Street Lighting Public Private Partnerships in France, United Kingdom.

1. Sector Focus
December 2012
CLARET CONSULTINGLLC
Street Lighting
Public-Private Partnerships | P3

2. Contents
 Introduction
 Street Lighting P3 in France
 Street Lighting P3 in the UK
 Conclusion

3. Introduction

4. Street Lighting
 Helps to reduce crime & fear of crime
 Improves road safety
 Helps reduce traffic accidents
 Encourages commercial activity & the
use of public facilities
 Some studies have indicated that for
every $1 spent on street lighting, $5
can be saved in terms of crime and
traffic accidents
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5. Street Lighting P3
 Street lighting consumes a significant
amount of energy
 Major cost for public budgets
 Traditional energy sources contribute to
pollution
 New/renewed infrastructure requires capital
investment
 Street lighting P3 presents the opportunity
to increase energy efficiency & attract
private capital investment
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6. Variations & Opportunities
 Street & Highway Maintenance
 Traffic lights
 Telesurveillance
 WiFi
 Electric car charging stations
 Solar panels
 Holiday & Special Event Lighting
 Monument & Historic Building
Lighting
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7. Street Lighting
P3 in France

8. Street Lighting P3 in France
 France is currently the leading country in terms of
street lighting P3s
 Street lighting is a significant component of the
French P3 program, comprising approximately 20
percent of the overall project pipeline since 2004
 Approximately 50 street lighting P3 projects have
been procured in France
 Nearly all of the street lighting P3 projects in France
were less than $40 million in capital value
 All were procured by local government agencies
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9. Project Accounting
 Private partner takes depreciation of
asset but does not pay property tax
 Asset is depreciated over life of
project
 Asset worth = 0 at end of project
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10. Number of French Projects by Year
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11. Signed French Street Lighting P3s
11
Contract
Signed
Public
Procurement
Notice
Study
Launched City/Region
9/11/2012 7/26/2011 7/1/2010 Avingon
9/6/2012 5/13/2011 11/30/2010 Hazebrouck (59)
8/9/2012 12/31/2010 7/29/2009 Valenciennes (59)
7/20/2012 8/17/2011 10/23/2010 Savigny le Temple - Nandy (77)
6/27/2012 7/8/2011 7/8/2011 Chasse sur Rhone (38)
6/13/2012 10/8/2011 10/10/2009 Gouzon (230
5/19/2012 11/17/2010 9/1/2009 Onnaing (59)
4/19/2012 2/9/2011 11/30/2010 Maubeuge (59)
3/20/2012 5/24/2011 7/20/2010 Maurepas (78)
3/8/2012 4/23/2011 4/6/2011 Sable/Sarthe (72)
1/28/2012 11/5/2010 5/5/2010 Goussainville (95)
12/5/2011 12/17/2010 6/15/2009 Checy (45)
11/18/2011 9/17/2010 9/17/2010 Domont (95) CC Ouest Plaine
11/17/2011 2/11/2011 2/11/2011 Marly (59)
10/3/2011 11/25/2010 11/25/2010 Leucate (11)
9/14/2011 10/6/2009 8/8/2008 Digoin (71)
8/1/2011 4/7/2010 1/21/2009 Chaumont (52)
4/29/2011 4/27/2010 1/7/2009 Bougival (78)
4/19/2011 5/18/2010 7/28/2009 Arcachon (33)
3/25/2011 1/28/2010 1/28/2010 Val de Reuil (27)
2/15/2011 1/23/2010 1/23/2010 Pont-A-Marcq (59)
1/14/2011 7/16/2009 7/16/2009 Aix les Bains (73)

