APN Presentation

PPP in Schools & Universities

7 Oct 2010

YU, WOONG-SANG

PPP for Universities

PPP for Schools

Educational Aspects

Contents

Key Subjects to do

PPP General

1

Ⅰ. Educational Aspects

1. School Systems

2. Basic Statistics

3. Enrollment Trends

4. Educational Achievements

5. Distribution of Authorities

6. Architectural Changes

2

Levels Duration Ages Remark

Pre-School 3 Years 3-5

Primary Education 6 Years 6-11

Compulsory

Lower Secondary 3 Years 12-14

Upper Secondary 3 Years 15-17

Higher Education 2 ~ 6 Years 18+

1. School Systems

3

Classification

No. of Schools

TotalNational Public Private

Number % Number % Number %

Kindergartens 8,294 3 - 4,445 54% 3,846 46%

Primary Schools 5,757 17 - 5,664 98% 76 1%

Middle Schools 3,044 10 - 2,372 78% 662 22%

High Schools 2,218 17 1% 1,246 56% 955 43%

Special Schools 144 5 3% 50 35% 89 62%

Junior Colleges 152 3 2% 8 5% 141 93%

Under Graduate 220 41 19% 2 1% 177 80%

Graduate 36 36 100% - - - -

2. Basic Statistics

4

Step-by-step attainment to universal education

-10

10

30

50

70

90

1970 1975 1980 1990 1995 2000 2003 2005 2006

Primary Lower Secondary Upper Secondary Tertiary

Elite Mass Universal

3. Enrollment Trends

5

* TIMSS : Trends in International Mathematics and Science Study (50 countries)

* PISA : Program for International Student Assessment (57 countries)

Rank

TIMSS 2007

(8th graders)

PISA 2006

(15 yrs old)

Math Science Math Reading Science

1

2

3

4

5

:

:

11

Taiwan

Korea

Singapore

HK-China

Japan

:

Singapore

Taiwan

Japan

Korea

England

:

Taiwan

Finland

HK-China

Korea

Netherlands

:

Korea

Finland

HK-China

Canada

New

Zealand

:

Finland

HK-China

Canada

Taiwan

Estonia

:

:

Korea

4. Educational Achievements

6

Assemblies Administration Responsibilities

National Assembly MEST• Higher Education• Educational Polocies• R&D

Local Assembly

16 PEAs School Education

180 LEAs Primary and LowerSecondary Education Pre-School Education

5. Distribution of Authorities

• MEST : Ministry of Education, Science & Technology

• PEA : Provincial Education Authority

• LEA : Local Education Authority

7

Set Education System

Economic Development Plan/Compulsory Education Plan(5 Year)

Rapid Urbanization

☞ Quantitive expansion of school building

Provision of school building code

→ How many rooms & area per class

Development standardized floor plan for school design

City type/Rural Type

Exclude private architect

☞ Mass production of school buildings

▒ Standardization(∼70’s) 6. Architectural Changes

8

9

GDP Increase – Enlargement of budget in education

5·31 Educational Reform – Self oriented learning

Open education, ICT use

☞ Doing away of inconvenient & uniformed education

Abolition of standardized plan – Partipation of private architect

Revision of school building code

Room & area per class → area per capita

Investment on focused theme

Modernization of rest room(„85∼‟90)

Improvement of school building condition Ⅰ/Ⅱ/Ⅲ („90∼‟05)

Enlargement of building area(„01∼‟04)

☞ New building structure, Open classroom

▒ Modernization(80’s∼90’s)

10

11

Welbeing trends

Private sector participation in decision making process

Expansion of local autonomy

Application of PPP in schools

☞ Adopt diverse needs & way of school procurement

Consolidation of school environment & sanitation

Diverse selection of architect

PQ,+Bidding, Design competition

Implementation of PPP in schools

Provide community school center

Certification of environment friendly school

☞ Indivisualized design, diversified school buildings

▒ Diversification(00’s∼)

12

13

Ⅱ. PPP General

1. Procurement Methods

2. Process/Comparison

3. PPP Governance

4. PPP Scheme

5. Strength/Weakness-Participants

6. Strength/Weakness-Government & School

14

Old fashioned : Government initiative

1st Compulsory school build(„62∼‟66)

2nd Compulsory school build(„67∼‟71)

Modernization of school rest room(„85∼‟87)

Modernization of primary school buildings(„90∼‟92)

