghTram.jpg]]
		+	\|-
		+	\| Stationary Edinburgh tram, Princes Street. Photo © kim traynor (cc-by-sa/2.0).
		+	\|}
		+
	= Introduction =		= Introduction =

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	* London Underground		* London Underground
	* GNTL Rail Franchise Bid		* GNTL Rail Franchise Bid
		+
		+	= Related articles on Designing Buildings Wiki =
		+
		+	* Design, build, finance, maintain DBFM.
		+	* Design Build Finance Operate Maintain DBFOM.
		+	* Government Construction Strategy.
		+	* Infrastructure UK.
		+	* Procurement route.
		+	* Public Private Partnership.
		+	* Public procurement.

	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Project_Knowledge]] [[Category:Definitions]] [[Category:Projects_and_case_studies]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Public_procedures]]		[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Project_Knowledge]] [[Category:Definitions]] [[Category:Projects_and_case_studies]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Public_procedures]]

Editor at 18:57, 29 December 2020

2020-12-29T18:57:57Z

← Older revision		Revision as of 18:57, 29 December 2020
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	= Availability payments in the UK =		= Availability payments in the UK =

−	~~Examples of availability~~ payment arrangements in the UK include:	+	Availability payment arrangements have been made for some aspects of projects in the UK. These include:

	* Edinburgh Light Rail Scheme		* Edinburgh Light Rail Scheme
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	* London Underground		* London Underground
	* GNTL Rail Franchise Bid		* GNTL Rail Franchise Bid
		+
		+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Project_Knowledge]] [[Category:Definitions]] [[Category:Projects_and_case_studies]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Public_procedures]]

← Older revision		Revision as of 07:03, 12 January 2021
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	= Introduction =		= Introduction =

−	An availability payment is a type payment sometimes used for public private partnership projects. Under this arrangement, the client makes fee payments to the contractor once the project is completed and ready to use.	+	An availability payment is a type payment sometimes used for public private partnership (PPP) projects. Under this arrangement, the client makes fee payments to the contractor once the project is completed and ready to use.

	= Performance based payments =		= Performance based payments =

−	Payments are made for a predetermined amount based on availability, regardless of whether the project is actively in use. Arrangements tend to last between 25 to 35 years. They are sometimes used for public projects (such as infrastructure development, school campuses, hospital buildings and so on) that may not be viable as fee or toll-based undertakings. They can also be used for individual components of particularly large projects.	+	Payments are made for a predetermined amount based on availability, regardless of whether the project is actively in use. Arrangements tend to last between 25 and 35 years. They are sometimes used for public projects (such as infrastructure development, school campuses, hospital buildings and so on) that may not be viable as fee or toll-based undertakings. They can also be used for individual components of particularly large projects.

	Availability payment arrangements are sometimes used for agreements, including:		Availability payment arrangements are sometimes used for agreements, including:
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	= Evaluation of performance =		= Evaluation of performance =

−	There are generally two types of metric ~~that may be~~ used to gauge appropriate levels of asset availability:	+	There are generally two types of metric used to gauge appropriate levels of asset availability:

	* Performance of elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and so on.		* Performance of elements such as security, emergency preparedness, lighting, cleanliness, customer satisfaction, employee feedback and so on.
	* Availability of facilities or services and their condition.		* Availability of facilities or services and their condition.

−	The contractor receives pre-~~established~~ payments called Maximum Availability Payments (MAPs) for the allocated time period.	+	The contractor receives pre-agreed payments called Maximum Availability Payments (MAPs) for the allocated time period.

−	Payments may be modified if there is a change in the performance or availability of the completed project. For example, if the performance of the project deteriorates, the client may pay less, or suspend payments until performance returns to an acceptable level. The relationship of the deduction amount and the performance are ~~also predetermined~~ in the contract, defined as ~~the~~ deduction terms.	+	Payments may be modified if there is a change in the performance or availability of the completed project. For example, if the performance of the project deteriorates, the client may pay less, or suspend payments until performance returns to an acceptable level. The relationship of the deduction amount and the performance are set out in the contract, defined as deduction terms.

	There are some instances where exceptions to payment modifications can be made. These can include preventive maintenance activities, emergency situations and so on.		There are some instances where exceptions to payment modifications can be made. These can include preventive maintenance activities, emergency situations and so on.
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	* An option for projects where outcomes can easily be measured and monitored.		* An option for projects where outcomes can easily be measured and monitored.
	* A fixed fee structure that is established by the client.		* A fixed fee structure that is established by the client.
−	* A suitable framework for projects where delivery of service levels ~~are~~ a higher priority than the generation of revenue.	+	* A suitable framework for projects where delivery of service levels is a higher priority than the generation of revenue.

	= Case study: MetroLink, Dublin =		= Case study: MetroLink, Dublin =