12. Signed French Street Lighting P3s
12
Contract
Signed
Public
Procurement
Notice
Study
Launched City/Region
1/14/2011 3/24/2010 7/7/2008 Sassenage (38)
12/6/2010 4/24/2010 9/28/2009 Pointe a pitre
11/15/2010 12/23/2009 12/23/2009 Moissy-Cramayel (77)
7/20/2010 5/26/2009 5/26/2009 Thiais (94)
4/29/2010 6/18/2009 6/15/2009 CC Beaucaire (30)
1/4/2010 4/22/2009 11/6/2008 Longjumeau (91)
10/23/2009 12/19/2008 8/1/2008 beaune (21)
5/25/2009 7/19/2008 Vallauris-Golfe Juan-Antibes
5/20/2009 11/30/2007 Divonne les bains (01)
7/28/2008 12/16/2006 2/28/2006 Boulogne (CA val de Seine)
6/6/2008 7/26/2007 Louvroil (59)
2/6/2008 7/12/2007 3/14/2006 Ville de Saint Fons (69)
1/17/2008 6/1/2007 6/1/2007 Contres (41)
1/14/2008 1/30/2007 Libourne (33)
1/1/2008 1/30/2007 7/11/2006 Soissons (02)
12/13/2007 1/6/2007 Senart (91)
12/10/2007 2/16/2007 Autun (71)
8/3/2007 8/8/2006 Bussy St Georges (77)
7/29/2007 11/3/2006 Saumur (49)
7/7/2007 5/24/2006 Ville d'Agde (34)
6/17/2007 12/30/2006 1/5/2006 Ville Herouville St Clair (14)
3/5/2007 3/10/2006 5/13/2005 Rouen (76)
1/17/2007 12/12/2006 Chatillon sur Chalaronne (01)
10/30/2006 11/8/2005 7/22/2005 Castelnau de Lez (34)
9/27/2006 2/6/2006 Ville de Thiers (63)
5/15/2005 12/7/2004 Ville d'Auvers sur Oise (95)

13. Private Partners in France
13

14. Case Study on 3 Projects
14
Contract
Signed
Public
Procurement
Notice
Study
Launched City/Region Population
7/20/2012 8/17/2011 10/23/2010 Savigny le Temple - Nandy (77) 30,000
11/15/2010 12/23/2009 12/23/2009 Moissy-Cramayel (77) 17,000
12/13/2007 1/6/2007 Senart (91) 100,000

15. Comparison of 3 Projects
 Contracts very similar
 Variations in scope: traffic lights,
telesurveillance included
 Major differences in financing: pre &
post crisis
 Dexia out of market
 Deals too small for typical project
finance banks
15

16. SAN de Senart
 4 cities with a total population of 16,000
 Originally 2800 lamps, now 3500
 $13 million project
 $6.5 million capex, $6.5 million opex
 Originally sodium technology, now
switching to LED
 Project start date 1/1/08
 SPIE was one of two companies with
outsourced contract prior to P3
procurement, now P3 partner
16

17. Senart Street Lighting P3
 Maximum availability payment fixed
 Companies bid on amount & timing of
capital investment (#1 evaluation criteria,
>50% of evaluation)
 #2 evaluation criteria – energy savings
 Minimum was 25%
 SPIE offered 35%, now at 45%
 Technique to dim lights throughout the
night until @ 60% by dawn
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18. Overview of Moissy-Cramayel
 Population of 17,600
 $28.6 million muni operating budget
 $6.24 million muni capital budget
18

19. Street Lighting in Moissy-Cramayel
 2,728 luminaires
 1,134 in need of replacement
 588 medium quality
 1,006 in good condition (from new
housing development)
 Previously maintained under 1-year
contract renewable up to 3 times
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20. The Process
 Assessment
 Replacement/renovation in Year 1
 Kept initial investment to an
amount less than three years of
capital budget
 PSC vs. P3 – prices equal, choice
drive by qualitative considerations,
risk transfer
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21. The Deal
 $9.23 million capital investment, including
traffic lights at 7 intersections
 15-year contract
 $949,000 annual payment
 $650,000 principal payments
 100% equity financing up front
 After construction, 80% bank financing
 Low equity rate – 2-3% - made SPIE
competitive
21

22. Telesurveillance
 $1.3 million extra capital
investment
 Originally for Central
Business District, then added
to 2-3 other areas
 Local police have access to
live feed
 National police keep
recordings
22

23. Results
 $50,000 annual savings in electricity usage out of a
total budget of $695,000 with 300 additional lights
(move from 2700 to 3000)
 Contract start date 1/1/11
 Capital works 6 months past deadline
 Insufficient diagnostic work done prior to
procurement
 Insufficient time for assessment by private partner
after contract signed
 Allowed 1 month, needed 3 & they were
incumbent
 New partner would need 6 months
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24. Street Lighting
P3 in the UK

25. UK PFI Program
 The first Street Lighting PFI project
award was in December 1998
 The program has awarded a total of
£1,340m in PFI Credits to 34 local
authorities
 The program has been developed
and progressed in tranches
25

