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Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
Ppp in israel 2009
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Ppp in israel 2009

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  • The Gov Interests for getting into PPP world can be summarized in these 3 bullets: Permanent growth, Outsourcing of Gov services & optimization that can be translated into economic efficiency
  • The reasons are: Best effect on growth, National need, efficiency, Technology
  • This is the typical model that is used in Israel. The entities and connections between them are based on the UK PPP model. The ceding authority, the SPV/C, the subcontractors/ third party operator for EPC & O&M, Sponsors (Equity and track record) & Lenders. 8-10 big sponsors & 2 major banks
  • Major pros & cons of PPP as we see it here are listed in this slide. The integration of short-long term concerns, the best mitigation of risks, and the efficiency of private sector hopefully deliver savings v. the tender costs & the extra risk premium of private sector.
  • Through the 12 years of PPP in Israel we’ve adopted the British model. And till today no record of controversial between what is accustomed by the world bank PPP standards and our projects. We offer local rating and refinance option for provident funds, Insurance companies and other institutional investors
  • Since we started with these improvements, we had foreign banks in Hadera Desali. And Tel Aviv LRT. we
  • מנהרות הכרמל טכנולוגיה ייחודית שלא הייתה קיימת בישראל המכרזים מפורסמים תוך ראיה בינלאומית מימון לט"ק זר וט"א ישראלי של גופים מוסדיים
  • Most projects are in the Transportation sector starting 12 years ago with the Carmel Tunnel and H-6, some 4years before other sectors
  • כביש 6 מעורבות של קבוצה קנדית ב- 25% מזכיין ו- 50% במפעיל מימון זר של כ- 20% על ידי מספר בנקים זרים
  • כביש 6 מעורבות של קבוצה קנדית ב- 25% מזכיין ו- 50% במפעיל מימון זר של כ- 20% על ידי מספר בנקים זרים הזכיין מורכב מ- בעלי המניות של החברה הינם: 20% אפריקה ישראל בע"מ. 20% אגד בע"מ. 20% סימנס SIEMENS -. 20% צ'יינה סיביל אינג'נירינג קונסטרקשן קורפוריישן . CCECC - 20% סוארס דה קוסטה SDC -.
  • Non committed list of future possible projects. The reason foe including these projects in the list the advanced analysis stage.
  • Non committed list of future possible projects. The reason foe including these projects in the list the advanced analysis stage.
  • Transcript

