Public Private Partnerships

(1)

CENTRAL EUROPE Project ACT4PPP

PPP-Forum „Possibilities and challenges of financing

public private partnership by EU Structural Funds”

P i

i l

d O

i

ti

l M d l

f

Principles and Organisational Models of

Public Private Partnerships

Idee. Analyse. Strategie. ERFOLG BRAUCHT KOM PETENZ

(2)

Agenda

General understanding of PPP Developments of PPP in Germany

Current experiences from PPP projects à Decision Making Process

à Tenderinge de g

à Applied Contract Models Project Examples

P bli R l E t t à Public Real Estate à Public Infrastructure

Idee. Analyse. Strategie. ERFOLG BRAUCHT KOM PETENZ 2

(3)

The Company

Founded in early 2004

Spin-off from the Faculty of Civil and Structural Engineering, Chair of Construction Economics, at Bauhaus-University Weimar, Germanyy y Limited liability company corresponding to German law (GmbH)

Close collaboration between Alfen Consult GmbH and the Bauhaus-Universität Weimar

Universität Weimar

Founder and managing director is Prof. Dr. Hans Wilhelm Alfen

Economical / Feasibility Studies

Our PPP - Activities

Risk Management

Financial Models

Life Cycle Costing

Life-Cycle-Costing

Structuring and Implementation of Procurement Processes

Tendering and AwardTendering and Award

Business and Market Analyses

Business Consulting

(4)

Business fields

Construction

Construction Economics

Small and Medium Enterprises

Infrastructure

(Transportation, Water, Energy, Waste etc )

Small and Medium Enterprises (SME)

Strategic and Process Management Waste etc.) Infrastructure Economics Privatisation-, PSP- and PPP-Models Management

Organisational and Business Field Development

Models

Sector Analyses

Regulation and Deregulation

Real Estate Cross Disciplinary Subjects

Real Estate

Real Estate Economics PPP in Public Real Estate

(S h l H it l P i

Cross Disciplinary Subjects

Project Development and Finance Risk-Management

(Schools, Hospitals, Prisons, Administration Buildings etc.) Corporate Real Estate

M t (CREM)

„Value Engineering“ „Life Cycle Costing“ Facility Management Management (CREM)

Public Real Estate Management (PREM)

y g

Training and Capacity building

(5)

Selected References

P bli R l E t t M

F d l G t • Public Real Estate Manager

• Study on PREM of the federal government

• Study on international best

• Federal Government

• Economical/Financial Consultancy for preparation tender & award of 6 F- and

A-Models in Roads&Highways (2004-08) Study on international best practice in the defence sector, g.e.b.b. (2005)

• Consulting on Risk

M t f th fi t f d l A Models in Roads&Highways (2004 08)

• Scientific Support to the determination of the first Toll Ordinances in Germany

Management for the first federal PPP Pilot Project in defence, g.e.b.b. (2006)

• development and introduction of

• State Ministries

• Guidelines PSC in NRW and FMK (2003 / 06)

• Support of Thuringian PPP Task Force (2005)

• Economical/Financial Consultancy on the p

risk management solutions, BBR (2008)

P i t C i

• Economical/Financial Consultancy on the viability of a police administration (2005) • Capacity Building and training on financial modelling an risk management (2009)

• Private Companies

• Study on PPP Models for the German Autobahn, Highways (2003/04)

• Municipalities

• Economical / Financial Consultancy for

preparation tendering & award of (2003/04)

• management consultancy for international Cement Supplier (2008)

preparation, tendering & award of

- PPP schools in Meschede (2003/04) - PPP bridges in Frankfurt (2006)

- PPP sports facility in Bestensee (2006) - PPP hospital in Viersen (2006)

- PPP roads in Waldeck-Frankenberg (2006) - PPP roads in Lippe (2007)

- PPP urban development Ruhrbania (2007)

- PPP urban development Ruhrbania (2007) - German Aerospace Centre (2008)

(6)

Company profile – Our Experts

Longtime experience in consulting public authorities at project

development, PPP-schemes, advising tendering and awarding processes Background

Director of the business division Public Real Estate at Alfen Consult GmbH (since 2005)

Project Manager at Ernst & Young

Master of Science (M.Sc.) in “Real Estate Management” Master in Civil Engineering (Dipl.-Ing.)