1st Improvement of school building condition(„89∼‟91)

2nd Improvement of school building condition(„96∼‟00)

3rd Improvement of school building condition(„01∼‟05)

7·20 Enlargement of building area(„01∼‟04)

PPP('05 ∼) : Public Private Partnership

1. Procurement Methods

15

• Performance requirements & services• Appraisal methods for business proposals• Management of risks

Request for Proposal(RFP)

• Plans on design/construction/operation• Method of management, cost, risk control

Appraisal of business proposals

• Settlement on design/construction/operation• Settlement in project cost/condition

Negotiation/Agreement

• Maintenance & management/service level

Monitoring

• Students accomodation

Set of School facilities investment plan

PPP

• PSC & PFI

VFM(Value for money)

• Criteria• Specifications/Drawings

Design

• Specifications• Drawings• Supervision, Inspection

Construction

• Security• Cleaning• Maintenance

Operation

Old fashioned

2. Process/Comparison

16

MOSF

Law, Plan

MEST

Guideline, Budget

PIMAC

National Projects

EDUMAC

Educational Projects

PEA/National University

PPP execution – VFM/RFP/Nego/Agreement/Mornitoring

SPC

PM, Financing, Design, Build, Operation

Consulting/Approval/Evaluation

3. PPP Governance

17

* SPC : Special Purpose Company

SPC

Government

Supervisor

DesignBuild

Operation

Stockholder

- Bank/Fund/Company<Government bond + α>

Lender

- bank/fund/insurance<Coporate bond + β>

Donation & leaseRight of use & Payment

Payment Service contract

Dividend

Equity

Interest

Loan

Contract

Fee

selection

4. PPP Scheme

18

Strengths Weakness

Architect

expansion of participationopportunities in school design get competitiveness for school design expert

subordinated to general contractor absence of open competition

Construction increase the volume of business create new business

in charge of risk subordinated to financial investors

Operation increase the volume of business create new business

needs for big size

Financing safe $ long term investment expansion of loan market

sensitive to interest change difficulty in risk management

Project Management

create new business acquire new market

crowded

5. Strength/Weakness-Participants

19

Strengths Weakness

Authority

overcome financial limit

financial elasticity

secure urgent facility

without budget

effective use of public asset

outsourcing public officials

plastic finance for the future

difficult process such as nego

objection to the outsourcing

increase operation cost

gap between ppp school and

existing school

School

service level upgrade

exclude principal‟s duty on

building maintenance

reduce principal‟s obligation

on security

agreement for

uncertain future(20 years)

no reflection of user‟s need

possibility for blind spot

6. Strength/Weakness-Government & School

20

Ⅲ. PPP for Schools

1. Educational Expenditure

2. Dilemmatic Agenda

3. PPP Investment

4. Progress

5. Implementation

6. Features

7. Performance appraisal

8. User satisfaction

9. Problems/Solutions

21

1. Educational Expenditure

22

Decrease children ⇔ Increase school building expenditure

Primary school Middle school High school

2010 3,297 (100%) 1,962 (100%) 2,069 (100%)

2020 2,510 (76%) 1,291 (66%) 1,364 (66%)

2030 2,209 (67%) 1,131 (58%) 1,175 (57%)

2050 1,525 (46%) 838 (43%) 909 (44%)

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 SUM

111 171 295 209 174 960

< Projection of school age >

< Needs for new school >

2. Dilemmatic Agenda

2011~2015 2016~2020 2021~2025 2026~2030

needs yearly needs yearly needs yearly needs yearly

buildings 7,191 1,438 5,476 1,095 8,147 1,629 7,024 1,405

KRW 86,158 17,232 68,407 13,681 114,037 22,807 83,878 16,776

< Needs for refurbish >

23

Prospects

Fianacial situation for education

Increase of school operation expense

Enlarge for educational welfare - school meals, child care

Investment for school facilities

Steady demand for new schools in the newly developing area

– About 100 schools per year

Continuous needs for refurbish/remodeling old buildings

Application principles for PPP

Giving priority to new buildings, Re-build & Extension subject to financial condition in PEA

Yearly accumulated repayment in BTL is limited to 2% of

budget expenditure of each PEA

3. PPP Investment

24

Introduction(‟05)

Stabilization(„06∼‟09)

Advancement(„10∼)

