- Managing Director, Head of South Africa Economic & Financial Consulting
- Economic & Financial Consulting
- T: +27 21 487 9030
- F: +27 21 426 0582
- 8th Floor
- 125 Buitengracht Street
- Cape Town, 8001
- South Africa
- T: +27 21 487 9000
- F: +27 21 426 0582
- B.A., (Hons), University of Cambridge
- Chartered Accountant (CA), Canadian Institute of Chartered Accountants
- Member of the Energy Institute
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Economic Consulting
- Expert Testimony
- International Arbitration
- Regulated Industries
- Energy, Power & Products
John Lisle is a Managing Director at FTI Consulting where he leads the Economic and Financial Consulting (EFC) practice in South Africa. For more than 25 years Mr. Lisle has worked on financial and economic consulting assignments for a range of clients, particularly in the transport, infrastructure, energy, utility and telecommunications industries. He has particular expertise in the areas of regulation, pricing, valuation and cost allocation, and has applied this expertise on assignments for businesses, regulators and governments, in contentious and non-contentious contexts. He joined FTI Consulting in London in March 2011 and relocated to South Africa in April 2015.
Mr. Lisle’s project experience has included the production of independent expert reports for submission to government departments, courts, arbitral panels, tax authorities, competition, and regulatory bodies, and work included in the documentation supporting major international corporate transactions. He has also worked on a number of due diligence assignments as well as on consulting and advisory projects related to pricing and strategy issues in a range of sectors.
Prior to joining FTI Consulting Mr. Lisle was a director at LECG, a firm he joined in September 2003. He was formerly a senior manager in Arthur Andersen’s economic and financial consultancy group and then a director in the economic consultancy division of Deloitte.
Mr. Lisle is a graduate of the University of Cambridge and a Member of the Institute of Chartered Accountants.
During his career John has worked for clients throughout Europe as well as in Asia, Africa, the Middle East and the Indian sub-continent.
Examples of John’s experience can be found below.
- In the context of international arbitration, provided advice to a major international chemicals company on calculation of damages arising from alleged infringement by one of its licensees of the terms of a technology licence. Damages were calculated both as an account of the profits earned from the alleged infringement and as the amount payable as a reasonable licence fee.
- Managed a team of up to 10 staff engaged to quantify the damages arising from infringement of patents in the chemicals industry. This project involved collating and analysing a very large amount of technical, operational, and financial data related to the operation of the plant before, during, and after the period of infringement as well as consideration of the alternative technologies that could have been used in order to estimate the value attributable to the use of the patented process. Damages were calculated separately for infringements that occurred in the UK and in South Korea.
- Advised the owners of recently constructed West European CCGT on the quantification of its losses arising from the early termination of a long term gas supply agreement and the losses to be counterclaimed for the failure to renegotiate the terms of the contract in a manner consistent with market practice.
- Led the team responsible for the valuation of an equity stake in a Polish electricity generation company. This work was conducted in the context of a UK High Court litigation arising from the bankruptcy of the owner of the stake.
- Provided advice to the former owner of a UK power station engaged in a dispute regarding the calculation of termination payments under a gas tolling agreement.
- Provided advice to one party to a dispute arising from the collapse of a major European energy utility. The scope of work encompassed assessment of the value of a wide range of different claims.
- Led a team involved in estimating the quantum of loss arising from early termination of a distribution agreement in the UK specialist cheese market. This work resulted in the production of independent expert reports that were used as evidence in court and which concluded that the damages suffered were considerably lower than those initially claimed.
- In the context of a Swiss arbitration, advised a large West European gas supply company on the possible re-negotiation of the pricing terms of a bulk natural gas supply contract for delivery in another European country.
Mining, Minerals and Metal Processing
- Provided advice to a large multi-national mining and commodity trading group on determining the costs it incurs in supplying coal to one of its large customers and analysing the underlying drivers of changes in this cost over the duration of a long-term supply agreement. This analysis was undertaken in the context of an arbitration under the terms of the contract triggered by the operation of a hardship clause.
- In the context of international arbitration, responsible for the production of an expert report on the damages suffered by an investor as the result of the alleged breach of a management agreement under which the investor had the exclusive right to invest in and manage an ore mining and associated metal processing industry in a West Asian country.