Dipl. Ing. M.Sc. Michael Frank

g g ( p g )

Selected experience

Development of business models for German Aerospace CentreDevelopment of business models for German Aerospace Centre Development and implementation of risk management solutions at

Bundesamt für Bauwesen und Raumordnung

Supervision of the first federal PPP pilot project on the public real estateSupervision of the first federal PPP pilot project on the public real estate sector in Germany “Fürst-Wrede-Barracks München”, client: g.e.b.b. mbH Development of business models for 28 schools of city Gera

Development of project structures and advising the awarding process of theDevelopment of project structures and advising the awarding process of the PPP project „building and operation of a sports centre at Berlin Bestensee“ Development of business models PPP-Project „Building and operation of a

seminar centre” client: Ruhr-University Bochum“

(7)

Agenda

General understanding of PPP

Developments of PPP in Germany

à Tenderinge de g

(8)

The Solution: Another Definition of PPP ?

Trying to define PPP ...

is a bit like

y g o

... is a bit like

to nail

... to nail

jelly

to the wall

(9)

The Problem

¾

PPP is a very heterogeneous and unspecific term in practice and in

scientific literature

scientific literature.

¾

confusion in international discussions

¾

Perceptions may span from:

¾

the integration of private ideas and experts in public structures

to complete withdrawal of the public sector from the

responsibility for public infrastructure

p

y

p

¾

or from a very specific contract model that clearly rules the

partnership to a very unspecific, global, somehow organised

cooperation between the public sector and the private sector

¾

Comparisons of international best practice and/or benchmarking

are difficult especially in a scientific context

(10)

General Understanding of PPP

New Public Management Formal Privatisation/Outsourcing

• efficiency gains through appropriate sharing of

tasks and responsibilites

- public: sovereign tasks - private: implementation

P

• Risk sharing and incentive structures

- private: implementation

isation

P

• private Investment and Life Cycle approach

• longterm contractual relationship

Privat

I

ti

th

h O t

t S

ifi

ti

- shareholders agreement (public- private SPC)

- concession agreement (private Entity)

full (100%) substantive Privatisation

• Innovation through Output Specification

(11)

Sub-Sectors of PREM and IM

Public Real Estates

S

l /Di

l

T

i

Supply/Disposal

Transportation

g

y

G ti a s, e at Airports

r

Administration

Education

• City halls _{• Kindergartens}

Ener

g

Generation, Transmission Power, G a Central h e

Ai

r

Transportation Other systems Roads (net), City halls • Ministry buildings • other plc. buildings Kindergartens • Schools • Universities, … Roads (net), Bridges,Tunnels, Service stations Transportation

Roads

n

king water, _astewater _reatment

Generation, Treatment, Distribution, S

W

ater

Health

• Hospitals

• Old peoples homes

Security

• Police buildings • Prisons

s

te

Removal, Disposal, p Other systems

c

ks

Tracks (net) Stations Dri n W a _tr Sewers

W

_{• Old peoples homes}

• Sanatoriums, ...

• Prisons • Defence ...

Culture

Defence

le- m.

Fixed nets,

Wa

s

p , Treatment

Tr

a

c

Stations Transportation Other systems W t ( t)

Culture

Defence

• Barracks • Educational Centres • Administration • Museums • Theatres etc.

...

Te

l

Co

Mobile nets Water (net), Harbours

Wa

te

r

Transportation Other systems

Sports / Leisure

• Administration

Others

• Sports arenas P bli l

Other systems

• Faire Areas

(12)

Typical PPP structure

P bli A th it Public Authority as Principal Public PPP contract/concession Sponsors = Equity Provider (5-30%) SPC –

Special Purpose Company

Shareholders Agreement

Private

Revenues _Customers/

Users Special Purpose Company

C t ti Loan Agreement S i Banks = Debt Provider (> 70%) Users Construction Contract Service Agreements Operator (e.g. Facilities Contractor Management)