First application

in schools

Set up agency

Provide manual

Appraisal

Improve business

structure

4. Progress

25

YearAmount of

Money(million $)

Execution Agreement Operation

Bundle School Bundle School Bundle School

2005 1,264 38 222 38 222 38 182

2006 2,200 62 411 56 411 58 337

2007 1,639 36 318 40 267 32 201

2008 856 24 153 20 91 7 25

2009 770 17 60 Under Construction - -

2010 641 14 43 - - - -

Total 7,370 191 1,207 154 991 135 745

5. Implementation

26

Business work scope of SPC

Construction : design, construct, supervise

Operation : Clean, security, maintenance and repair

Funding

Monitoring

bundling

Combined business execution of several schools for

economy of scale

3∼5 schools/300∼500 million USD

SPC

⇒ Weekly/Monthly

Measurement

Local Agency

⇒ monthly

Inspection

Appraisal committee

⇒ quarterly

Appraisal

6. Features

27

Equity Share structure in SPC

Financial investors

7. Performance appraisal▒ Key Indices

Year Financialinvestors

Operators Constructors Designfirms

2005 73.8% 18.2% 8.0% -

2006 74.3% 15.9% 9.8% 0.1%

2007 82.2% 6.3% 11.6% -

2008 68.7% 7.5% 23.9% -

2009 71.8% 18.5% 9.7% -

Year Bank Securities Insurance Funds Pension &Foundation

Etc.

2005 37.6% 20.7% 22.6% 18.7% - 0.4%

2006 30.7% 31.6% 9.9% 24.5% - 3.3%

2007 7.8% 25.9% 13.7% 33.0% 14.8% 4.9%

2008 29.9% 34.3% 1.1% 34.8% - -

2009 31.3% 30.9% 0.0% 18.9% - 18.9%

28

< Site Plan >

< Floor Plan >

< Method of appraisal >

PSC : 21 applicants for best school facility contest by MEST

PFI : 90 schools of notified projects ※ Appraisal scale : 5 points

Land usage outdoor spaceapproach/

movement

PSC 4.38 4.24 4.33

PFI 4.45 4.60 4.32

Zoning/

movementUnit plan

Indoor

space planBarrier free

PSC 4.00 4.14 3.86 3.86

PFI 4.29 4.24 4.11 4.11

▒ Design Quality

29

8. User satisfaction

Survey Brief

Period : 2009. 7. 3 ∼ 7. 17

Samples

Old fashioned school : 53

PPP school : 47

Targets : 19,032(Student/Parent/Teacher/General Staff)

30

Comparison of user satisfaction

Facility Service Environment

Old fashioned 60.7 59.7 57.5

PPP 59.4 57.6 57.3

Weakness for financial crisis

Primary financial institution including banks shy away from participation due to unstability of financial markets for foreign currency exchange/interest rate

☞ Subject to market mechanism

Gap between existing schools and new ones by PPP

PPP schools‟ level of facilities & operation higher than existing schools

☞ Enlargement of investment to improve conditions in existing schools

Excessive initial investment cost, low competition Cost for making business proposals excessive,

low competition ratio due to low profit

☞ Reduce the proposal cost through simplication of proposals and indicate a proper cost

9. Problems/Solutions

31

Ⅳ. PPP for Universities

1. Situations/Application

2. Dorm Projects

3. PNU Hyowon Complex

4. UNIST

5. DGIST(on going)

32

Process of Project Selection

Principles of PPP Application Students welfare/Sports/Cultural Facilities Expansion

Universities basic/research facilities for lectures/research excluded Prevent university presidents from indiscrete investments

Large scale projects such as new universities establishment of new national universities

Guidelines [MOSF/MEST]

Apply[Nat‟l Univ.]

Review [MOSF/MEST]

Situations Enough area for basic function such as lecture, library

Insufficient space for research & leports

Gap between national universities

1. Situations/Application

33

Features Targets of Application

Increase of student occupancy ratio : 8%(FY 2004) → 22%(FY 2011)

Major portion of rent fee to be paid by University

⇒ Gov‟t grant : 30%(Seoul area), 25%(Metropolitan area), 20%(Others)

Operation cost to be paid by Universities(Students)

bundling 2∼4 Universities by regions for economy of scale

Work scope of Operation : Cleaning/Security/Maintenance etc.

Auxilliary business : CVS/Foodcourt/Health/Laundry/billiards etc.

