PPP transaction advisory: the diligence questions bidders never ask
August 5, 2026 · Cities Practice
Most bid documents get the technical scope right. Almost none of them surface the operational failure modes that show up eighteen months after financial close.
Who owns land encumbrance risk, precisely?
Not “the authority” in the abstract — which specific department, with what statutory power, and on what timeline are they contractually obligated to clear encumbrances discovered after contract signing? Vague answers here are the single most common cause of stalled PPP projects in the sector.
What happens at year seven, not year one?
Financial models get intense scrutiny at close. Far fewer get stress-tested for the tariff escalation clause interacting with a change in regulatory policy five or seven years in — which is exactly when many concessionaires start renegotiating.
Is the output specification measurable by someone other than the operator?
If the only entity capable of verifying service-level compliance is the operator itself, the contract has an enforcement gap dressed up as a monitoring clause.
None of these questions are exotic. They just don’t get asked in a competitive bid process where every party is incentivised to get to financial close, not to stress-test what happens after it.