- Produced an expert report on the commercial reasonableness of the terms of agreements between a Central Asian aluminium producer and its suppliers and customers. This report was produced in the context of international arbitration.
- In the context of an ICC arbitration, advised an oil company on the assessment of damages arising from alleged breaches of warranty following the sale of an oil refinery in Eastern Europe. The core issues in the case related to the impact on the refinery of an interruption to the supply of crude oil, the impact of a fire that constrained production of certain products, how the effects of the reinstatement work may have increased the value of the refinery and the cost of capital which should be used in the calculation of losses.
- Assisted with the production of an expert report on the valuation of an oil refinery and the factors affecting the price realised for oil refineries at auction. This work was undertaken in the context of an ICC arbitration.
- Assisted with the valuation of a claim lodged by a major UK book publisher and retailer arising from the failed implementation of automated warehousing equipment at its distributor’s main warehouse.
Technology, Media and Communications
- Acting as advisory expert on the quantification of damages arising from the wrongful termination of a contract to install a large IT system for a government agency. The damages are to be calculated as the wasted costs incurred but not funded by the customer plus interest. Key issues in this matter include the allocation of fixed and common costs and how the project was financed.
- Provided advice on the damages suffered by the operator of a satellite pay TV network in the Middle East as a result of a breach of contract. The expert report produced in this case covered extensive analysis of projected costs and revenues under a range of alternative assumptions and the calculation of an appropriate cost of capital to be applied for an investment in this sector in emerging economies.
- In the context of UK court litigation, provided advice on quantum and other issues in a dispute arising from the abandoned implementation of a pan-European ERP system. The scope of this work included review of the support provided by each party in support of the quantum of its claim together with an assessment of the impact on the business and the extent to which partial completion of the project resulted in the creation of value.
- Advised a major UK retailer on quantum related issues arising from the allegedly failed implementation of a company-wide enterprise resource planning system.
Transport and Infrastructure
- Advising an airline on the quantification of damages to be claimed from a larger rival airline following a finding by the national competition authority that the latter abused its dominant position in the relevant market. Key issues in this case are determining the market shares of each airline in the scenario in which no abuse was committed and identification of the costs which the smaller airline avoided as a result of having a reduced market share due to the abusive conduct.
- Produced a rebuttal expert report in connection with the damages allegedy suffered by a low cost airline following the imposition of an additional security charge by an airport in Eastern Europe, the effect of which it is alleged was to result in reduced ticket sales.
- Assisted with the production of an independent expert report submitted to a court in Estonia in a dispute over the appropriate calculation of railway infrastructure access charges. This project involved considering the valuation of assets, the allocation of costs between different services and determining the appropriate rate of return.
- Provided advice to a railway operating company in the UK on the approaches that might be adopted to calculating its losses in the context of a contractual dispute over the performance of revenue protection activities.
- Advised a franchisor in the express parcel sector engaged in a dispute with its franchisees over the level of network transportation charges. The scope of work involved calculating the fully absorbed costs incurred in providing transportation services to each franchisee based on the pattern of originating parcel volumes.
- Advised one of the world’s largest fast moving consumer goods companies on how it should calculate the costs of its products for the purposes of determining the compatibility of the company’s discount structure with EU competition law. This work has covered the operations in ten countries and has included preparation of reports for submission to multiple national competition authorities.
Mining, Minerals and Metal Processing
- Provided advice to a large cement business on cost, profitability and rate of return issues in connection with the UK Competition Commission’s investigation of the aggregates, cement and ready-mix concrete markets.
- Performed a review of the policy manual used by an oil company to set the transfer prices for products, feedstocks, chemical intermediates, and services sold or provided to other members of the group. Where appropriate, the resulting report challenged the principles adopted as well as various components of the calculations.
Technology, Media and Communications
- Advised a state-owned European broadcast transmission network operator on the development of a tariff structure for the introduction of digital terrestrial television. The scope of the advice provided includes the cost of capital to be applied and the basis for the allocation of common costs. Key challenges for the client were setting charges on a basis which was oriented to costs and which did not give rise to allegations State Aid or distortion of the market for inter-platform competition.
- Provided advice to a European broadcast transmission network operator on the level of charges it levied to an independent TV channel in the late 1990’s and early 2000’s in the context of a claim for excessive pricing.
