Public and Public-Private Partnership (PPP) Funding of ......Funding of Transport Infrastructure –...
Transcript of Public and Public-Private Partnership (PPP) Funding of ......Funding of Transport Infrastructure –...
Public and Public-Private Partnership (PPP) Funding of Transport Infrastructure – Best
practices and common challenges
25 February 2013
Long experience in public funding – the experience of the
Russian Federation
Mr. Dmitry TVARDOVSKIY, Adviser to the Minister,
Ministry of Transport of the Russian Federation
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АВТОМОБИЛЬНЫЕ ДОРОГИ:
Федеральные
Зимники
Основные региональные
Участки автомобильных дорог с уровнем загрузки более 0.7,
имеющие протяженность более 5 км
Характерные участки автомобильных дорог с уровнем
загрузки более 0.7 протяженностью 5 км и менее с локальными
включениями участков между ними, имеющих уровень загрузки менее 0.7
Участки автомобильных дорог с уровнем загрузки менее 0.7,
имеющие протяженность более 5 км
R U S S I A N F E D E R A T I O N
НОРВЕГИЯ
ШВЕЦИЯ
ФИНЛЯНДИЯ
ЭСТОНИЯ
ЛАТВИЯ
ЛИТВА
ПОЛЬША
БЕЛАРУСЬ
УКРАИНА
АЗЕРБАЙДЖАН
УЗБЕКИСТАН
КАЗАХСТАН
ГРУЗИЯ
ИРАН
АРМЕНИЯ
МОНГОЛИЯ
КИТАЙ
SYSTEM OF HIGHWAYS
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INVESTMENTS IN TRANSPORT
0,95 1,03 1,10 1,12 1,16 1,20 1,19 1,22
0,00
0,20
0,40
0,60
0,80
1,00
1,20
1,40
2005 2004 2003 2006 2007 2008 2009 2010
BUDGET CAPITAL INVESTMENTS
EU , % GDP
2,0%
2,9%
3,0%
6,1%
Россия
ЕС
США
Китай China
USA
EU
Russia
Investments in transport, % GDP
2,10 1,96
2,09 1,97 2,16 2,22 2,19 2,24 2,38 2,42 2,49
0,00
0,50
1,00
1,50
2,00
2,50
3,00
2010 г. 2011 г. 2012 г. 2013 г. 2014 г. 2015 г. 2016 г. 2017 г. 2018 г. 2019 г. 2020 г.
Investments in transport complex , % от GDP
0,63
0,72 0,80 0,80 0,79 0,78 0,78 0,78
0,47 0,44
0,40 0,44
0,47 0,52
0,57 0,63
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
0,80
0,90
2013 г. 2014 г. 2015 г. 2016 г. 2017 г. 2018 г. 2019 г. 2020 г.
BUDGET CAPITAL INVESTMENTS RUSSIA, % GDP
Инновационный вариант (Inn) долгосрочного прогноза
ГП "Развитие транспортной системы"
SCENARIO 1
SCENARIO 2
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INVESTMENT DEFICIT FOR TRANSPORT INFRASTRUCTURE
PROPORTION OF TRANSPORT EXPENSES, % GDP
Источник: Mintrans, Boston Consulting Group
Losses of economy because of infrastructure underdevelopment Limited participation of private investors participation in infrastructure projects because of low level of
return Big number of private investors, including foreign equity funds to infrastructure projects with the support of
state budget
* Including oil and gas infrastructure Источник: OECD, HIS Global Insight, McKinsey
Infrastructure expenditures, % GDP
Russia
Eastern Europe , Eurasia
East, Africa
Other industrial countries
India
Japan
China
Investment
deficit comparing
to countries with
DEVELOPING
infrastructure Investment
deficit comparing
to countries with
DEVELOPED
infrastructure
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FINANCING OF FEDERAL TRANSPORT PROGRAM 2013 – 2020
Total volume of financing the Program 2013-2020 y. is
394,7 bln. $:
Federal budget: 243 bln. $
Regional budgets: 1,7 bln. $
Private: 150 bln. $
Federal 61,7%
Regional 0,4%
Private 37,8%
Total amount of investments 394,7 млрд. $
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INVESTMENT PROGRAM IS BASED ON PPP PRIORITY
PRINCIPLES
FEDERAL PROGRAMS
Projects with federal budget
finance
Implementing new technologies,
financial instruments and
management resources of the
private sector using PPP
mechanism
Planning the development of the
infrastructure according to the
principles of balance and
coordination
Concession law
Investment
agreements
Three year planning
Budget
Inv
es
tme
nts
in tra
ns
po
rt
infra
stru
ctu
re
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PPP UNITS ARE IN ALL TRANSPORT INDUSTRIES
MINTRANS
ROAD AGENCY RAILWAY AGENCY
MARITIME AGENCY
AVIATION AGENCY
AIRPORT ENTERPRIZE
ROSMORPORT ENTERPRIZE
JSC RZD SC RUSSIAN HIGHWAYS
STRUCTURE
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INSTRUMENTS
ADDITIONAL TAXES AND TOLLS FOR USERS
BONDS AND LOANS WITH FEDERAL GUARANTIES
CONCESSIONS
STATE FUNDS (INVESTMENT FUND, ROAD FUND, RDIF)
CURRENT INSTRUMENTS FOR PRIVATE FINANCE IN TRANSPORT INFRASTRUCTURE ARE ALREADY ON
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PROJECT FINANCING ISSUING INFRASTRUCTURE BONDS AS AN ADDITIONAL SOURCE OF FINANCING IN THE SITUATION OF STRONG DEFICIT
Rising financial leverage Attracting financial and strategic
partners Technical and financial project
control Project results partly influencing
financial stability of mother company
Advantages of project financing
Payback period should be appropriate for investors and lenders
Guarantee of cashflows No consolidation at mother
company balance o IFRS 10: no control and <50%
share in SPV
Major terms
Equity financing
P r o j e c t s 1, 2, 3, 4 Corporate financing Multiplicative effect
equity
strategic investor Investment funds
debt financing
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Concession gives the opportunity to invest private funds in state owned
