Patricio Mansilla - PPP in Africa
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Patricio Mansilla - PPP in Africa Patricio Mansilla - PPP in Africa Presentation Transcript

  • PPPs for East Africa Competitiveness and TradeExpansion Program (COMPETE) Patricio Mansilla Director Infrastructure Chemonics International Nairobi-Kenya, April, 2009 1
  • Agenda1. Chemonics Relevant and Sucessful Experience in Transport Multimodal Infrastructure Investment2. Infrastructure Investment in East Africa Multimodal Corridors3. Main Expected Results of the Infrastructure Investment Plan 2
  • Chemonics Relevant andSuccessful Experiences in Transport MultimodalInfrastructure Investment 3
  • Our Approach to PPP• Approach PPP infrastructure development as a Program rather that ad-hoc transactions.• Provide specialized Technical Assistance through the entire project life-cycle• Do not short-change project preparation costs• Promote vigorous, open, and transparent competition• Look for opportunities to leverage public sector funding• Strengthen the legal/regulatory and institutional frameworks 4
  • USAID Successful PPP Program in Peru Chemonics PRA Project PRA PPP Unit Demand and Engineering Contracts Environment Financial 5
  • Transport PPP Transactions Amazon North: 960 Km. Investments: $220 mil. O&M: $15 mil./year Paita Port Awarded in: April 2005 $120 mil. Awarded: April 2009 FBT: 480 Km. Investments: $162 mill. Amazon Central: 854 Km. Investments: $115 mil. South Container O&M: $15 mil./year Terminal Port of Callao $364-$617mil.Awarded: June 2006
  • m.o.l.s.6000 Ticlio Challenging Altitude5000 Junín DV of Peru´s Central Cerro de Pasco4000 La Oroya Corridor3000 Matucana East2000 West Huánuco Chosica1000 DV Tingo María Lima Pucallpa 0 0 km 100 200 300 400 500 600 700 800 km 900 7
  • Project Example: Amazon North Road• A 25-year Concession Contract Government of Peru´s US$ to improve, rehabilitate, operate annual contributions Millions and maintain 960 Km. of road infrastructure between Paita Annual Payment for US$ 29 and Yurimaguas Construction for 10• Initial investments: years – Phase I (years 1-2): US$ 95.0 million Annual Payment for US$ 15 – Phase II (years 2-4): US$ Operation and 120.0 million Maintenance for 20 – TOTAL: years US$ 215 million Bidders request Government• Average annual O&M: US$ contribution as part of their 15.0 million proposals.
  • Amazon North Transaction Structure Transport Ministry of Ministry of Regulator Regulation Transport Finance and Supervision 25 year Concession Annual O&M Tolls Contract 15 annual Payments ($15 construction mill) Concessionaire payments Amazon North ($29 mill.) Special Purpose Road Concession Company (SPC) Trust Road Improvements, Bond Partial ($60 mill.) Rehabilitation ($220 Issue CreditBridge Loan m), and O&M Guarantee(Advances) ($15m/year) International Inter-American Development Multilateral Bank Capital Coupon Bank Markets Payments (i + p)
  • Results: Reduced TransportCosts/Time BEFORE: Unpaved Road AFTER: Paved road Yurimaguas - Tarapoto (125 km) Yurimaguas - Tarapoto (125 km) Transport of cargo Transport of cargo Time: 12 hours Time: 4 hours (-70%) Cost: $53/T Cost: $30/T Cost: T/km.= $0.50 Cost: T/km= $0.25 (-50%) Transport of passengers Transport of passengers Time: 6 hours Time: 3 hours (-50%) Cost: $10/passenger Cost: $5/passenger (-50%) Average Transport costs for RICE, YELLOW CORN, and HARDWOOD
  • AmazonIIRSA NorthDeal of theYear 2006
  • Callao Port
  • PPP Evolution in Peru Phase PPP Projects Arequipa-Matarani Road Matarani PortPhase 1 (1990-2004) Lima Airport Red Vial 5 (Ancón-Huacho-Pativilca) Road IIRSA North Road Red Vial 6 (Lima-Ica) Road IIRSA South (Segments 2-3-4)Phase 2 (2005-2007) South Container Terminal –Callao Port North Group Regional Airports Costa-Sierra Program (Buenos Aires-Canchaque Road) IIRSA South Road (Segments 1-5) IIRSA Central Road Red Vial 1 RoadPhase 3 (2008-2010) Red Vial 4 Road North South Regional Airports Ports of Pisco, Paita, Ilo and Salaverry 13Total Investments US$3 billion
  • USAID/ Chemonics Impact in PeruResults1. Increase productivity of 42.000 small business generating more than $300 million in sales and 82,000 new jobs. New investments $20 million2. Technical assistance to design and implement PPP transactions with investments for around $1 billion and $40 million in direct infrastructure investment. Currently the Peruvian government has a PPP Program for $3 billion3. GDP(1998) $52 billion to $134 (2009). Exports (1998) $5,6 billion to $28 billion 14
  • Mongolia Customs and Logistic Park Private Min.Finance MFFA Contributes Min. Road, Transport Shareholders Contributes SPC-UBTZ Equity LandDividends Contributes Dividends Dividends Tariffs Equity Operation Company Payment for Regulatory Operation Services: Agency or Logistic Park Contract services ParkingRegulation by Development Co. Road-Rail contract Rail-Rail Tariff Regulation Fee Payment Consolidation Warehouse Regulation Bond Coupon Issue Payments (i + p) Construction Specific contract Capital Users Company Markets
  • USAID/South Africa PPP Unit Program (1999-2005)• Established the PPP Unit within the National Treasury• Developed the policy/regulatory framework for PPP – under Regulation 16 of PFMA• Prepared guidelines and manuals on the regulatory requirements – National Treasury PPP Manual – Companion manual on standardized provisions of PPP/agreements• Establish a Project Development Fund to improve quality of PPP• Built a portfolio of transactions• Launched a highly effective stakeholder awareness campaign to educate the private sector in procurement requirements 16
