Transcript HIGHWAY CONCESSIONS AND WORLD BANK GUARANTEES

InterBaltic Final Conference:
“A Future Transport Policy for the
Baltic Sea Region”
Public Private Partnerships as an
Option to Speed Up Investments
in Intermodal Infrastructure
and Services
César Queiroz, Ph.D.
Transport Infrastructure Consultant
World Bank
Klaipeda, Lithuania
19-21 November 2007
Presentation Outline
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The World Bank Lending for Transport
World Maritime Traffic
World Port Container Traffic
Major Container Routes
World Top-10 Container Ports
Global World Port Capacity
Performance Based Contracts (PBC)
From PBC to Concession
World Bank Port Reform Toolkit
Logistics Performance Index (LPI)
Concluding Remarks
References
World Bank Lending for Transport
Lending (US$million)
4000
3500
3000
Aviation
2500
General Transport
2000
Ports and Waterborne
Transport
1500
Railways
1000
Roads and Highways
500
0
FY04
FY05
FY06
Year
FY07
FY08*
World Bank-Financed Klaipeda Port
Project Includes
• Rehabilitation and extension of
breakwaters
• Dredging of the channel entrance
• Training of port pilots
• Improved navigation systems, wave
current monitoring, wreck removal
• Construction of a confined disposal
facility for storage/treatment of
contaminated dredging masses
Klaipeda Port: Reconstruction and
Extension of Breakwaters
Klaipeda Port: Reconstruction and
Extension of Breakwaters
Dredging of Channel Entrance
Wreck Removal from Channel Entrance
Development of World Maritime Transport
Total transport (billion tons)
8
7
6
5
4
Other cargo
3
Dry bulk
2
Crude and
products
1
0
1990 1992 1994 1996 1998 2000 2002 2004
Year
Source: UNCTAD Review of Maritime Transport 2006
World Port Container Traffic
Million TEU
600
500
400
300
200
100
0
1973
1977
1981
1985
1989
1993
1997
2001
2005
Year
Source: Containerisation International
2009*
Major Container Routes (mio TEU) 2005
9.3
3.5
4.9
Transatlantic
12.9
2.4
5.1
Trans - Pac
Trans - Pac
Source: Drewry
Total East/West
50.3
Total North/South
20.3
Total Inter-Regional
45.3
World Total
115.9
World Top 10 Container Ports
Throughput (million TEU)
30
24.8
25
23.2
2003
2004
2005
2006
21.7
18.5
20
15
12
9.8
10
9.6
8.9
8.9
5
ng
el
es
ub
ai
Lo
s
A
D
bu
rg
am
H
ao
hs
iu
ng
R
ot
te
rd
am
K
us
an
B
Sh
an
gh
ai
Sh
en
zh
en
Si
ng
ap
or
e
H
on
g
K
on
g
0
Source: Yearbook Containerisation International
8.5
Relative Growth: Top 10 World
Container Ports
Relative Growth (2003 = 100)
2003
2004
2005
2006
200
180
160
140
120
100
80
60
40
ng
e
le
s
i
ub
a
Lo
s
A
D
bu
rg
am
H
rd
am
ot
te
R
K
ao
h
si
un
g
n
us
a
B
Si
ng
ap
or
H
e
on
g
K
on
g
Sh
an
gh
ai
Sh
en
zh
en
20
0
Source: Yearbook Containerisation International
Global Container Port Capacity
• Container port capacity is reaching critical
levels
• Development of new port capacity in
countries like China is fast, but in other
regions (like USA and Europe) much
slower, due to many procedures (e.g.,
public inquiry, EIA, inefficient hinterland
connections)
• Example: Le Havre and Yangshang
Offshore Terminal in Shanghai
Le Havre and Yangshang
• 2000 project in Le Havre: First Phase of
4 berths took 3 years
• Yangshang Offshore Terminal in
Shanghai: Phases 1 and 2 (9 berths)
and 32.5 km long bridge took 5 years
PPPs are not new!
