Why do private initiators struggle to agree with the government?

A private initiator arrives with a polished presentation, sometimes even with a financial model. The IRR is calculated, the capital structure is in place, the tariff sensitivity is there. Forty minutes later the meeting in the official's office is over, and the initiator leaves feeling misunderstood.

In fact, he was answering the wrong questions.

Investor and government look from different sides

The investor thinks: how much will I make, how much can I lose, when and how do I exit. The government has not even got to the money yet. It asks: what problem does this solve for people?

The government's questions, in order

1. Is there a public duty to provide this service: water, roads, hospitals, schools. If not, there is no point going further. A factory, warehouse or hotel can be an excellent investment, but it is not a PPP, and no financial model will fix that.
2. Does the project fit sector priorities? A good idea outside government priorities will not get through.
3. Why a PPP rather than ordinary public procurement, or simply a building permit and private operation? "The budget does not have to pay now" is not an answer. Worse is when the real reason is that under a PPP the land comes without a tender.
4. Can it be procured under the law? The official looks at the procedure: how to announce the tender, what to write in the justification, who the second bidder will be.
5. Will the decision survive scrutiny by the audit chamber, the press and the next government? If the project smells of preference for a particular investor, commercial logic will not save it.

Only then does the conversation reach the money, which is where the initiator started.

Two cases

• For the government: public benefit, fit with priorities, transparency, feasibility.
• For the money: clear risk allocation, predictable revenue, returns, a workable deal structure.
• For the banks there is a third: tenor, repayment and cost.

Weak proposals sacrifice one for the other, usually the first, because public benefit is harder to quantify.

That is the adviser's job: not to "package the project" but to structure the deal so that the official can approve it without personal risk, and the bank can finance it without a long list of caveats.

First published in Russian in the Telegram channel «Просто о ГЧП» on 7 August 2026.