(13)

Success factors for PPP

political and economical stability of the project country

appropriate legal framework and working legal system

( f bilit f t t l l i )

(e.g. enforceability of contractual claims)

technical, economical and financial feasibility of the project

Well balanced, efficient and clear risk allocationWell balanced, efficient and clear risk allocation

thorough and exhaustive preparation of the project

competent and efficient contract partners (in technical, economical,

fi i l d t t l t )

financial and contractual aspects)

Political support and broad acceptance of the project and PPP Model

high purchasing power (people must be capable to pay required user charges)

functioning capital market in the country

appropriate and transparent tender and award procedures

sufficient and fair competition

efficient instruments for evaluating and controlling of works and performance

(14)

Optimal risk allocation

Golden Rule:

Efficiency

Golden Rule:

„Each party should assume those risks it can evaluate and manage best to achieve an economically optimized result!“

Optimal private

economically optimized result!

Traditional procurement p p procurement p Ri k t f

Traditional Optimal private Too much _{Risk transfer} Traditional procurement Optimal private procurement Too much risk transferred

(15)

Determinants of the overall scheme

Financing of the Sector:

Rules of the Sub-Sector:

General Determinants:

g

- Budget Financing

- User Financing (e.g. toll, ticketing fees etc.)

u es o t e Sub Secto

- Public Real Estate - Infrastructure

Project Type:

- green field

Type of Works:

- new Construction

Type of Asset:

- single building

Determinants of the Organisational Model:

- brown field - extension/widening

- rehabilitation/modernisation - bundle or network

- etc.

Determinants of the Organisational Model:

Aim of Partnership:

- Urban Development

Contract Model:

- BROT~

Partnership Model:

- vertikal

Business Model:

Urban Development - Public Real Estate and

Infrastructure Management - DBFO~ - BOT~ - etc. vertikal - horizontal - Availability Payments - Shadow Tolls - Active Management~ di t U F ( l t ll )

Financing Model:

- forfeiting Model project finance

Privatisation Model:

- formal - functional

- direct User Fees (real tolls) - etc.

- project finance - etc.

functional - material

(16)

Urban development versus public services provision

PPPs are used in:

P bli R

l E t t

d

Urban Development

Public Real Estate and

Infrastructure Management

Efficient use of public land/buildings and private capital/ideas for:

the social economical architect ral etc

Efficient provision of public services

through delegation/outsourcing of - the social, economical, architectural etc.

development of urban areas (public interest) - business development (private interest)

typical developer (no service) approach

appropriate parts of it to the private sector

- typical developer (no service) approach - investment (no life cycle) approach

Value added: Value added: efficiency gains in

new assets for urban development

y g the provision of public services

Main focus of the German

business approach

(17)

User versus Budget Financed PPPs

Public Partner:

develops idea, structures project, defines procurement method, tenders project, supervises and controls service performance

according to his or the users needs

Private partner:

designs, builds, finances, maintains/operates and eventually uses the facility according to contract regulationsg g

and gets payments in form of: availability payments

(from public budget)

fees (from user with demand risks) for revenues generating facilities only

administration buildings, schools, prisons, hospitals, roads etc.

- transport and supply systems, etc..

(18)

Contractual and institutional Partnership

Institutional PPP

Contractual-PPP

Partial Privatisation

Public Partner Public Partner

PPP- (or other service) PPP (or other service)

Public

Partner I transferring shares _{of a public company}

to a private partner

pure private

Special Purpose Company

( )

contract

Mixed / Joint Venture

Special Purpose Company

( )

contract

p p

Mixed / Joint Venture

Special Purpose Company Spec a u pose Co pa y

(SPC)

as “assistant” of the

administration private share _{(Public Partner II)}public share

shareholder

Special Purpose Company

as “assistant” of the administration

p p p y

in competition at the open market

shareholder

public share (Public Partner II)

private share shareholder agreement shareholder agreement purchase of services „vertical Partnership“ purchase of services like contractual PPP purchase of services

PPP-Project contract e.g. as service contract

functional Privatisation _{but in addition:}

„horizontal Partnership“ shareholder agreement partial materiel privatisation

without or only with temporal

(19)