    • 1. PPP projects in Israel September 2011 Public Private Partnership Division .Inbal Insurance Company LtdMinistry of Finance The Division of PPP Projects
    • 2. Vision  Investments in infrastructure would enable to sustain Israel’s economy growth  Private sector’s involvement would improve level of government’s supplied services  Optimizing risk allocation between the public and the private sectors would contribute to public wealth2 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 3. Industries under Focus The government has decided to focus primarily on the following industries: Railroads/Mass Transit Systems Roads Water desalination and sewage treatment Construction Energy (IPP; LNG; Solar)3 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 4. PPP PPP/PFI – Major issues PPP/PFI In Israel4 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 5. Authorities Involved Along the Process Concession Agreement The Tender Management Governmental body WDA, JPTA, Steering CTA Committee Inter-Ministerial Cross Israel Tender Committee Designated Highway, Company Tel Aviv Mass Transit Ministry of Finance Relevant Government Ministries Inbal – The Division of PPP External Consultants5 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 6. Contractual Framework (Limited or Non-Recourse Structure) Government Sponsor(s) Project vehicle Lender(s) Equity (SPC( Financial Facility Construction Agr. Operating Agr. (EPC) (O&M (6 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 7. Project Feasibility Study Phase 1 - Project is economic economically feasible No feasibility study: Project will not be Cost/benefit implemented analysis Yes Business environment fits No PPP/PFI Public sector Phase 2 - implementation prior to and Yes using alternative during tender method process Project meets PPP/PFI criteria No - Phase 3 Yes Signing a Analyzing the concession agreement decision & Yes & implementation bids compared ‫החלטת‬ to the PSC Controlling its ‫ממשלה‬ execution7 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 8. Typical Risk Allocation Optimal Risk Allocation – each sector is responsible for the risks he can better mitigate Risk Public Private Shared Technology Land acquisition & Expropriation Detailed design Cost overruns Completion delay Archaeological findings (mainly Public) O&M costs Collection risk Force Majeure Discriminatory change in laws and legislation Political risk Market/Demand risk9 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 9. Typical PPP/PFI project Time Frame Excluding legislative related delays Project stage Time Frame (Months) • Appointing Tender Committee/Consultants 1 • PQ Documents 3-4 • Bidding the PQ 3 • List/Short List after PQ 1 • Tender documents 2 • Bidding of Tender 4-6 • Tender process 1-2 • Best & Final 1-2 • Sub Total 16-20 • Financial close 8-12 • Total 24-3210 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 10. Improvements in the Tender Rules Changes and improvements in the Tender Rules in order to facilitate the implementation of the projects:  Unified accounting principles (based on IASB).  Easing of tax treatment  Interest rate changes protection  Various indexation and protection options in accordance, to risks at the different project stages Steps to encourage institutional investors to participate in the PPP financing :  Indicative Rating to the projects (by Israeli rating co.)  Refinance option after Construction phase11 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 11. Encouraging foreign Participation Why foreign participation is needed? • Single borrower limitation (15%) • Low competition (2 major banks) – Equity: NIS 54B for the big 5; NIS 37B for the big 2. – ROE: 13.1% - 22% (9/2006 - big 5) • 7-8 major groups participating in all government projects Improvements in order to facilitate the participation of foreign bidders and foreign Lenders:  Foreign interest rate changes protection.  Foreign currency changes protection.  Various indexation and protection options in accordance, to risks at the different project stages  Payments to Concessionaire in foreign currency12 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 12. Foreign Entities participation • Technical Know-How  Bring professional expertise and experience.  Bring advanced technologies.  Bring more efficiency in the planning and execution of projects.  Improving the capability of Israeli entities. • Investment  Partnership between Israeli and foreign entrepreneurs.  Enlargement of foreign investments.13 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 13. Foreign Entities Involvement • Financing  Israel’s sovereign rating ( A – A+ ) attractive for international finance entities.  Improvements in Tender Rules encourages foreign participation : financing in USD / Euro with interest rate protection, various indexation protection at the different project stages.  Help to enlarge number of financing entities (single borrower limits for Israeli banks).  Stimulate competition – reduce financing costs  Offer new financing tools and solutions14 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 14. PPP PPP/PFI – Major issues PPP/PFI In Israel15 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 15. Volume of Operation by Sectors Construction costs 3% Transport: $ 6.3 billion 20% Water: $ 2.0 billion Construction: $ 0.3 billion 14% Energy : $ 1.4 billion 63% Total $ 10 billion Transport Energy Water Construction16 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 16. Main PPP Projects in Israel Cross Israel Highway (H-6) Carmel Tunnels LRTs Railways Roads No 431 + 531 Fast lane Desalination facilities Prison, Police National Academy Solar Plants, LNG Army Training Basis City17 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 17. Status of PPP Projects Transportation Projects Status Foreign Entities Involvement Cross-Israel Highway - In operation Both in the Central Section operation and in the financng of the project. Highway 431 In operation Financing of construction phase: HSBC (together with 3 Israeli banks) Cross-Israel Highway – Construction – work began in Both In the Section 18 June 2007 and is expected to operation part be completed by September and in finance 2009. part18 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 18. Status of PPP Projects Transportation Projects Status Foreign Entities Involvement Tel Aviv and Jerusalem Fast Construction – Construction “Siemens” is a Lanes work began in August 2007 subcontractor and is expected to be responsible for the completed by the first quarter unique toll system of 2010. Jerusalem LRT Construction – Construction A French company work began in August 2006 (“ALSTOM”) holds and is expected to be 20% share in completed by the third quarter consortium of 2010. Tel Aviv LRT Financial Closing – expected “Siemens” is part of to be completed in April 2009. the concessionaire. Financing of construction phase: RBS, Bayerische LB, KFW19 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 19. Status of PPP Projects Transportation Projects Status Foreign Entities Involvement Carmel Tunnels Construction –work began in A Chinese November 2006 and is expected company to be completed by the end of (“CCECC”) is 2010. involved in the tunneling works Highway 531 Financial Close –to be completed in July 2009.20 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 20. Geographic 531 Cross :location Israel Highway The ring roads around the Tel Aviv metropolitan area : Ayalon HW-20 North - 531 Tel Aviv East - Cross Israel (Hw 6) South - 431 West - Ayalon (Hw 20) 43121 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 21. Status of PPP Projects Desalination Projects Status Foreign Entities Involvement Ashkelon (100 m3/year) In operation A French company (Veolia Water ) is part of the consortium(50%) Palmachim (30 m3/year) In operation Hadera (100 m3/year) Construction - Financing of the project : construction of the facility Calyon Bank , EIB, will be completed by the Espirito Santo Bank, end of 2009. Dexia Bank, KFW. Sorek (150 m3/year) RFP released in January Foreign companies are 2009. Proposals to be part of bidding groups submitted in June 200922 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 22. Development of sea water desalination plants in Israel along the national system (100) Hadera Construction phase. Production at 12/09 Tendering stage 505 (150) 405 280 305 Full production Sorek Since 9/07 (30) Palmachim 100 130 145 160 (100) 36Tendering stage Ashdod 0 (100) 05 08 10 04 06 07 09 11 12 13 Ashkelon 20 20 20 20 20 20 20 20 20 20 Full production23 Since 12/05 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 23. Status of PPP Projects Energy Status Foreign Entities Involvement Solar Power Plants in the Negev RFP for 2 Thermal Foreign Desert power plants released companies are in March 2009 part of bidding PQ for Photovoltaic groups. plant expected to be released in April 2009. LNG PQ to be released pending Government approval.24 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 24. Status of PPP Projects Construction Status Foreign Projects Entities Involvement Beer Sheva Prison Construction - construction The operational of the facility will be company is going completed by June 2009. to be foreign Courts, Government Center Parking In operation Lot, Knesset expansion Training Center for The Israeli Police PQ –bids were submitted in Foreign June 2008. participant part of RFP expected to be bidding group. released in Q3/09 Ashdod Hospital PQ – bids were submitted in December 08. RFP expected to be released in Q2/0925 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 25. Expected additional Projects  Additional Roads & LRT lines (Tel-Aviv) including T/K & Build/Design projects  Additional Desalination Facilities  Hospitals (Including hotels, parking areas, shopping malls)  International Airport in Megido  Education (school PFI)  An international airport and the Peace Corridor projects (Coordination with Jordan)  Additional renewable energy projects  Protection of the Environment ( a committee has been appointed to make a preliminary study of potential projects )26 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 26. Thank you for your attention27 Ministry of Finance Ministry of Finance The Division of PPP Projects
    • 27. Contacts Mr. Abraham Tenne Head of Desalination Division and chairman of the WDA Tel : 972-3-6369688/676 Mobile : 972-50-6221342 E-mail :abrahamt@water.gov.il28 Ministry of Finance Ministry of Finance The Division of PPP Projects

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