infrastructure
MECHANIZMS OF DEVELOPING STATE OWNED TRANSPORT INFRASTRUCTURE
Privatization
Selling the stake to a
private owner
Concession
Procurement with
innovative specifics
Standard
procurement
MARKET RULES,
private
investments
STATE CONTROL,
budget investments
PPP Models Applied
Concession contacts
Direct toll concession
Availability payments concession
Long-term agreements
O&M contracts Investment
agreements at pre-project stage
Su
bje
ct
- Construction (reconstruction) - CAPEX investments - Maintenance & operation, toll collection arrangement - Optional: project design, site preparation
- Automated traffic mgt system (ATMS) set up
- Maintenance and operation
- Toll set up collection system
- Feasibility study - Project design
Term
s
Depending on asset lifecycle: 20-30 years 10-15 years Up to 4 years
Re
turn
on
in
ve
stm
en
ts
Toll
Concession fees: - Availability payments - Investment payments (return on investments, performance payment)
Compensation by the Concessionaire
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TENDER TYPES
Contract
Regular procurement (supply contract,
contractual agreement, service agreement)
Investment related
Investment agreement
Concession agreement
Legal basis
procurement activity policy
Federal Law №223-FZ
Avtodor internal tender regulation
Federal Law #223-FZ
Russian Government regulation issued for the
project
Federal Law #115-FZ
Tender type Auction
Big request 1-stage tender
1 stage tender
2 stages tender
2 stages tender
Tender terms 30-40 days 2-6-12 months 6-12 months
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POSSIBLE WAYS OF RISING INVESTMENT ATTRACTIVENESS OF TRANSPORT INFRASTRUCTURE PROJECTS
• Investment component in tariff and principle «user pays» • Stimulating investments of potential users
o Complex projects where transport infrastructure is additional to the project with high level of revenue (any type of production or other)
• Stimulating investments of construction companies as co-investors • Minimizing expenditures along the whole contract period by means
of: o Outsourcing expertise and technologies o Project control
• State support of the project o Budget grants as co-financing project cost o Budget guaranties for SPV bonds issuing o Guarantee of minimal revenue
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TRANSPORT PPP PROJECTS IN RUSSIA
Total number of PPP projects in Russia is about 270
The biggest number of projects in housing and communal services, the biggest volume of investments is in transport infrastructure
Investment fund of the Russian Federation is financing 47 projects with the total volume of investments 33 bln.$ from all sources: o Investment fund 7,4 bln.$ o Regional budgets 0,39 bln.$ o Municipal 0,05 bln.$ o Investors/concessioners 17,2 bln.$
For developing road infrastructure and stimulating private investors in toll roads was created state company Russian Highways. During next 17 years Avtodor is planning to get >12 bln.$ of private investments
Main tendencies PPP projects in Russia Housing and
communal services
Transport
Production
Territory development
Energy
Education
Healthcare
Real estate
Tourism
Sport
PPP projects in transport
PPP projects in transport PPP projects in transport complex
highways
airports
bridges
railways
ports
PROSPECTIVE HIGHWAYS
№ Highway Terms Length
1 М-1 Belarus Federal Highway 2013-2025 457 km
2 М-3 Ukraine Federal Highway 2013-2022 517 km
3 М-4 Don Federal Highway 2012-2019 1,522 km
4 Moscow – Saint-Petersburg Highway 2012-2018 669 km
5 Central Ring Road (Moscow region) 2015-2025 521 km
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ROAD INVESTMENT PROJECTS PIPELINE
№ Project
Length, toll sections (km)
PPP Model Tender terms
Construction terms
Investments in total, EUR bln. *
Private capital share
1 М-1 Belarus km 33 – km 456
347,4 Availability payments concession
2013 1 phase: 2015-2018 2 phase: 2019-2025
4.94 35%
2 М-4 Don km 21 – km 225
150.5 O&M contract 2013-2014 2014-2015 0.19 45%
3 М-4 Don km 633 – km 715
84 Availability payments concession
2014-2015 2015-2017 0.83 25%
4 М-4 Don km 1,091 – km 1,319
207.4 O&M contract 2013-2014 2014-2016 0.35 50%
5 Moscow – Saint-Petersburg km 58 – km 149
90.1 Direct toll concession 2013-2014 2015-2017 1.63 40%
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Moscow – Saint-Petersburg km 543 – km 684
141 Availability payments concession
2013-2014 2014-2017 2.96 25%
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New M-7 Volga exit from Moscow Ring Road (MKAD) (Balashikha and Noginsk bypass)
69 Direct toll concession To be adjusted 1.21 50%
8 Central Ring Road (section 3)
104.5 Availability payments concession
To be adjusted 1.83 35%
9 Central Ring Road (section 4)
96.5 Availability payments concession
2015-2017 2017-2020 1.73 35%
10 Central Ring Road (section 1)
74.5 Availability payments concession
2015-2017 2017-2020 1.88 35%
*2012, incl. VAT, ex rate EUR / RUB = 40.79 16
MINISTRY OF TRANSPORT MOSCOW, RUSSIA [email protected] +7 495 626 9721
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