Transcript PPP & Concession`s Project

Public-Private Partnership (PPP)
Alstom Transport’s experience
Philippe Pegorier, Martin Vaujour
03/06/2011
Agenda
ALSTOM GROUP
ALSTOM TRANSPORT
TURNKEY SYSTEMS
PPP – AT’s EXPERIENCE
CONCLUSION
Alstom
Three main activities
96 000 employees in 70 countries
Power sector
Equipment & services for power generation
Grid sector
Equipment & services for power transmission
Transport sector
Equipment & services
for rail transport
Three main activities
Grid
3.5 €bn
Transport
19%
30%
5.8 €bn
(2009)
Power
13.9 €bn
51%
Total sales 2009/10 :
€23 bn*
* Proforma figures
Alstom Transport
A worldwide presence
26 000 employees in more than 60 countries
North Europe
5 800
22,1%
France
8800
33,6%
CEI
20
0,1%
North America
1 100
4,2%
South Europe
6700
25,5%
Asia Pacific
1 300
5%
Latin America
2 500
9,5%
Alstom Transport, the only railway multi-specialist
 The only manufacturer in the world to master all businesses of
rail sector
 The most complete range of systems, equipements and services:
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•
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•
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Rolling stock
Infrastructures
Signalling
Services
Turnkey systems
 N°1 in high and very high speed
 N°2 in urban transport (tramways, metros)
 N°2 in signaling
 N°2 in maintenance
A wide range of products and services
Rolling stock : from trams to very high speed…
Locomotives
DISTANCE
Tram-Train
Suburban
Very high speed
Regional
Metro
High speed
SPEED
Tram
A wide range of products and services
Infrastructure, signalling, services and maintenance
SIGNALLING
Atlas
Revolution in interoperable drive systems
Urbalis
Optimal and efficient monitoring
of complex urban transport systems
SERVICES AND MAINTENANCE
Full Maintenance Management
Spare parts management
Renovation
Traintracer
INFRASTRUCTURE
Track laying
Electrification
Electric power supply
Electromechanical equipment
Turnkey systems
Optimised turnkey engineering phase
Alstom has a large system engineering team which guarantees
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Co-ordinated turnkey design team integrating each subsystem
Selection of products and solutions to optimize the Life Cycle Costs
Sophisticated RAMS (Reliability Availability Maintainability Safety) simulation team and tools
Planning optimisation reducing construction time
Our large experience allows costs optimisation
• Better logistics management
• Mutualisation of resources
• Optimization of site organisation
Public-Private Partnership
AT’s experience in railway projects
PPP & Concession : General Definition
 A PPP & Concession’s Project is a project which includes through a single contract :
− the construction of all or part of a railway transport system
− the financing of all or part of the construction by the private sector
− the operation and/or maintenance of the railway transport system
− the revenue, taking into account (part of) the traffic risk and/or performance risk (availability, reliability , …)
PPP & Concession: Alstom Definition
 A PPP or Concession’s Project (BOT, BOO, DBFOM, DBFM…) is a project where Alstom :
− has its usual role of contractor / supplier / maintainer
+
− acts as shareholder of a Special Purpose Company (SPC)
+
− mobilizes private fundings (equity, limited recourse financing) to implement the Project and secure its scope of
works
PPP typical structure & benefits
PPP contractual scheme :
Main benefits for the customer :
Conceding Authority
Users
Risk transfer
Capital
subsidy
PPP
contract
Operating
subsidies
Budget control
Loan contract
Lenders
Debt service
Engineering,
Procurement and
Construction (EPC)
contract (turnkey)
Consortium
Construction
Special Purpose
Company
Shareholders
On-time delivery
O&M contract
Substitute Capex by Opex
Consortium
(Exploitation) & Maintenance
Example: Three possible schemes for a High Speed PPP project:
Investment scope
Operational scope
Maintenance
Operation
Construction
Rolling Stock
Electro-mecanic
Civil works
Benefits
Drawbacks
Examples
No interface to deal with
1/ Global project setting up
X
X
X
X
X
X
Private sector totally responsible
Financial flow too important for high speed
projects
TAV Brazil
Well-adapted to tramway projects
Facilitating multiple operation
2/ PPP for infrastructure
only
X
X
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X
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X
Private sector totally responsible of the line
Lead to hold a precise preliminary referential
for operation by third operators
Possible segmentation into portions
Not much adapted to tramway or metro
RFF France
California
Spain
Multiple operation facilitated
3/ PPP for superstructure
only (or for selected
portions)
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X
-
X
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X
Direct control on civil works by the customer
Reducing risk transfer (interfaces)
Private sector committment to the system
Not much adapated to tramway or metro
Possible segmentation into portions or trades
HSL Zuid Nthlds
Why is Alstom involved in a PPP ?
Unique expertise as a railway system integrator:
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Life cycle cost: long-term performance maintening from the conception phase to the operational phase
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Industrial Alstom share in a PPP, up to:
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20% for high speed,
30% for metros,
80% for tramways
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Being minority shareholder in the SPC, Alstom fulfils its global committment towards the Customer and the
shareholders
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Mid-term & long-term balance between customers’ and Alstom’s interests
What each one gets
brings
PPP projects:
Public
sector
Turnkey solution
Grounds
Design &
Design & construction
construction
Contract
Risk sharing
Laws context
On-time delivery
commitment
Subsidies
Operation
Operation&&
Maintenance
maintenance
Contract
Rights
PPP
project
Better
budget control
Dividends
Capital
Service Quality
Farebox Income
Financing
Financing
Banks
Contracts
Passengers
Private
sector
RISK SHARING MATRIX
Alstom views – Subject to negotiation
Conceding
Land acquisition
Design & Construction
Modification of standards and norms
Operation and maintenance
Exchange rate
Ticket price
Inflation
Change orders
Level of service
Traffic
Interest rate
Technology
New competition modes
Political risks
Concessionaire
PPP: Major Success Factors
 Sustained political support to the project
 Adequacy of legal concession frame with international standards
 Realistic assessment of the investment cost and/or of the revenues of the passenger traffic at the ‘feasibility’ stage
 Past experience of the country for such projects
 The conceding authority must have the financial capacity to support the project
 Well-balanced risk sharing between the conceding authority and the concessionaire
 Strong committed , experienced, international and local partners for construction, operation, and financing
 Limited number of partners at Concession and EPC levels
Alstom’s References

Arlanda Airport Link - Sweden 1994
45-year concession; 40 km line/7 EMU trains
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Barcelona LRT Ph 1- Spain 2000
28-year concession; 16km/19 Citadis LRV’s
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Barcelona LRT Ph 2 - Spain 2003
25-year concession; 14km/18 Citadis LRV’s
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Jerusalem LRT Line 1- Israel 2004
30-year concession; 14km/46 Citadis LRV’s
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Florence LRT Lines 2&3 – Italy 2005
25-year concession; infrastructure

Milan metro Line 5 – Italy 2006
32-year concession; infrastructure
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Milan metro Line 5 extension – Italy 2010
32-year concession; infrastructure
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Reims LRT Line 1 – France 2006
30-year concession; 11km/18 Citadis LRV’s
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Nottingham Tramway Phase 2 - UK 2011
23 years concession, turnkey/22 Citadis LRVs
Barcelona
Conclusion
General Key Messages
 The State have to create upstream adequate political and legal frame
 A too complex environment does not attract investors
 A direct investment from public authority is a must
 Allow use of Export Credit from Supplier to leverage additional support
 Part of the payment (including revenues) to be considered in strong currency (or to provide Forex guarantees)
 The risk matrix should be discuss locally and take into consideration the local environment as well
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