Public Private Partnerships report
| Operating Result $m | 08 |
07 |
|---|---|---|
| Operating profit after tax | ||
| Europe | 0.8 | 14.3 |
| Americas | 72.2 | 43.0 |
| Project wins during period | ||
| Europe | ||
| Financial close | 1 | 1 |
| Americas | ||
| Preferred | 1 | 3 |
| Financial close | 6 | 4 |
- In the US, Lend Lease’s PPP business, Actus Lend Lease, delivered a profit after tax of $72.2 million, up 68% on 2007 profit after tax of $43.0 million. This was achieved primarily due to Actus Lend Lease achieving financial close on six projects during the year.
- Backlog Gross Profit Margin for Actus Lend Lease is $447.5 million which locks in Actus’s development and delivery workloads and margins for the next five years.
- Actus Lend Lease currently has 19 projects, up from 16 in 2007.
- In the UK, Lend Lease’s PPP business delivered a profit after tax of $0.8 million, down from $14.3 million in 2007. This was due to increased bid costs as new PPP projects came to market. Also, the prior year included the recovery of bid costs, principally on achieving financial close of the Lancashire Schools Phase 1 project.
Year in review
| Portfolio Summary | 08 |
07 |
|---|---|---|
| Americas | ||
| Units under management | 44,750 | 42,400 |
| Estimated capital spend US$b | 5.9 | 5.3 |
| Europe | ||
| No. of projects | 19 | 19 |
| Facilities management revenue backlog £m |
366 | 350 |
| Invested equity £m | 71 | 51 |
Outlook
- In the UK, the Private Finance Initiative (PFI) market is underpinned by a steady pipeline over the next 10 years across the schools, health and waste sectors.
- As we have said previously ... we will look at selling down our equity positions in PFI projects either into a fund or individually.
- In the Americas, with the initial family housing sector nearly complete in terms of new project awards, our PPP business, Actus Lend Lease, will grow from mining out opportunities in the lodgings and barracks sectors as well as applying its proven skill-set to other services for the military.
- These include affordable housing, energy, overseas bases and investigating other privatisation opportunities on Navy bases to replicate the success of the family housing privatisation scheme.
Key events
Asia Pacific- Increased development fee income as six projects reached financial close in the year, namely Air Combat Command Group II, Fort Drum Unaccompanied Officer Quarters, Hickam Phase 2, Tri-Group, Camp Lejeune Phase 3 and Fort Drum Additional Scoring (an extension to the Fort Drum privatisation contract).
- Selection as preferred bidder on the privatisation contract for Fort Wainwright and Fort Greely in Fairbanks, Alaska. The estimated construction value of this project is US$370.0 million.
- Increasing units under management by 2,350 to 44,750 units, with occupancy levels across the portfolio continuing to meet project expectations.
Europe
- Achieving financial close on Phase 2 of the £1.0 billion Lancashire Building Schools for the Future (BSF) project.
- An increase in the number of operational assets, with the operational handover of the £175.0 million Leeds Hospital, additional phases of the £169.0 million Sheffield University Student Accommodation and the £24.0 million Phase 3 of Hexham Hospital.
- Selection as one of two remaining bidders on the £1.0 billion Birmingham BSF project and the £0.4 billion Salford BSF project.
PPP Camp Lejeune
Providing military families with a better quality of life
Tarawa Terrace homes at Camp Lejeune
This year Actus Lend Lease donated three homes to the Hope for the Warrior organisation, allowing families a place to stay while wounded marines rehabilitate on base.
The Camp Lejeune project is a leading example of Actus Lend Lease’s strong track record in creating quality master planned mixed-use communities for all branches of the US military.
Actus Lend Lease and the Department of the Navy joined forces to create Atlantic Marine Corps Communities (AMCC) a public private partnership created to provide military families with a better quality of life. Camp Lejeune is the largest Marine Corps installation in the world.
Actus Lend Lease, through AMCC, is managing housing on seven bases in four states. The broader Camp Lejeune project includes the design, development, construction, renovation and management of more than 8,000 homes across the seven installations over the next 50 years.
Serving more than 28,000 residents, the construction and renovation of homes will be complete by 2013. Actus Lend Lease will continue to own, operate and manage these new communities through at least 2055.
Phase 3 is now under way and involves 15 construction components and 11 land development components in progress. The planning framework for the design made best use of the existing environment preserving natural amenities such as water features, forest, parks and walking trails.
Energy efficiency has also been a key feature in the development. In fact Camp Lejeune was also chosen as the kick-off project for the Department of Energy/Department of Defense ‘Operation Change-Out’.
This year Actus Lend Lease donated three homes to the Hope for the Warrior organisation, allowing families a place to stay while wounded marines rehabilitate on base. The project also includes a Boundless Playground® which provides a family focus that allows both wounded and/or handicapped family members to play together, a warrior fitness trail and dog park amenities – which are the first of their kind in any Actus community.
Lancashire Waste
Recycling waste for 1.4 million people
Plant under construction at Thornton
Lancashire County Council plans to divert 80% of the county’s household waste away from local landfill sites.
In 2007 the Lend Lease UK PFI business established a promising foothold in the UK waste management sector with a joint venture agreement for the design, construction and operation of two central waste treatment facilities for Lancashire County Council, under a 25 year contract.
Lend Lease has a 50% stake in the special purpose vehicle with Global Renewables, a wholly owned subsidiary of GRD Ltd.
The 240 million project provides facilities and services to manage contract waste in an environmentally and economically sustainable manner and will meet the European Landfill Directive.
Lancashire County Council plans to divert 80% of the county’s household waste away from local landfill sites by having the waste sorted and recycled in two high tech plants now being built by Bovis Lend Lease and operated by its joint venture partner, Global Renewables.
Bovis Lend Lease and Global Renewables are designing, constructing and operating the plants, which will be capable of handling up to 750,000 tonnes a year of domestic refuse generated by Lancashire’s 1.4 million population. The two plants are due to go into service in 2010.
