PPPStructureExamples

PPPStructureExamples - Public-Private Partnerships: Lessons...

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Public-Private Partnerships: Lessons from the Roads Sector Henry Kerali The World Bank
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Overview Typical Concession Structures Private Finance Structures Financing mechanisms PPP Project Cycle Examples from Europe Performance Based Maintenance Contracts Discussions
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Alternative PPP Approaches
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A Typical Concession Structure Government The Principal The Concession Agreement The Promoter The Concessionaire Special Project Vehicle The Shareholders Equity Finance The Lenders Debt Finance Design Contracts Construction Contracts Operations Contracts Maintenance Contracts
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Toll Financing Financing mechanism private investors are rewarded through toll revenues tolls collected directly from road users Build Own Operate Transfer BOOT/BOT the scheme reverts to public ownership, at some future date Build Own Operate BOO the scheme remains in private ownership
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Shadow Tolls, Lane Rental & Availability Payments Design Build Finance Operate (DBFO) investors rewarded through a shadow toll investors take, or share, the traffic risk Design Build Operate Maintain (DBOM) investors rewarded through a rental scheme Limited or no traffic risk Availability Payments Investors paid according to availability of facility Penalties for closures & disruptions to traffic
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Who Provides the Funds? Private Finance Schemes can be: exclusively privately financed, or private - public partnerships Public funds should: only be for a well defined purpose represent social benefits which cannot be captured through toll revenues Private funds: equity shareholders funds debt from the financial markets usually a combination, typically 70% to 90% debt 30% to 10% equity
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PPP Project Cycle PPP project require careful design, effective support structures and a good understanding between partners
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Examples from Europe
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Portugal Initiation of DBFO for the road sector in 1997 Real tolls on existing roads/bridges Shadow tolls paid by government during road construction, changed to real tolls paid by user after completion Comprehensive regulatory and institutional approach Standardized procedures and competitive bidding; appraisal through Public Sector Comparator; PPP unit in MOF Lessons learned Rapid infrastructure development (14 concessions/6 yrs) Transparent procurement attracted large scale private investment Significant budgetary impact of shadow tolls
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Portugal Vasco da Gama Bridge Vasco da Gama Bridge Concession structure (1993) Type of concession DBFO concession for second bridge across Tagus rives Length: 18 km including access roads (12 km bridge only) Concession included operation of existing Tagus toll bridge Concession period Maximum of 33 years Structure Shadow toll scheme for new bridge Real tolls on existing bridge Concessionaire 24.8% English company (Trafalgar Square)
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This note was uploaded on 09/16/2011 for the course F 112 taught by Professor Ans during the Spring '11 term at IIM Bangalore.

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PPPStructureExamples - Public-Private Partnerships: Lessons...

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