• Toll road at Wadesmill in Hertfordshire, UK,
established in 1663 by Act of Parliament
• 19th century concessions: toll roads,
bridges, tunnels in US; railways in France;
subway in London
• Suez (1860) and Panama (1880) canals
• Decline around 1930 (great depression)
• Resurgence in the 1980s: collapse of the
state-owned monopoly paradigm
Public-Private Partnership
(PPP)
A sustained collaborative effort
between the public sector
(government agencies) and private
enterprises to achieve a common
objective (e.g., a container terminal
project) while they pursue their own
interests
Performance Based Contracts for
Dredging – a Form of PPP
• Also known as draught guarantee contracts
• The contractor bears sedimentation risks
over longer periods and is paid for services
with monthly fixed amounts (or alternative
financing such as toll – then a concession)
• Most ports and waterways have carried out
maintenance dredging by two types of
contract: Dredging paid by volume, or
Charter contracts
• Before: directly by the government
Where to Apply Performance Based
Contracts for Dredging?
• Where a stable level of policy is to be
expected
• Where sedimentation can be evaluated
within reasonable assumptions of risk
• Where other risks are covered with
reasonable contractual limits (for
example, extreme weather conditions)
• Sufficient volume to allow competitive
bidding
Example of Performance Based
Contract (PBC) for Dredging
• BAHIA BLANCA , Argentina
• A 5-year PBC for maintenance dredging
• Phase 1: Capital dredging; Opening Volume
preset at 1 million m3; when real opening
volume is measured the contract value was
adjusted accordingly
• Phase 2: Maintenance dredging during
remained of 5-year period
• The bid price was comprised of 60 equal
monthly payments, plus the initial dredging
From Performance Based Contract
to Concession – A Typical Case
• PBC: The contractor bears
sedimentation risks over longer periods
and is paid for services with monthly
fixed amounts
• Concession: In addition to
sedimentation risks, the contractor also
bears demand risks, as payments are
made by the users (e.g., toll)
Example of Concession for Dredging
• Hidrovia Waterway Concession, Argentina
• Concession contract for 18 years: 1995 –
2013
• Rio Parana and Rio de la Plata from Santa
Fe to the Atlantic Ocean
• Mainly for oceangoing traffic, but also
river barges use the waterway
• 800 km of main waterway for Argentine
exports (> 80% of export)
Hidrovia Waterway Concession
• Risk of sedimentation and traffic born by
the concessionaire
• The works include: Capital dredging and
installation of buoys in 1995-1996;
Deepening works from 9.8 m 10.4 m
navigation channel; 800 km maintenance
dredging – about 22 million m3/year;
Maintenance of the buoys and beacons;
Toll system
• Contract clause includes guaranteed
depths and safety all year round, 24 hours
per day
Hidrovia Waterway Concession
• Contractor has to provide sufficient equipment
• Three hopper dredges of 3400 to 6000 m3 holds
are constantly working
• Additional hopper dredges assist during
sedimentation seasons
• Additionally a large Cutter Suction Dredge
maintains a sedimentation trap in the Rio de la
Plata estuary on a 2 yearly basis
• Contractor places and maintains buoys
• Survey: 5 survey vessels for constant mapping
of draft situation
Hidrovia Waterway Concession
• Tolls: paid by all commercial vessels per
tonnage (NRT) and used stretch
• Toll level is revised on regular basis with
state to find equilibrium between costs
and income
• End costs for typical users: about 1
USD/ton of grain exported; 16 USD/TEU
• Concessionaire: Jan De Nul Group (DJN)
World Bank and Port Reform
• World Bank is and has been catalyst
in reforming the Port Sector in
Emerging Economies
• Service Port to Landlord Governance
model has found wide application
• The Landlord Model has resulted in a
clear separation between public and
