CHILEAN EXPERIENCE IN PUBLIC PRIVATE PARTNERSHIP

JOSÉ MIGUEL HIDALGO G Public Private Partnership (PPP) Consultant

josemiguelhidalgo@gmail.com August 2014

Agenda

1. How does the system started

2. Favorable context in chile

3. Awarded Projects

4. Concessions of Transport Projects

5. Success Factors

How doesthe system started

At the beginning of the 90s, Chile had an important deficit of infrastructure.

In 1995, the Chilean Construction Chamber estimated these needs in USD

11,080 million, according to the following graphics:

4.250

2.000

1.480

950

810

450

470

370

100

200

11.080

Roads and Highways

Urban Roads

Water Treatment

Potable Water

Community Team

Ports

Railroads

Irrigation

Airports

Rain water control

Total To tackle the lack of

infrastructure, it was

decided to use the

Public-Private

Partnership (PPP)

mechanism, through an

ambitious program of

public works

concessions.

In 1992, the El Melón Tunnel was put out to tender

Agenda

1. How does the system started

2. Favorable context in chile

3. Awarded Projects

4. Concessions of Transport Projects

5. Success Factors

Why Invest in Chile?

• The Chilean economy is renowned for its sustained growth trajectory.

• Between 2000 and 2009, the Gross Domestic Product (GDP) of the country grew to an annual average rate of 3.7%, based on IMF figures.

• According to figures published by the Central Chilean Bank, the nominal GDP reached US$210,000 million in 2010, more than double the figure of US$74,032 million recorded in the year 2000.

• The GDP in Chile was worth 277.20 billion US dollars in 2013.

Why Invest in Chile?

Chile, a trustworthy country

• Chile is a safe and reliable place in which to do business. This is borne out by risk ratings agencies which have maintained their high ratings for Chile, highlighting its low level of public debt, the health of its financial system and its solid institutions.

• In its Global Competitiveness Index 2012-2013, the World Economic Forum recognized Chile as one of the 15 countries, out of a total of 144, with the best Macroeconomic Environment.

• In 2012, Chile was the market that saw the fifth largest improvement in its risk rating.

Good Atmosphere for Businesses

Best Places to do Business 2010 – 2014 (*)

* Position within 82 evaluated economies

Source: Economist Intelligence Unit (www.eiu.com)

Transparent Country

• Chile is known for its transparency and this is reflected in international rankings that highlight the low level of corruption in the country and, particularly, its finances, due to government efforts to raise standards in administration of the state.