- Advised RTÉ and RTÉNL on how to respond to ComReg’s formal information request in the context of ComReg’s market investigation into the wholesale broadcasting transmission market in Ireland, and its proposals to introduce additional ex ante regulation.
Transport and Infrastructure
- Advised Gatwick Airport Limited on its submissions to the CAA during its market power assessments of Heathrow, Gatwick and Stansted airports. Assisted client staff with drafting responses to the CAA’s initial findings on issues such as the approach to market definition and the robustness and applicability of certain evidence on which initial conclusions were based.
- Advised the owner and operator of a toll road in Eastern Europe on its submissions to the European Commission in connection with an allegation that the terms of its concession agreement constituted State aid.
- Advised a port user on the determination of a reasonable tariff for the exclusive use of a dedicated port facility which was essential to its operations. This case involved consideration of regulatory and competition law-based approaches to determining an appropriate level of charges as well as the terms of the Harbours Act. Key areas for analysis included the appropriate value that should be ascribed to the assets in question and the appropriate rate of return which should be earned on those assets given the allocation of risks and responsibilities between the port user and the asset owner.
- Advised a European government on issues related to the scope for competition between terminals at a congested capital city airport. This advice was provided in the context of both an investigation by a competition authority and a court action.
- Advised the Water Industry Commission for Scotland on options for the further development of competition in the water industry in Scotland.
- Assisted the Authority for Electricity Regulation in Oman with setting the price controls the price control which will apply to the five regional electricity distribution and supply monopolies from 2015.
- Responsible for the analysis of, and subsequent production of two reports on, the appropriate allocation of costs between the generation, transmission, distribution, supply, and non-electricity businesses of Scottish Hydro-Electric. This report was included as part of the company’s submission to the UK Monopolies and Mergers Commission’s investigation into the company’s tariff levels.
- Managed the review of the financial model developed by Ofgem, the UK energy regulator, for use in setting electricity distribution network operator price caps during the fourth Distribution Price Control Review.
- Advised a UK electricity transmission company on its strategy for the forthcoming review of its charges and assisting the company with development of its business plan and other submissions to the industry regulator with a view to a possible subsequent appeal of the determination to the Competition Commission.
- Led a team that advised the Electricity Supply Board (ESB) in Ireland on estimation of the weighted average cost of capital for its transmission and distribution businesses. This work was undertaken in the context of a price control review of ESB’s electricity transmission and distribution charges.
- Assisted a UK electricity distribution and supply company with the conduct of tariff profitability analysis and development of an issue paper for submission to the UK electricity regulator in support of the company’s suggestion that all tariffs should be rebalanced in advance of the introduction of competition.
- Advised Enemalta, the state-owned electricity and petroleum products company in Malta, on restructuring and rebalancing of electricity tariffs. This project involved calculation of the current and future levels of operating and capital cost, identification of cost drivers and development of alternative tariff structures appropriate to the economic and social circumstances of the country.
- Advised an African gas company on the introduction of independent third party regulation. The scope of this assignment covers assisting the company with the development of its position on all aspects of the regulatory regime and the development of its submissions to the regulatory authorities, including how the cost of equity should be determined and how costs should be allocated to determine the cost to serve different categories of customer in different locations.
- Advised a major European gas distribution company on its regulatory strategy and its response to the regulators proposals for how price controls should be set in future.
- Advised a UK gas distribution company on its strategy for the forthcoming review of its charges and assisting the company with development of its business plan and other submissions to the industry regulator with a view to a possible subsequent appeal of the determination to the Competition Commission.
- Assisted Bord Gais address issues connected with the introduction of a third party access regime to the gas industry in Ireland. This work included consideration of the options for the development of a transportation tariff regime for the onshore network and the interconnector, a review of the tariff calculation model, advice on the introduction of interruptible carriage, a review of alternative approaches to charging for new connections and consideration of the transportation tariffs and other business arrangement that might apply to the proposed offshore storage facility.
- Assisted the state-owned gas production, transmission, and distribution company in an Eastern European country with evaluation of alternative models for the structure of the gas industry. This involved identifying key stakeholder interests and using these as a screen by which to assess the relative attractiveness of alternatives. Provided advice on the likely impact of each option on the ability to raise external finance and on compatibility with the applicable EU Directive.