Implementation

2005 2006 2007 2008 2009 2010

No. of bundling 10 2 1 1 1 1

No. of Univ 27 4 1 1 1 1

2. Dorm Projects▒ Execution

34

2. Dorm Projects▒ Questionnaire

※ Source : University News Network, http://www.unn.net/news/detail.asp?nsCode=63709

Reasons in favor of PPP dorm

Voting in favor of PPP dorm

Reasons of opposition to PPP dorm

35

Floor Area(㎡) % Usage

7F 1,594 2.9 Clinics, Roof garden

6F 4,468 8.2 Lifelong Education Center, Exhibisition

3 to 5F 11,220 20.7 Multiplex

2F to -2Ｆ 23,390 43.1 Bookstore, Pharmercy, bank, Postoffice Food court Shopping mall

-3F to -4F 13,609 25.1 Parking

Total 54,281 100

Project Features Make best use of the site between Univ and Community

Educational+Cultural+Leports+Commercial Complex

Operating & Managing Period : 30 years

Floor Area & Usage

3. PNU Hyowon Complex

36

Aerial View

37

Project summaryNew Nat‟l University in Ulsan area

USIT : Ulsan Science Institute of Technology

Specialized for science & technology Small scale : projected enrollment of 4,000 students

Project Features Area - site : 1,028,200㎡/total floor area : 153,801㎡

Work scope of operation Clean, Security, Maintenance, computer network, mail etc.

Auxiliary Student dormitory, APT for faculty & staffs, gymnasium,

service facilities such as convenience store/restaurant

Operation of parking lots and school bus

VFM : Suggested 96.7%/Agreed 96%

4. UNIST

38

Aerial View

39

Project Features Area capacity - site : 478,087㎡/total floor area : 192,182㎡

Operating & Managing Period : 20 years

Construction period : 2010.11 – 2014.4(42 months)

5. DGIST(on going)

Facility floor area 용도

Education 76,682㎡ Classroom, Laboratory

Support 65,189㎡ Lecture, Administration Office, Library, Conference

Housing 39,480㎡ Dorm, Guest house

Parking lot 10,831㎡ Underground floor

Facility Area & Usage

Project summaryNew Nat‟l University in Daegu area

DGIST : Daegu Gyoung Science Institute of Technology

Specialized for science & technology Small scale : projected enrollment of 2,000 students

40

Aerial View

41

Ⅴ. Key Subjects to do

1. Service Monitoring System

2. PPP Model for Energy Saving

42

Problems

Can‟t check service level on real time

Excessive paper work – not practical

Different FMS according to SPC – Waste money

Can‟t build DB for LCC

Current way of monitoring

Suggestions

Develop on-line mornitoring system for SPC‟s service

Measure service score – Penalty on poor score

☞ Developing “PPP Service Monitoring System”(On going)

SPC Report Site Check Confirm

Daily/Weekly/Monthly

SPC + School

Monthly/Quarterly

SPC + Authority

Quarterly/Semiannually

Monitoring Comittee

1. Service Monitoring System

43

동 선택

Site Plan Section

층 선택

Floor Plan Ceiling Plan

오브젝트 선택교실 선택

Choice

STEP 4STEP 3

STEP 1 STEP 2

44

PPP Service Monitoring System

보수 교체 파손

Title lamp

Contents Lamp is out.

저장 취소

시설 코드 서초중학교(본관)

공간 위치 3층 3학년 2반

고장위치 형광등 R06

3층 3학년 2반 교실

형광등

오브젝트 선택

시설물 천정 형광등

Claim Confirm Site check Register Review

원하는 항목을 도면에서 클릭하여정보를 받아서 활용

체크된 상태에서 아래의 민원내용의저장시점에 이미지로 저장되어민원처리를 위핚 운영자에게제공된다.

45

Problems

Sometimes no supply cooling/heating due to no money

Neglect LCC on SPC‟s proposal

Low initial cost – high operating cost

exclude alternative energy such as geothermal heat

SPC doesn‟t care about energy saving in operation stage

Suggestions

Monitoring energy consumption on real time

Appraisal tool of energy performance for school building

☞ Develop new PPP business model for energy saving(On going)

Current Situations

Electric cooling/heating system in every school - expensive

SPC‟s work scope – only for mailtenance not for operation fee

2. PPP Model for Energy Saving

46

Energy saving factor in school building

About 36% Energy saving

Thank You !!!