Transcript 2003 - Magyarorszag

Public Private Partnership
Government actions to promote PPP

PPP Department within the Ministry of Economy and Transport

Government Decree in May 2003 to set up an Interdepartmental Committee
– Ministry of Economy and Transport
– Ministry of Finance
– Ministry of Justice
– Prime Minister’s Office
– Central Statistical Office
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Public Private Partnership
Road infrastructure development program

Long-term goal: 2500 km length of expressway network by 2015

Act CXXVIII on the development of the Hungarian expressway

network (accepted by the Parliament in December 2003)

Deficit constraints => need for alternative ways of financing
− PPP projects
− EU funds
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Public Private Partnership
PPP motorways: M5

Approximately 170 km section between Budapest and the Hungarian - Serbian
border

Original concession agreement signed in 1994 with French consortium AKA

First phase (110 km) handed over in 1999

New agreement reached in March 2004

Further 60 km section is expected to be built
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Public Private Partnership
Amended structure of the M5

Second phase to be built by AKA (estimated cost: EUR 836 million at December
2004 value)
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The motorway became part of the national vignette system

DBFO (design-build-finance-operate) structure with risk sharing - construction
and availability risks borne by AKA

Availability payment mechanism

Deductions in payments in case of poor performance and safety indices
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Public Private Partnership
PPP motorways: M6

Part of the V/c Helsinki corridor

Approx. 252 km section between Budapest and the Hungarian - Croatian border
to be built in 2 phases:
– first phase between Budapest and Dunaújváros (54 km) by 2006
– second phase between Dunaújváros and the Croatian border (198 km) by
2007
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Public Private Partnership
PPP motorways: first phase of the M6

Concession tender won by Bilfinger Berger BOT GmbH, Porr Infrastruktur
GmbH, Swietelsky International Baugesellschaft mbH

Concession period: 22 years

Timing:
− Concession Agreement signed on 2 October 2004
− Target interim completion date: March 2006

DBFO structure

EIB and EBRD considers providing financing to the concessionaire
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Public Private Partnership
PPP motorways: financial structure of the M6

Payment mechanism:
− national vignette system
− availability payment to the concessionaire

Risk sharing:
– International practice
– State: discriminatory change in law, delivery of the Site, dangerous
materials, etc.;
– Concessionaire: design, construction, financing, availability, except relief
events;
– Shared (vis major)
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Public Private Partnership
PPP student hostels

Projects of the Ministry of Education

Goal: development of university infrastructure
– Government decision on creating 10 000 accommodations in student
hostels in the framework of PPP

The pilot project of the University of Debrecen
− Classical DBFO structure
− Decision of PPP Committee on supporting the project on 30th September
2003
− Approval of the Economic Cabinet and the Government
− Public procurement procedure completed, construction is under way

11 further similar PPP schemes for other universities
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Public Private Partnership
Prison project of the Ministry of Justice

Goal: the development of prison service infrastructure - two new PPP prisons
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DBFO construction
– During a period of 15-20 years, 700 prisoner places / prison
– „Operate” element: only those tasks are performed by the state which can
not be carried out by the private sector (custodial services, on site medical
facilities and registering of prisoners)
– Positive decision of the PPP Committee:
10th October 2003

Tender announcement is expected at the beginning of 2005
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