Better known for its capacity as a financial consultant and accounting auditor, KPMG International’s services as a consultant is less obvious and often overlooked. KPMG offers a wide range of consultant services, from information security and technology, internal audit and control, and financial consultation.

KPMG Head of Infrastructure, Government, and Health Steven Chen (陳文正) said KPMG’s services go hand in hand with projects for developing countries by multilateral organizations worldwide.

“These countries don’t necessarily need new technology; what they lack is help in financial engineering,” Chen said.

Many infrastructure projects, such as public transport, waste management, and streetlights, can be seen as a form of financial engineering, as the projects would impose upon the government a certain level of debt, and what methods, or the approach, the government adopts to handle that debt is where KPMG services come in.

The Amman Project
In 2016, KPMG Taiwan entered a consultancy service contract with the European Bank for Reconstruction and Development (EBRD) and the Greater Amman Municipality (GAM) in Jordan throughout the tender process for an energy-efficient street lighting modernization program.
The program would utilize a Public-Private Partnership (PPP) structure and an Energy Service Company (ESCO)/shared savings energy performance contract (EPC) model.

Balancing Needs and Profit
To facilitate GAM’s goal to decrease the electricity consumption by up to 50 percent per year and successfully attract an investor, KPMG has to assist GAM to design the tender to attract the potential ESCO investors under the EPC model.

The ESCO/EPC model meant that the more GAM reduces its electricity costs, which at the time was based on the annual cost using sodium lights, the more the contractor stood to profit, KPMG Taiwan Director Mickey Lin (林文棟) said.

The team set out a ten-year life cycle for the project, which covers construction and installation, operation, and transfer.

“We typically provide consultation for the viability assessment and the methodology depends on whether we are brought in for technical, financial, legal, and procurement” Lin said.

The team would bring in experts for other aspects, such as construction and operation, or other specialties, when necessary.

During the bidding stage, the team’s services would vary depending on whether it is assisting the government or a private entity; KPMG would assist with setting down technical and financial standards if assisting the government and would assist private companies to understand and meet government-standards for the bid.

Outlining and Implementing Project Bidding Processes
KPMG Taiwan assisted GAM in establishing financial and technical standards for potential investors to ensure that the project achieves its target goal.

The technical specifications proved more challenging, as the municipality has stated it must retain control of all light fixtures in the project’s initial phase, and the KPMG team must strive to balance the available technical specifications on the market, GAM’s demands, and the potential investor’s capability.

Tasked with assisting the municipal government with finalizing technical specifics for its project goal, KPMG reached out to a tech consultant company – incidentally, the one which introduced KPMG to the project, named P&C Consulting Co. – to provide details regarding tech specifications of LED lights on the market.

We were the municipality’s eyes and ears, as we were contract-bound to analyze all risks that the GAM would encounter, Chen said.

“The municipality, of course, would have its view of how it wanted to conduct the project,” Chen said, stating that the team tried to accommodate such decisions accordingly.

Such decisions would go on to affect project details, such as whether the number of lights should be increased or decreased, what specifications are required for what sections, and most importantly, who would shoulder the responsibility and inherent risks, of construction and operation.

Once the KPMG team decided what specifications would best meet GAM’s needs in the project, the KPMG team had to conduct market sounding and take the specifications to other companies in the industry and determine whether the specifications could be realistically achieved.

Moreover, KPMG will also have to ascertain that interested parties are financially and technologically qualified to take up the project.

Project Conclusion
KPMG completed the contract per its agreement at the start of the contract in 2016, when it signed on for the project stating that it would, to the best of its ability, assist the municipality and arrange at most three bidding ventures, after which KPMG Taiwan would consider the contract to have been fulfilled.

Overall, GAM’s adoption of the PPP system would present the municipality with less of a financial burden, as it not only stretches out the payment cycle, but also provides an incentive for the contractor to do its utmost to observe prices, as the contractor’s source of income for the project depends on how much it helps GAM save from its yearly electricity bill.

Current Ongoing Projects Abroad and Domestic
KPMG Taiwan is also engaged with the city government of Ulaanbaatar, Mongolia, to assist it with debt management in a solid waste project.
KPMG Taiwan had delivered it EOI on the project as early as 2017, but the Ulaanbaatar city government had delayed its response until July 2019, Lin said.

The project had been further delayed by the outbreak of the COVID-19 pandemic and the official contract was only signed in June this year.

In addition to the Ulaanbaatar project, KPMG Taiwan has also taken on several cases in Taiwan, including two waste-water handling projects for the Taoyuan special municipality, a biomass build-operate-transfer project being planned in Kaohsiung, and being involved in the financial planning of the green line for the soon-to-be-built Taoyuan MRT.

Selling Points

• Providing the connections to facilitate a clearer understanding of technical specifications available on the market and assisting clients to select products it needs to for the project
• Utilizing professional knowledge to establish financial standards for potential bidders and assisting its client in holding potential contractors to high standards
• Laying out for its client the risks, as well as pros and cons, for different choices its clients made regarding the particular project structure being utilized