What is PPP (recap) ?

Some sectors

Best Practice: Toll Road

Best Practice:

Hydro Power

Best Practice:

Smart University

Worst Case: Toll Road

Worst Case: Train route

Remarks

What is PPP

(recap) ?

Some sectors

Best Practice: Toll Road

Best Practic

e: Hydro Power

Best Practic

e: Smart

University

Worst Case: Toll

Road

Worst Case: Train route

Remarks

Jan van Schoonhoven Jan

- Navy officier (1982 – 1999)

- Director IRZM (1999 – 2003)

- PPP Project mng (2003-2006)

- Director PPP (2006-2012)

- United Nations (2012 – now)

Independent director PPP Center Kazachstan

Board member IPFA Netherlands

Added value

- PPP from a government perspective

- Public Sector Comparator

- Public Private Comparatoror

- Value for Money Government

- PPP Strategy for PPP Pipeline

- 3 continents

• In 8 years time

– 2 projects to 8 financial closes

– 20 Billion US$ projects

– 20 projects in tendering

Awarded projects

HSL

A59 (Provincial)

2nd Coentunnel near Amsterdam

N31 Road project

A12 Lunette – Veenedaal

A15 Mava

DBFM Light (Eelde- Airfield)

N33 Assen

Ring Road Amsterdam

A12 Ede – Grijsoord

N18 Varsseveld - Ede

A12/A15 doortrekking (VIA A15 / TOLL?)

13 / A16 / A 20 Rotterdam

A27 Lunetten-Hooipolder

Light Rail Groningen (City of Groningen

PPP in the Netherlands

PICTURES

WHAT IS PPP PUBLIC-PRIVATE PARTNERSHIP (PPP) REFERS TO ARRANGEMENTS, TYPICALLY MEDIUM TO LONG TERM, BETWEEN THE PUBLIC AND PRIVATE SECTORS WHEREBY SOME OF THE SERVICES THAT FALL UNDER THE RESPONSIBILITIES OF THE PUBLIC SECTOR ARE PROVIDED BY THE PRIVATE SECTOR, WITH CLEAR AGREEMENT ON SHARED OBJECTIVES FOR DELIVERY OF PUBLIC INFRASTRUCTURE AND/ OR PUBLIC SERVICES, IN MANY CASES ALSO WITH (PROJECT) FINANCE ARRANGEMENTS. ’INFRASTRUCTURE’ IS WATER, ROADS, TRANSPORT, (RENEWABLE) ENERGY , SCHOOLS AND HOUSING.

What is PPP

(recap) ?

Some

sectors

Best Practice: Toll

Road

Best Practice:

Hydro

Power

Best Practice:

Smart

Universit

y

Worst

Case: Toll

Road

Worst

Case: Train rout

e

Remarks

WHO NEEDS PPP ?

AID INSTRUMENT (FDA)

FOREIGN INVESTMENT

STRATEGIC PROCUREMENT

DEVELOPING / TRANSITION TRANSITION/DEVELOPED DEVELOPED

(ALMOST) ALL COUNTRIES, BUT, FOR DIFFERENT REASONS

NEEDED : ESSENTIAL MOR SURVIVAL

•WATER AND SANITATION

•HEALTH

•SCHOOLS

DESIRED : ESSENTIAL FOR DEVELOPMENT

• HEALTH AND SCHOOLS

•TRANSPORT (ROADS, AIRPORTS)

• ENERGY AND WATER

QUALITY AND SUISTAINABILITY: FOR THE FURRE

•WITHIN TINE AND BUDGET

• BETTER SERVICE FOR TAXPAYER

• INNOVATION AND MDG’S

INTERNATIONAL

• FINANICING PROBLEM

- Toll roads

- User Payment

- Foreign Investment

- BOT

- BTO

- VfM Financing

• BUDGET PROBLEM

• PFI scheme (UK)

• Availability Payment

• Quality and innovation

• Within Time

• Within Budget

• VfM quality

BEST PRACTICE ROADS

TOLL ROAD

MOTHER OF ALL CONTRACTS

(BOT – BFOT – BOOT - DBFMO)