- On behalf of the formerly state-owned oil company in Slovenia, conducted a review of the various mechanisms that have been used in Europe and elsewhere to determine both the ex-refinery and retail price of refined products in periods when the market is moving towards liberalisation. At the conclusion of this project a report was presented to senior management suggesting a recommended scheme for Slovenia which was proposed to the government.
- Over a period of more than one year, led teams that provided economic and financial analysis services and case-making advice to Sasol in connection with two investigations by the South African government into the level of support afforded to Sasol’s synthetic fuels business. Appeared for Sasol or alongside Sasol representatives at meetings with the government and its advisers.
- Co-author of a paper on approaches to costing the Universal Service Obligation in the postal sector presented at the Rutgers University / Centre for Research in Regulated Industries conference in Finland in 2010.
- Provided advice to ComReg, the Irish communications sector regulator, on the regulatory accounting and reporting requirements that should apply to An Post, the Irish state-owned postal operator.
- Assisted Postcomm, the former-UK postal regulator, with a review of the commercial and financial terms of the inter-business agreements between the Post Office and Royal Mail. This project involved a detailed review of the cost allocation to determine the extent to which the fees and commissions charged reflected the underlying costs and benchmarking of these fees and commissions to those prevailing for similar services between unrelated parties and between the Post Office and third parties.
- Provided advice to the Postcomm on issues connected with the regulatory financial reporting obligation that should be imposed upon Royal Mail, the incumbent service provider.
- Assisted Postcomm in connection with the development of an access code to facilitate the use by third parties of elements of the Royal Mail postal network. This project involved the identification of candidate access points, development of screening criteria, evaluation of candidate access points, identification and resolution of practical and operational issues, development of an outline code and scenarios, and financial modelling to assess the likely impact on Royal Mail.
- Provided advice to the postal regulator in Slovenia on cost allocation and regulatory financial reporting issues.
Technology, Media and Communications
- Advised a national public service broadcaster on the development of its evidence to submit to the industry regulator covering the beneficial public impact and the market effects of its proposed new channels and services.
- Assisted a major European telecommunications company consider the likely impact of competition arising from the implementation of the EU Telecommunications Directive on its operations and of the need to develop a detailed understanding of the true economic costs of its operations prior to agreeing terms for interconnection and the development of a new regulatory regime. One aspect of this project was to advise the company on how it should determine the appropriate cost of capital that should be applied in the context of each business.
- Advised a European television and radio broadcaster assessed by its national regulatory authority to have significant market power in its national television and radio broadcast markets on the implications of remedies proposed by the regulator, and on alternative approaches to accounting unbundling.
- Provided advice to a directory publisher on the allocation of costs between businesses and the preparation of financial information for submission to the Office of Fair Trading in connection with the calculation of regulated prices for UK directory listing products. This project involved a review of the structure of the business and the existing basis of cost allocation, a review of regulatory and other precedent, and the development and evaluation of alternative approaches to the definition of business and the allocation of costs.
- Advised the monopoly provider of television and radio transmission and broadcasting services and facilities in a large West European country on the allocation of costs between services.
Transport and Infrastructure
- Advised Gatwick Airport Limited during the CAA’s Q6 price review regarding the future regulation of its services, including both the appropriate form of regulation and the level of prices. This work involved undertaking new analyses of costs to show how the costs of incremental capacity in the future, which may be indicative of prices in a competitive market, compare to the current level of regulated prices.
- Advised the state-owned owner and operator of a European capital city airport on submissions to its independent regulator on financial and economic issues in the context of an interim determination of airport charges. The central issue in this review was the funding of a major capital project, including how a target credit rating should be determined and estimating the cost of equity.
- Advised the UK Civil Aviation Authority (CAA) on BAA’s allocation of central and corporate costs between its airports and other businesses. This advice was provided in the context of the CAA’s Q5 review of the price control applied to BAA’s Heathrow, Gatwick, and Stansted airports.
- Advised Aer Rianta, the Irish airports company, on the valuation of its regulatory asset base in the context of preparing for the first price control review by an independent regulator.
- Advised a large water and sewerage company in England and Wales on its PR09 submissions to Ofwat, the UK water industry regulator. Assisted the client to ensure that it was prepared to challenge the price determination before the Competition Commission, if required.