26. Project Tranches
 10 pathfinder projects (£210m) informed the development
of sector standardized documentation and best practice.
All of these projects are operational.
 10 further projects (£400m) in 2003 after a competitive
1st Bidding Round. These projects were supported by
standardized processes and documentation via the Local
Partnerships Street Lighting Procurement Pack. All bar one
of the projects are currently operational.
 9 more projects (involving 14 authorities) were awarded
PFI Credits to a value of £720m in 2006 after a
competitive 2nd Bidding Round. The projects are
supported by an updated version of the Street Lighting
Procurement Pack, a Local Partnerships Network Group
and training services.
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27. UK Street Lighting Projects
27
Financial
Close Project Capex
8/3/2010 Coventry Street Lighting 51.0
5/1/2010 Nottingham City Street Lighting 56.5
12/18/2009 Blackpool Street Lighting & Traffic Signals 40.1
12/10/2009 Hampshire Street Lighting 126.0
12/10/2009 West Sussex Street Lighting 81.2
12/10/2009 Southampton Street Lighting 25.8
11/27/2009 Surrey Street Lighting 84.0
11/2/2007 Norfolk Street Lighting 41.6
8/1/2007 Redcar & Cleveland Street Lighting 20.9
4/1/2007 Derby Street Lighting 45.2
10/1/2006 Dorset Street Lighting 43.1
4/1/2006 Leeds Street Lighting 94.6
4/1/2006 Enfield Street Lighting 25.9

28. UK Street Lighting Projects
28
Financial
Close Project Capex
3/1/2006 Barnet Street Lighting 19.2
12/1/2005 South Tyneside Street Lighting 36.0
11/1/2005 Lambeth Street Lighting 17.2
7/1/2005 Ealing Street Lighting 34.3
3/1/2004 Manchester Street Lighting 38.3
3/1/2004 North Tyneside & Newcastle Street Lighting 82.3
12/1/2003 Wakefield Street Lighting 30.4
8/1/2003 Sunderland Street Lighting 27.4
8/1/2003 Stoke Street Lighting 22.6
5/22/2003 Islington Street Lighting 15.0
4/1/2003 Staffordshire Street Lighting
3/1/2002 Walsall Street Lighting 25.9
12/1/1998 Brent Street Lighting 9.4

29. Main Private Partners in UK
29
Private Partner # Projects
Balfour Beatty plc 4
John Laing PLC 3
Scottish and Southern Energy plc 3
David Webster Limited 2
Southern Electric Contracting Ltd 2
Amey Ventures Investments Ltd 1
E.on UK Energy Services Ltd 1
Equitix 1
Group Holdings Ltd 1
IIC Project Ltd 1
London Borough of Lambeth 1
Skanska Infrastructure Investment UK Ltd 1
SSE Lighting Services No. 2 1
Tay Valley Lighting 1
TVL 100% (this is a corporately financed project) 1
Total 26

30. Number & Value of
UK Street Lighting PFIs
30

31.  40 road construction schemes vs. 3 or 4
annually under previous contract
 850 lamp columns replaced vs. 200/year
previously
 Reduced complaints @ City Help Desk
First Six Months of
Portsmouth Highway P3
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32. UK Street Lighting P3 Case Studies
 Brent
 http://www.localpartnerships.org.uk/UserFiles/Fil
e/Publications/Brent%20Case%20Study.pdf
 Cambridge
 http://www.cambridgeshire.gov.uk/transport/ligh
ts/streetlighting/street+lighting+PFI.htm
 Hampshire
 http://www3.hants.gov.uk/roads/street-
lighting/pfi-documents.htm
 Amey Case Study on Birmingham
 http://www.amey.co.uk/AmeyinYourRegion/Midla
nds/BirminghamPFI.aspx
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33. Conclusion

34. Street Lighting P3
 Opportunity for innovation,
efficiency & private capital
 Need for a knowledgeable &
experienced financial advisor
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35. Claret Consulting, LLC
• Boutique Financial Advisory &
Consulting Firm
• Based in Washington, DC
• Established in 2007
• US & International Experience
• Specialized in Project Finance &
Public-Private Partnerships
35

36. Contact
Brien Desilets | Claret ConsultingLLC
Managing Director| 1717 Pennsylvania Avenue, NW | Suite 1025 | Washington, DC 20006
Tel (01) 559 9037| bdesilets@claretconsult.com | www.claretconsult.com
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