2. Concession for the Mário Covas Ring Road –
West Segment
Object of Concession
Av. Raimundo Magalhães (SP-332) – km 0.0
Rod. Dos Bandeirantes (SP-348) – km 3.9
Rod. Anhanguera (SP-330) – km 7.0
Rod. Castello Branco (SP-280) – km 14.4
Interseção da Padroeira – km 19.7 (Padroeira
ç (
Intersection)
Rod. Raposo Tavares (SP-270) – km 24.4
West Segment
g
Rod. Ré i Bittencourt (BR 116) – k 29 4
R d Régis Bitt t (BR-116) km 29.4
-2-
3. Characteristics of Mário Covas Ring Road –
West Segment
• Onerous Concession model:
Fixed
Fi d grant: R$ 2 billi (10% cash + 24 i t ll
t billion h installments R$ 75 MM)
t
Variable grant: 3% of gross revenue
• Operation term: 30 years;
• Readjustment: IPCA index on July 1st;
• Tariff offered: R$ 1.1684 (base date – July/07);
• Urban highway 100% tolled;
• 13 toll plazas;
• Length: 29.4 km.
-3-
4. Concession for the Mário Covas Ring Road –
West Segment
Initial Investment Program (6 months)
• Paving;
• Right of Way;
• Drainage;
•Highway Safety;
Highway
• Signaling; R$ 49.0 million
• Structures;
• Buildings and Yards;
• Lighting;
• Toll Plazas.
Plazas
-4-
5. Concession for the Mário Covas Ring Road –
West Segment
Operating Services
• Towing Services;
• First Aid and Medical Care Services;
• Traffic Inspection Services;
• A i l Rescue on Right of Ways;
Animal R Ri ht f W
• Water Truck Services
Services.
-5-
7. Investments – Works
Assumptions
Investments
I t t CCR
Implementations and Improvements 169,804,721
Special Maintenance 156,831,998
Expropriation 10,889,000
Research and Projects 33,381,665
TOTAL WORKS 370,907,384
Engelog
• Engineering and technology center > assumptions are based on the experience
acquired in the management of the current concession portfolio;
• Concrete pavement requires lower maintenance;
• New maintenance technology;
• Use of engineering solutions already in use in the other concessions in the
State of São Paulo;
• Gains of scale in contracting.
-7-
8. Investments – Equipment, Systems and Vehicles
Assumptions
Investments CCR
Equipment and Operating Systems 83,453,900
Administrative, Operating and Police Vehicles (PMRv): 10,814,400
TOTAL EQUIPMENT, SYSTEMS, VEHICLES
, , 94,268,300
, ,
Engelog
• Engineering and technology center – the equipment and operating systems will
be similar to those projected and contracted in other concessions in São Paulo
state;
• Vehicle fleet were dimensioned to meet the requirements stipulated in the
concession contract.
-8-
9. Operating Costs
Assumptions
COSTS CCR
Administrative and Operating Labor Force 593,612,898
Administrative and Operating Consumption 404,656,898
Routine Maintenance 155,725,818
Insurances and Guarantees 113,935,526
TOTAL 1,267,931,140
Synergies
• Labor Force: sharing, when possible, with ViaOeste, thus optimizing costs;
• Routine Maintenance: gains of scale through hiring made by Engelog;
• Insurances and Guarantees: gains of scale via umbrella policy.
-9-
10. Financing
Assumptions
Bridge Loan:
g
• Type: promissory notes;
• Amount: R$ 650 million;
• Compensation: CDI + 1.25%;
• Term: 180 days;
• Payment of face value and compensation: upon maturity date.
date
Long-Term Financing:
• Instrument: A/B Loan – BID + Commercial banks;
• Amount: approximately US$ 950 million;
• Interest Rate: Libor + 2.40% p.a. (+/- 0.20%);
• Term: up to 7 years renewable for 8 years
years, years.
- 10 -
11. Features of the Proposal
Main Considerations
• Gross Revenue: R$ 14.3 billion (constant currency);
( y);
• Net Revenue: R$ 13.0 billion (constant currency);
• EBITDA Margin: 85% (average 30 years);
• Real IRR Unleveraged: 9.3% p.a.;
• Real IRR Leveraged: 15.2% p.a.;
• Cash Generation Initial Date: November;
• Takeout Capital Structure: 25% capital / 75% debt;
• Grant: the fixed portion (R$ 2 billion) is booked as early expenses, since its
p ( ) y p
disbursement occurs in the beginning of the concession. The variable part, 3% of
toll revenues, is booked as cost, since its disbursement occurs throughout the
concession, or 30 years;
• Scheduled date for entry into the south portion: 1st quarter 2010.
- 11 -
