Our economic consultants and commercial advisers have extensive experience advising government and private sector clients on complex commercial, public policy and economic issues.
Business case development
A business case provides decision-makers, stakeholders and the public with a management tool for evidence-based and transparent decision-making. As economists and commercial experts, we approach business case development with rigorous attention-to-detail to ensure that decision-makers can make a robust, objective and merit-based assessment of a proposed project.
A cost-benefit analysis is a powerful tool for decision-making, designed to assess the economic, social and environmental benefits and costs of a project. NineSquared has significant experience helping governments and investors around the world make better-informed investment decisions on large and small projects using cost-benefit analysis and other appraisal techniques.
NineSquared has experience developing bespoke prioritisation models that account for the complex interdependence, conflicting goals and objectives, and dynamic nature of projects. We understand that projects may be interdependent, part of a larger program or portfolio, and that budget allocations may need to evolve in response to changing events. We’ve designed our project prioritisation process to provide the clarity and transparency you need to make future investment decisions.
Contract and franchise design
Long-term contract and franchise design
Effective contract and franchise design in long-term contracts is essential to ensure the contract is effective across its life, providing for an ongoing, effective allocation of risk, operational performance and value for money for both parties.
NineSquared consultants have experience in leading and contributing to long-term contract and franchise design for a range of transport and technology services. We have a wealth of experience consulting on the design of long-term contracts, translating contract design requirements into procurement and evaluation processes, identifying appropriate long-term funding mechanisms, and providing expert advice on market sounding, negotiation design, and the likely impact of long-term contracts on market outcomes.
Leveraging our extensive experience working with the government to procure long-term contracting arrangements, NineSquared assists clients in the private sector with preparing, designing and executing bid strategies to achieve long-term government contracts.
NineSquared’s bespoke modelling solutions help our clients answer important questions related to pricing, investment decisions, negotiation strategies, bottlenecks in supply and potential future demand. We help our clients make informed decisions by synthesising complex data into logical concise analysis. Our models follow the principles of the FAST modelling standard and are subject to detailed internal quality assurance procedures.
We have expertise in a wide range of economic and financial modelling techniques, including cost-benefit analysis, input-output modelling, demand forecasting, and choice modelling. We can assist in the development of stochastic risk modelling techniques and decision tree models to incorporate the consideration of risk and uncertainty in the decision making process.
Our team has experience in financial modelling, including constructing 3-way financial models, performing discounted cash flow analysis for investment decisions, and using ratio analysis to assist with cost benchmarking.
With deep expertise in regulatory economics, NineSquared develops rigorous infrastructure pricing models to assist clients with understanding the sensitivity of prices to changes in key variables. We provide clients with expert advice when renewing a contract, engaging in price negotiations, reviewing the practical application of private infrastructure pricing contracts, or ex-post assessments of firm profitability.
Developing regulatory pricing models (building block model)
NineSquared has experience developing building block pricing models for Australian regulators, as well as major rail and port organisations. This model builds up each element of an organisation’s costs — including asset charges, operating and maintenance costs, and expected tax — to estimate a maximum allowable revenue to determine pricing. We have a detailed understanding of the model’s complexities, especially regarding the roll forward of the asset base and the integration of capital expenditure into the pricing.
When organisations create pricing for commercial arrangements between infrastructure users and infrastructure owners, it’s important that the terms of the agreement and its actual application align. NineSquared review and audit pricing models, developed from the regulatory building block model, to ensure consistency and alignment. The result is typically a material change in the charged price.
For assets or pricing that are not directly regulated, we can derive a pricing model from the information detailed in legal documents and conceptualise a robust Excel model to calculate the correct prices.
NineSquared has a strong track record in helping regulated entities and their major customers prepare for and negotiate review processes at the end of a regulatory cycle. Our expertise includes drafting responses to Draft Decisions, drafting technical papers on specific aspects of the review, and presenting arguments with respect to the weighted average cost of capital (WACC).
Assessing regulatory impacts
NineSquared offers clients a strong understanding of the economics of regulation, balanced with an understanding of the practical and commercial realities of industry. We deliver practical, sound advice to governments and the private sector about the economic and commercial impacts of regulation. Our robust analysis considers crucial factors such as industry structure, the potential for contestability, and the existence and impact of market failure.
Pricing and fare modelling
Fare and pricing strategy development
With significant experience in modelling the impact of pricing options and developing pricing strategies across transport sectors, NineSquared provides practical advice on pricing design and structure to ensure an organisation’s goals are achieved efficiently. Our analysis has helped public transport services, roads and airports consider:
- How fares and pricing structure align to achieve organisational goals
- How the structure of pricing will affect demand
- The impact of pricing on congestion and environmental concerns
- How competition and the structure of the industry might impact pricing flexibility
Fare and price modelling
NineSquared uses sophisticated demand modelling techniques and can undertake stated and revealed preference surveys to inform fares and pricing models for clients. Our modelling can include consideration of the revenue impacts from different pricing scenarios and estimate the behavioural response from customers to assess the impact on demand.
NineSquared has developed building block pricing models to estimate the maximum allowable revenue as a basis for establishing prices. We have a detailed understanding of the complexities of these models, particularly with regard to the roll-forward of a regulated asset base and the integration of capital expenditure into the pricing.
NineSquared consultants bring strong, practical experience to the analysis and design of public policy at both State and Federal government levels. Leveraging economic principles, our public policy analysis and regulatory reviews can take account of market failures, externalities, public goods, the impact of different financing methods on economic efficiency, and the distributional effects of policy initiatives and strategies.
NineSquared provides a practical and experienced policy development capability for public sector clients. We have direct experience working in and for government departments at senior levels in both central agencies and line departments. We can assist in developing an evidence base for policy, undertaking policy reviews or providing on-going assistance throughout policy development processes
NineSquared can assist businesses and peak bodies understand how both existing or proposed policies might affect them and their members. We can quantify the cost of regulation over time and can develop policy proposals and submissions to regulators on behalf of clients.
Project and program assurance
NineSquared provides experienced project and program assurance capability with senior consultants with substantial experience in undertaking gateway reviews, project and program risk reviews and developing frameworks for the on-going assurance of major projects and programs.