- Advised Bristol Water in its challenge to Ofwat’s PR09 Final Determination before the Competition Commission. This involved assisting Bristol Water prepare its submissions to the Competition Commission, respond to written questions from the Competition Commission, comment on Ofwat’s submissions and responses and prepare for oral hearings. Attended the oral hearings with Bristol Water and assisted the company in preparing questions to be put to Ofwat’s representatives by members of the Competition Commission panel.
- Supported Northern Ireland Authority for Utility Regulation in setting a price control for Northern Ireland Water (“NIW”). Led the review of NIW’s strategic business plan and performed the quality assurance review of the work undertaken on a top-down efficiency study to determine the range of efficiency improvements that the closest comparators to NIW had been able to achieve and a bottom up review of NIW’s efficiency improvement programme.
- For the Water Industry Commission for Scotland (“WICS”), led a project to identify and quantify the factors that may constrain the size of water and sewerage capital investment programmes that can be delivered efficiently within a single price control period.
- Advised WICS on the methodology that should be used to calculate cost reflective departures to Scottish Water’s regulated wholesale prices for customers supplied under the terms of Schedule 3 to or Section 29E of the Water Services etc (Scotland) Act 2005.
- Advised the UK trade body of a major consumer-facing industry sector on the potential economic consequences of a proposed change in government policy towards the sector. This project involved analysing financial data on approximately 10,000 retail establishments and modelling the potential consequences on the financial viability of each of the proposed policy changes as well as the likely impact on direct and indirect employment.
- Advised an international oil company on the approach it should take to demonstrating the potential consequences on the financial viability of one of its refineries of the proposed construction of a major product importation and storage facility, and the relative economic impact on the local economy of the refinery and the proposed terminal.
- Provided advice to the government of Pakistan on the likely financial and economic impact of two proposed new oil refinery projects to be built by foreign investors. The project a detailed review of the financing and operating plans, and modelling the costs and benefits to the economy during the construction and operating phases. This study was undertaken as part of a wider review of inward investment incentives and involved making comparisons between the downstream oil and electricity sectors. Provided the government with information on the appropriate rate of return required by international investors, a revised inward investment incentive scheme and a new product pricing regime more closely aligned with industry norms.
- Managed Arthur Andersen’s investigation into the level of tariff protection required by Sasol’s synthetic fuels business in South Africa. This project required detailed analysis of the transfer pricing between Sasol’s coal, synthetic fuels, chemicals, and oil businesses, an evaluation of operating and capital expenditure plans over an extended forecast period and an assessment of the contribution made by Sasol’s synthetic fuel business to the South African economy in terms of indirect and direct employment, foreign exchange reserves, and inflation. The final report was accepted by the South African government and formed the basis of new regulations covering the level of protection and the mechanism for its delivery to both Sasol and Mossgas.
- Advised the Water Industry Commission for Scotland on alternative ownership, financing and governance options for the water industry in Scotland.
- Project manager of a valuation of an equity interest in a recently constructed independent power plant in the UK.
- Provided strategic, valuation, regulatory, and pricing advice to a US utility during its due diligence review of a small monopoly gas distribution and supply business in a major city in an emerging market.
- Assisted with the pre-privatisation valuation of the petrol retailing business of the state-owned oil company in the former Czechoslovakia.
Technology, Media and Communications
- Assisted with the valuation of a manufacturer and installer of sub-sea telecommunications cables, routers, and related equipment.
- Assisted with the valuation of a manufacturer of networking routers, hubs, and related equipment. A key challenge in this assignment was to estimate the rate at which technological developments would impact on the volume, value and timing of sales from existing technologies and the profile of new product launches and the sales over their product life cycle.
Transport and Infrastructure
- Managed a project to assess the extent to which the observed increase in the value of an airport in a major European city that could be attributed to the construction of new transport links which significantly improved the accessibility of the airport.
Financial and Strategic Analysis
- Worked with the chemicals business of a global integrated oil company for a period of a year carrying out a variety of detailed financial analyses and valuations. These investigations were carried out in the context of the sale of over 50 separate businesses in more than 30 countries and included: identification of the relevant separable assets covered by the transaction; valuation of each of the individual businesses; and cost allocation studies used to determine the agreed price for the continued supply of petrochemical products and support services to the new owners in the immediate post-acquisition period.