TOLL ROAD (BOT): A71 WITH FAMOUS

MILLEAU BRIDGE 350 M EURO

75 YEAR CONSESSION

320 PRIVATE SECTOR

50 MILLION EIB

SAFE APP. 250 KM OF TRAVEL

UP TO 3-4 HOURS

RATES

JULY AND AUGUST: 6.1 EURO/CAR

REST: 4.6 EURO/ CAR

TRUCKS 19 EURO / TRUCK

SEE INFORMATION SHEET

10.000 CARS AS MINIMUM

CALCULATED 20.000

IN REALITY 25000 AVERAGE

IN HOLLIDAYS UP TO 50.000

Video Millau Bridge Mega Structure

BEST PRACTICE

• USER PAYMENT

• 350M CAPEX

• 100M 30 YEARS MAIN

• 100M TOLL COSTS

• 100M INTEREST

• 150M RISKS

• 200M TAX

• 1000M LCC

• 1000 EURO/ 20 YEARS

• YEAR: 50 M/ YEAR

• 160.000 DAILY CARS: TRUCKS 1:2

CAR 5 – TRUCK 19

• 3700 CARS

• 7440 TRUCKS

• TOTAL 11000 CARS

BEST PRACTICE HYDRO

ENERGY PPP

SISTER OF ALL CONTRACTS

PPA: Power Purchase Contract - BOT)

Tala Hydropower Plant PPP and Hydo Plant

Power purchase agreements (PPAs) may be appropriate where:

- The projected revenues of the project is uncertain;

- Protection from cheaper or subsidized domestic or international competition;

- There is one or a few major customers that will be taking the bulk of the product.

- The project company will want certainty of revenue; and,

- the purchaser wishes to secure security of supply

http://www.drukgreen.bt/index.php/khp-menu/pf-khp

FROM PPP PERSPECTIVE

ONE OF THE BEST (MAYBE THE BEST) INFORMATION (WEBSITE) FOR INVESTORS AND PRIVATE SECTOR REGARDING TRANSPARENCY,

INFORMATION AND ACCESSIBILITY

PPP construction

PPA essential

• Straight PPP Public body enters into an arrangement for a private power company to establish a power plant and then sell the power: PPA.

• Plant is BOT

• User payment: the PPA Sale of capacity and energy - the power producer agrees to make available to the Purchaser the contracted capacity of energy and deliver the energy in accordance with the PPA.

Neighbour Nepal

SUGGESTIONS

Current situation:

Funding by Indian and Bhutan government

Future situation

Attract private investors,

BOT towards private sector

• The United Nations works with Centre of Excellence.

• Bhutan Centre of Excellence on Hydropower and PPP?

BEST PRACTICE HOSPITALS

DBFM /PFI TYPE

PROJECT FINANCE TYPE

Hospital do Suburbio (Brazil)

PPP IN HOSPITAL

Free healthcare is essential to the pubic, but a burden for the budget.

If privatisation is (political) no option, PPP is a good solution:

- Increase efficiency

- Release Budget pressure

- Increase quality

1.68 MILLION medical procedures Including 680 emergency prcodures 298 beds

PPP construction

Private Sector

• Hospital 298 beds

• Medical equipment

• Daily operations – Cleaning and Washing

– Preparing rooms

– Medical equipment

10 year Concession

• Invest US23 million DBM

• Invest US 9 Million for O

• Extra: created: 1200 jobs

Old situation

• 298 beds

• Beds in Brazil cost (BTR WHO)

– Public hospital 32,3%

– PPP hospitals 50,2% %

• Bed occupancy (BOR) – Public hospitals 64

– PPP hospital 35

Remarks

• Make a distinction between budget and financing challenge – (toll road versus hospital)

• Apart law and regulations for this distinction (tax law, procurement law) – Toll road, concessionaire tax!

– Availability payment and tax?

• Value for Money is different – Toll road: lowest User Fee

– Hospital price/quality

• Define VfM very well in in relation with project outcome or challenge: – Number of beds

– Number of occupancy of beds

– Number of treatment

- PPP only works if there is a pipeline of projects

- PPP is only successful if next to PPP law, PPP policy and framework there is a open and transparent procurement process as well

Synonym:

- PPP Law is the car

- PPP Framework is the Engine

- PPP Tender process the Road

- PPP Unit the driver

CHALLENGES AHEAD

SAFE JOURNEY

JAN VAN SCHOONHOVEN COUNSELLOR ON INFRA AND PPP MANAGER UNECE INTERNATIONAL CENTRE OF EXCELLENCE JAN.VANSCHOONHOVEN@UNECE.ORG WWW.UNECE.ORG 0041 78 6465162