  • Key Elements1. USAID Technical Support: through the transaction life cycle (precept/alpha-omega)2. Credibility and Transparency: in the bidding process3. Competition²: lowest cost reduces opportunities for corruption4. Risk Analysis: Allocate the risk to the partie better prepared. Example: annual minimum revenue guarantee.5. Coherent and Consistent Technical Studies: This is Private Investment not Public Investment. Technical studies well designed to insure private sector buying.6. Shadow Rating: very important to discover if the transaction business model is attractive for the private sector and financially viable.7. Partial Credit Guarantee: bring more credibility to the process and make feasible the financial operation8. Environmental Studies: promote citizen participation and need to mitigate environmental problems in conformance of EPA section 216****
  • Infrastructure Investment in East Africa Multimodal Corridors 18
  • Northern and Central Corridors NORTHERN Kampala CORRIDOR 1800 kms KigaliBujumbura Mombasa 1530 kms CENTRAL CORRIDOR Dar Es Salaam 19
  • Northern Road Corridor 20
  • Northern Rail Corridor 21
  • Comparative Transport Corridors Callao Port Paita Port Mombasa Port Dar El SalaamCharacteristics Peru Peru Kenya Tanzania Dubai Ports Tertir Terminais-Translei Under (Portugal) and Cosmos Kenya Ports AuthorityContainer Terminal Construction (Perú) Require invest in a Hutchinson PortsOperation $700 million in 3 Adjudicated April 1/2009 second container 10 years contract stages (30 years $120 milion (BOT terminal BOT contract contract 30 years) 1.1 million TEUDemand 0.8 million TEU 0.13 million TEU 0.6 million TEU 0.3 million TEU (at the time of bidding)Gantry Cranes 4 40 tons ship to shore No Gantry Cranes No gantry cranes 2 gantry cranes(Current situation) gantry cranes 29 million 29 million 39 million 43 millionPopulation $134 bill ($44 $134 bill ($44 bill year $33 bill $22 billGDP (IMF forecast year 1994 and 1994 and $60 bill year2009) $60 year 2003) 2003)Trade-Exports $4,1 bill $2,3 bill $28bill $28bill 22
  • Road Management System Long Run Road Strategic Plan Road Data Base HDM-III Inventory Multi annual Road Program Road HDM4 condition Level of ProjectRoad Traffic Costs Policies and standard INPUTS OUTPUTS
  • Financial Analysis Roads Railways PortsRevenues: Toll Roads, Port Tariffs and Equity: Capital from investors (20%-30%Railways Tariffs of investment)Revenues: Commercial Services in Ports Co-Funds: Governments or Donors Fundsand Railways. Real Estate and Land Use in Debt: Between 70% - 80% of totalRoads investmentCosts: Maintenance Costs and OperationCostsTaxes: Value Added Tax and Profit Tax International Capital Market: SponsorsDepreciation or Amortization of Assets must to have strong technical and financial credentials. Partial Risk/Credit Guarantees are highly desirable.
  • Transaction Transaction Design ImplementationDefine Objectives/ Select PPP option Draft bidding documents/contractsDue Diligence / Technical Project Design Local/International PromotionDemand Study /Financial Structuring Pre-qualification Risk Allocation & Mitigation Bidder due-diligenceShadow Rating/Credit Enhancement Interaction with Bidders “negotiation” Environmental Studies PPP Contracts/Procurement Process Tech/Fin/legal Transaction Design Contract Award / Financial ClosureConsultation with key stakeholders: Build consensus, political commitment, and public support
  • Main Expected Results of theInfrastructure Investment Plan 26
  • Expected ImpactsCountry/Transport Sector Technical and Economic Appraisal of the business Northern Corridor under PPPKenya Support for the Identify the Infrastructure Needs $1 billon? current PPP $1 billon? Attract Financing $0.5 billion? Technical Assistance Appraisal of the business Central Corridor under PPPTanzania for PPP Central Corridor Identify the Infrastructure Needs $1 billon? $3.5 billon? Attract Financing $0.1 billion? PPP or Public Investment in Technical Assistance Customs EfficiencyUganda Central and Northern Roads for PPP Central Corridor Financing/Port Tariffs PPP or Public Investment in Technical Assistance Customs EfficiencyRwanda Central and Northern Roads for PPP Central Corridor Financing/Port Tariffs PPP or Public Investment in Technical Assistance Customs EfficiencyBurundi Central and Northern Roads for PPP Central Corridor Financing/Port Tariffs 27
  • Expected Impacts1. Adequate understanding of the multimodal transport situation in the corridors2. Identification of regulatory/institutional problems and lack of infrastructure3. Promote coordination between authorities and stakeholders4. Realistic Program to accelerate investment in infrastructure in both corridors5. Identification and adequate implementation of the PPP opportunities6. Promote sustainability of the Infrastructure Program7. Reduce transaction costs for private and public investment in infrastructure8. Motivate the expansion of the financial markets GDP Competitiveness Competitiveness Index Country (2009 IMF forecast) Index Overall Infrastructure Kenya 33.044 93 91 Tanzania 22.106 113 118 Uganda 14.863 128 115 Rwanda 4.188 - - Burundi 1.309 132 129 28
  • Many Thanks! 29