- Led work on financial modelling and business planning in connection with the conversion of the electricity department of the Greater Johannesburg Metropolitan Council (GJMC), South Africa, into a standalone utility company owned by the council (CitiPower). Also involved in addressing industry structure and regulatory issues. Part of the team acting as the lead adviser to the council in this initiative which formed a key part of the iGoli 2002 initiative to transform the financial position of the GJMC and deliver significant improvements in the quality and cost effectiveness of the provision of municipal and utility services.
- Worked with the staff of an integrated UK electricity company in the successful completion of a company-wide study into the shareholder value generated by different market segments. Involved in the development of cost and asset allocation bases and identification of the appropriate risk-adjusted discount rate to be applied to the cash flows generated by each market segment. Subsequently assisted this client with cost allocation, transfer pricing, and risk assessment issues in connection with price setting and business development opportunities.
- Provided advice to a number of potential and actual acquirers of UK electricity distribution and supply businesses on the nature of the UK regime and the possible regulatory consequences of such acquisitions.
- Managed the team which applied activity-based costing principles to assist a UK car component manufacturer to assess the profitability of different customers and part types. The initial work undertaken at a UK manufacturing site produced results which allowed the company to take a number of cost saving and pricing decisions. The work will also form the basis for the rollout of similar initiatives across the company’s plants throughout Europe.
- Provided advice to a large state-owned energy company on the approach it should take to evaluating the financial and economic feasibility of investments across all of its operation throughout the world. In addition to providing advice on how appropriate discount rates should be calculated and applied, provided advice on the social cost of capital which should be applied when considering non-commercial projects undertaken in its home country at the direction of government.
- Led a strategic, financial, operational, and technical review of a small downstream oil refining and marketing company in Italy. This work was carried out in order to assist the client in determining whether or not to proceed to undertaking full due diligence procedures ahead of either acquiring a stake in the Italian company or entering into joint venture agreements.
- Advised Petrol, the former state-owned oil company of Slovenia, on the evaluation of a range of alternative options for the future of the Nafta Lendava oil refinery. The schemes considered in this review included: expansion; upgrading to reflect changes in national demand patterns and the planned introduction of cleaner fuels compliant with European Union directives; the development of a fuel oil fired combined cycle power station; various petrochemical plants; and closure with the option to convert the site to a product storage facility.
- Provided advice to the Central Energy Fund in South Africa on the economic viability of two major investment projects, a new offshore development and a condensate import facility, proposed by Mossgas, now part of PetroSA. This project involved undertaking a detailed independent review of all of the revenue, capital, and operating costs projections developed by Mossgas as well as updating the client’s estimates of likely returns and wider economic impact of each of the projects on employment, the balance of payments, and foreign exchange reserves.
- On a behalf of a European downstream oil company, undertook a high level review of the oil refining sector in Turkey and provided the client with an initial assessment of its attractiveness as a potential investment.
- Managed a team that worked on analysing the price realised by Urals grade Russian crude oil in different European market enclaves and assessed how these processes might differ in level and volatility if alternative pricing bases were adopted. The results were presented at a conference in Moscow, received coverage in the press, and were subsequently presented to senior members of the OPEC secretariat in Vienna.
- Working alongside a senior colleague, led and facilitated a three day workshop for senior management of an oil company which was held to help the company reach decisions on the future definition of the boundary between different businesses and the basis and level of transfer prices between businesses. Helping the client reach a conclusion involved identifying the incentive effects of different solutions, testing assumptions regarding the existence of perceived constraints, and developing recommendations consistent with competition policy.
Technology, Media and Communications
- Advised a UK provider of television and radio transmission and broadcasting services and facilities on the allocation of costs between services and on the level and structure of charges in the context of negotiating a long term service agreement with its major customers.
- LECG, Director, January 2009 to March 2011
- LECG, Principal, September 2003 to December 2008
- Deloitte, Director, Economic Consulting, August 2002 to August 2003
- Arthur Andersen, Senior Manager, Economic and Financial Consulting, September 1998 to July 2002
- Arthur Andersen, Manager, Economic and Financial Consulting, September 1994 to August 1998
- Arthur Andersen, Consultant, Economic and Financial Consulting, September 1989 to August 1994