private responsibilities and returns,
embedded in a concession contract:
investments, tasks, revenues, and
risks
World Bank Port Reform Toolkit
• A decision support tool to undertaking
reforms of public institutions that provide,
direct, and regulate port services in
developing countries
• Helps to choose options for private sector
participation
• Assists in the analysis of the relationships
between public and private parties
• Suggests legislation, contracts, and
institutional charters to govern private sector
participation
Toolkit’s Main Modules
• A Framework for Port Reform
• The Evolution of Ports in a Competitive
World
• Alternative Port Management Structures and
Ownership Models
• Legal Tools for Port Reform
• Financial Implications of Port Reform
• Port Regulation: Overseeing the Economic
Public Interest in Ports
• Labor Reform and Related Social Issues
• Implementing Port Reform
Toolkit Availability
• Second Edition: Available since 2007
• Free of charge
• http://web.worldbank.org/WBSITE/EXTE
RNAL/TOPICS/EXTTRANSPORT/EXTPR
AL/0,,contentMDK:20517158~menuPK:1
221870~pagePK:148956~piPK:216618~t
heSitePK:338594,00.html
• Also available as a CD ROM
The Landlord Model
State
Subsidy
Lease
Dues
Port
Authority
Fixed
Assets
Loans
OPEX
Port Management
Models
Type
InfraSuperStevedoring Other
functions
structure structure labor
Public Service
Port
Public
Public
Public
Mainly
public
Tool Port
Public
Public
Private
Mainly
public
Landlord Port
Public
Private
Private
Mainly
private
Private
Service Port
Private
Private
Private
Mainly
private
Public-Private Roles in Port
Management
Public
Private
Port Adm Infra Equi Build Carg Moor Dred
pm’t ing Hand ing ging
Pub
Serv
Tool
Land
Lord
Priv
Serv
A Good Example of Landlord
Port -- Klaipeda
Logistics Performance Index
• Scale of 1 to 5 – lowest to highest performance
• Joint effort: World Bank, Turku School of
Economics, Global Facilitation Partnership for
Transportation and Trade (GFP), International
Federation of Freight Forwarders Associations
(FIATA), Global Express Association (GEA)
• Available, since November 2007, for 150
countries on the World Bank website
• http://web.worldbank.org/WBSITE/EXTERNAL/
TOPICS/EXTTRANSPORT/EXTTLF/0,,contentM
DK:21514122~menuPK:515440~pagePK:14895
6~piPK:216618~theSitePK:515434,00.html
LPI assesses the performance of
countries in seven areas of the
logistics environment
• Infrastructure
• Customs and border crossing
• Logistics competence
• Domestic costs
• Timeliness
• Tracking and Tracing
• Ease of arranging international shipments
LPI in Selected Countries
5
4.19
3.82
4
3.32
3.02
3
2.95
2.78
2.55
2.37
2.11
2
1.21
1
Sin
Fin
Chi
Lat
Est
Lit
Ukr
Rus
Taj
Afg
LPI in Selected Countries
Country
LPI
Custo
ms
Infra
Ease
of Int
Ship.
Logist.
Comp.
Track
Trace
Dom.
Logist.
Costs
Time
liness
Fin
3.8
3.7
3.8
3.3
3.8
4.2
2.2
4.2
Chi
3.3
3.0
3.2
3.3
3.4
3.4
3.0
3.7
Lat
3.0
2.5
2.6
3.3
2.9
3.1
2.9
3.7
Est
2.9
2.8
2.9
2.8
3.0
2.8
3.3
3.3
Lit
2.8
2.6
2.3
3.0
2.7
2.6
3.0
3.4
Ukr
2.5
2.2
2.3
2.5
2.4
2.5
3.2
3.3
Rus
2.4
1.9
2.2
2.5
2.5
2.2
2.4
2.9
Some Concluding Considerations
• Since 2006 there has been increasing interest of
investment banks and other financial
institutions to invest (in particular) in the
container terminal business
• A few examples
– Investment Bank Goldman Sachs purchased a 49% stake
in operator SSA Marine
– Insurance conglomerate American International Group
(AIG) bought the US terminals of Dubai Ports World
– A unit of Deutsche Bank bought Maher Terminals (New
York and New Jersey)
• The long-term Rate of Return is high, secure
and stable
• Will this trend continue?
Private Sector Risk
High
Private
Service
Port
Landlord
Port
Tool
Port
Public
Service
Port
Low
Low
Importance of Regulation
High
High
Allocation of Risks
Public Service Port
Landlord Port
PBC
RISK
TO
PUBLIC
SECTOR
Concessions
Decreasing
Public Risks,
Increasing
Private Risks
Low
RISK TO PRIVATE SECTOR
High
Thank you!