Agenda

1. How does the system start

2. Favorable context in chile

3. Awarded Projects

4. Concessions of Transport Projects

5. Success Factors

Awarded Projects

Evolution of the Model

•1991 •2002 •2006 •2010

• Route 5 South-Center

• Airport Program

• Cross-sectional Routes

• Penitentiary Program

• Public Buildings

• Urban Freeways

• Hospital Program

• Route5 North

• Re-licitations

• Standard Improvements

Countries participating in the industry

Awarded projects

82 Projects, total investment US$ 12 billion

Number of projects awarded and total investment per year until 2013

AIRPORT NETWORK

AIRPORT NETWORK

Aeropuerto de Chacalluta MMUS$ 10

Aeropuerto Cerro Moreno MMU S$ 12

Aeropuerto Diego Aracena ® ® MMU S$ 4,8

Aeropuerto Chamonate MMU S$ 30

Aeropuerto El Loa MMU S$ 235

AIRPORT NETWORK

Aeropuerto Arturo Merino Benítez MMU S$ 235

Aeropuerto La Florida MMU S$ 7

Aeropuerto Carriel Sur MMU S$ 50

Nuevo Aeropuerto Región de la Araucanía MMU S$ 280

AIRPORT NETWORK

Aeropuerto Carlos Ibáñez del Campo ® MMU S$ 13

Aeropuerto El Tepual ® ®

MMU S$ 4

PUBLIC INFRASTRUCTURE

Centro Justicia MMUS$ 120

Plaza Ciudadanía MMUS$ 16

Coliseo Parque O´Higgins MMUS$ 15

Centro Metropolitano de Vehículos

Retirados de Circulación

MMUS$ 18

Hospitales Maipú y La Florida

MMUS$ 248

Puerto Terrestre Los Andes MMUS$ 20

PENITENTIARY

INFRASTRUCTURE

Grupo Penitenciario

Antofagasta y Concepción. MMUS$ 15

Grupo Penitenciario III

Santiago I – Valdivia – Puerto Montt

MMUS$ 90

Grupo Penitenciario I

Iquique – La Serena -

Rancagua

MMUS$ 90

HOSPITAL

INFRASTRUCTURE

HOSPITAL INFRASTRUCTURE

Hospital El Salvador MMUS$ 308

Hospital Félix Bulnes MMUS$ 230

Hospital Antofagasta MMUS$ 253

Hospitales Maipú y La Florida MMUS$ 313

Agenda

1. How does the system started

2. Favorable context in chile

3. Awarded Projects

4. Concessions of Transport Projects

5. Success Factors

Urban Highways

Santiago Región Metropolitana

Autopista Central

MM USD 560

Costanera Norte

MM USD 525

Vespucio Sur

MMUSD 650

Túnel El Salto Kennedy

MM USD 70

Vespucio Norponiente

MM USD 320

Acceso Vial Aeropuerto Arturo Merino Benítez ®

MM USD 8,6

Acceso Nororiente a Santiago

MM USD 220

Interurban highways

Interurban Highways

Autopistas de la Región de

Antofagasta MM US$ 295

Túnel El Melón

MMUS$ 50

Santiago Los Andes MMU S$ 180

Camino Nogales Puchuncaví

MU S$ 12

Ruta 68 Santiago Valparaíso MMU S$ 400

Ruta 78 Santiago – San Antonio MM USD 198

Interurban Highways

Ruta 60 MMU S$ 370

Variante Melipilla MMU S$ 22

Red Vial Litoral Central MMU S$ 105

Camino de la Madera

MMUS$ 26

Ruta interportuaria Talcahuano

- penco

MMUS$ 28

Ruta 160 Coronel – Tres pinos

MMUS$ 320

Acceso Norte Concepción MMU S$ 197

Ruta 66 Camino de la fruta

MM US$ 315

Conexión vial Melipilla - Camino

de la fruta

MM US$ 35

Interurban Highways

Interurban Highways

Highway 5

Ruta 5 Norte, Tramo Vallenar - Caldera

MMUS$ 280

Ruta 5, Los Vilos - La Serena

MMUS$ 270

Ruta 5, Santiago - Los Vilos

MMUS$ 300

Ruta 5, Santiago – Talca

y Acceso Sur a Santiago

MMUS$ 850

Ruta 5, Ruta 5, Talca-Chillán

MMUS$ 190

Ruta 5, , Chillán - Collipulli

MMUS$ 290

Interurban Highways

Ruta 5, , Chillán - Collipulli

MMUS$ 290

Ruta 5, Collipulli - Temuco

MMUS$ 320

Ruta 5, Temuco - Rio Bueno

MMUS$ 240

Ruta 5, Rio Bueno-Puerto Montt

MMUS$ 300

Ruta 5, , Tramo Puerto Montt - Pargua

MMUS$ 157

Interurban Highways

Transantiago Infrastructure

Estaciones de Transbordo

MMUS$ 22

Estación de Intercambio Modal La Cisterna

MMUS$ 25

Corredor Suiza – Las Rejas

MMUS$ 22

Corredor Santa Rosa

MMUS$ 63

Agenda

1. How does the system started

2. Favorable context in chile

3. Awarded Projects

4. Concessions of Transport Projects

5. Success Factors

Success Factors

Chile´s economical stability, transparency, credibility, legal

system stability.

Public policy extensively validated.

Business models: attractive profitability, appropriate risk allocation, borrowing facilities.

Generation of competition in the tendering process.

Success Factors

Team work between all the parties: Concessions Coordination Department, Directions of the Ministry of Public Works, Ministry of Finance, Ministry of Planning, etc.

System is open to private initiatives.

Dispute resolution system.

Experienced team.

CHILEAN EXPERIENCE IN PUBLIC PRIVATE PARTNERSHIP

JOSÉ MIGUEL HIDALGO G Public Private Partnership (PPP) Consultant

josemiguelhidalgo@gmail.com August 2014