WB PPP-related Sites
• World Bank Port Reform Toolkit
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/E
XTTRANSPORT/EXTPRAL/0,,contentMDK:20517158~me
nuPK:1221870~pagePK:148956~piPK:216618~theSitePK:
338594,00.html
• How to Hire Expert Advice on PPP
http://rru.worldbank.org/Toolkits/Documents/Advisors/Full_Toolkit.pdf
• Labor Issues in Infrastructure Reform
www.ppiaf.org/Reports/LaborToolkit/toolkit.html
• World Bank (2006). “Resource Guide for Performancebased Contracting.” Washington, D.C.
http://www.worldbank.org/transport/roads/resourceguide/index.html
The Doing Business Project
• provides objective measures of business
regulations and their enforcement
• ranks economies on their ease of doing
business, from 1 (Singapore) to 178 (D. R.
Congo)
• includes 10 dimensions: Starting a Business,
Dealing with Licenses, Employing Workers,
Registering Property, Getting Credit,
Protecting Investors, Paying Taxes, Trading
Across Borders, Enforcing Contracts, Closing a
Business
• http://www.doingbusiness.org/economyrankings
/?direction=Asc&sort=1
Lithuania, Pop 3,396,862
GNI US$7,870/capita
• ranks (26) above the regional and income group
averages in six dimensions
• three most problematic factors for doing
business: tax rates, inefficient government
bureaucracy, and tax regulations
• among the top five countries in the Registering
Property indicator, but it ranks in the bottom
10% of countries in non-wage labor cost and
rigidity of hours index
• labor regulations are listed among the top 10
obstacles to firm investment
• http://rru.worldbank.org/besnapshots
Estonia, Pop 1,341,042
GNI US$11,410 /capita
• ranks (17) above the income group and regional
averages
• three most problematic factors for doing
business: an inadequately educated workforce,
inefficient government bureaucracy, and poor
work ethic in national workforce
• among the bottom 25 countries in the
Employing Workers indicator
• labor regulations are ranked as the most
significant obstacles to firm investment
• annual GDI growth has been above 10% for the
last two years
• http://rru.worldbank.org/besnapshots
Latvia, Pop 2,286,633
GNI US$8,100/capita
• ranks (22) above the regional and income group
averages in six dimensions
• in the political risk rating, the primary declines
were in external conflict, internal conflict, and
government stability
• three most problematic factors for doing
business: inflation, tax rates, and corruption
• top constraints to firm investment: tax
administration, tax rates, and economic and
regulatory policy uncertainty
• annual GDP growth has been above 10% for the
last two years
• http://rru.worldbank.org/besnapshots
Major Port Functions
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Administration
Infrastructure
Superstructure: Equipment and Buildings
Cargo Handling
Mooring
Dredging
Regulatory function
Planning function
Nautical function
Port marketing and promotion function
Main Distinctions in Port
Management Models
• Ownership of infrastructure
• Ownership of superstructure
(in particular ship-shore
handling equipment)
• Employment of stevedoring
labor
Cesar Queiroz
Transport Infrastructure Consultant
World Bank, 1818 H Street NW
Washington DC 20433 USA
Tel +1 202-473 8053
Mob +1 301-755 7591
Email: [email protected]
http://www.worldbank.org/transport
Cesar Queiroz is an international consultant on transport
infrastructure, with main interest in public-private partnerships (PPP)
in infrastructure, performance-based contracts, road management
and development, port rehabilitation and reform, improving
governance, quality assurance and evaluation, research, teaching
and training. Between 1986 and 2006, he held several positions with
the World Bank in Washington, D.C., including principal highway
engineer, lead highway engineer, and highway advisor. Prior to
joining the World Bank, Cesar was the deputy director of the
Brazilian Road Research Institute in Rio de Janeiro. He holds a Ph.D.
in civil engineering from the University of Texas, USA, a M.Sc. in
Production Engineering from the Federal University of Rio de
Janeiro, and a B.Sc. in civil engineering from the Federal University
of Juiz de Fora, Brazil. Cesar was awarded the Maua Medal for his
contribution to transport development in Brazil, and is an elected
member of the Russian Academy of Transport. He has published
more than 130 papers and articles, including being a co-author of two
World Bank main publications on PPP and performance-based
contracts, respectively the “Toolkit for PPP in Highways” and the
“Resource Guide for Performance-based Contracting.” He has
participated actively in several international organizations and
conferences.