Financing Model - Project Finance

Project finance

No regress on public sector possible. The bank bears the full project risks and the risks of insolvency of the project company

the risks of insolvency of the project company

High financing costs: interest rates reflect full project risks; share of equity <=20%

High transaction costs: thorough risk analysis through bank

Optimal risk allocation

Mainly for big projects (~25% of current projects) because of high fix costs

Mainly for big projects ( 25% of current projects) because of high fix costs

Off-balance for public sector

Refinancing (payback) for structural engineering still through public sector; road projects could be financed through tolls

Principal Principal (Public Authority)

Payment for operation Principal-agent relationship

Agent

(Project company) Bank

Award of credit with securities

(20)

Financing Model - Forfeiting Models

Non-recourse forfeiting of installments (Forfaitierung mit Einredeverzicht)

The private partner sells its claims to the bank. These private claims towards the public partner arise out of the construction or renovation service. After the official

p p

acceptance of the construction work, the public partner guarantees the payment to the bank independent of the ability to pay of the private partner.

Low financing costs: public sector bears the risk after constructionLow financing costs: public sector bears the risk after construction Æ interest Æ interest rates are similarly low as public sector interest rates; equity can be lowered to 0%

Low transaction costs

Mainly for smaller projects (~75% of current projects)

On-balance for public sector

Remark: Construction companies should not be able to leave the project

Remark: Construction companies should not be able to leave the project completely after construction phase (incentive for life-cycle approach)

Principal-agent relationship Non-recourse agreement

G t d

Principal (Public Authority)

Agent Factoring Bank

Payment for operation Guaranteed

payment for debt service

(21)

Motivation for different approaches

Smaller projects Bundle projects

Small municipalities try to ti i t i PPP l ith

Reduced transaction and administration costs

Motivation

participate in PPP also with small investment needs

SMEs lobby for smaller projects and have strong

Higher investment needs in big cities

Achieve appropriate investment projects and have strong

local influence

pp p

value to implement project finance structures

Forfeiting Project finance

Motivation

lower costs of finance and less risk transfer

Risk transfer seems to be more efficient

Project could be designed Off-Motivation

Appropriate also for smaller projects

budget (in line with Eurostat)

Transfer of demand risk is feasible

(22)

Conclusions

¾

PPP is not only a financing model but a complex life cycle oriented

bli

t

h

public procurement scheme

¾

PPP has to be clearly delimited from other PSP and privatisation

d l

models

¾

internationally, various PPP schemes exist that may differ significantly

¾

a simple definition is not possible

¾

a scheme or grid of determinants helps for the neutral,

comprehensive and clear description of complex PPP and other

comparable private sector or privatisation schemes as a basis for any

effective and efficient evaluation and / or best practice comparison

(23)

Agenda

General understanding of PPP

Developments of PPP in Germany

à Tenderinge de g

(24)

Main drivers and objectives for PPPs in Germany

Efficiency improvements

Financial backlog

Optimize construction and

operating cost through leverage

Speed-up delivery of public infrastructure

y

p

g

operating cost through leverage of efficient private sector

Reduced lifecycle cost through b tt i k ll ti d

infrastructure

Public construction spending 2006 decreased by 1.2% to 18.2bn EUR

better risk allocation and performance incentives

Modernise public administration

Backlog of investment in road infrastructure (2004: 740m EUR spent; requirement: 2bn EUR p.a.)

P diti f bli b ildi _{through best practice of private}

sector

Poor condition of public buildings

Limit immediate financial burden on public sector

Government target:

Increase PPP share of overall public investment from 4% to 15%

(25)

Milestones in the History of PPP in Germany

1990: PPP started in water sewage but was not successful

1994: Trunk Road Private Financing Act (F-Model) but with only 2

P j t i l t d f

Projects implemented so far

Approval of first two Toll Ordinances for F-Modells

1999-2001 development of standard procurement documents for A-and F-model in the R&H sector

2002: Development of the A-Modell and introduction of HGV-Toll

2002: Foundation of the first German PPP Task Force in North-Rhine-2002: Foundation of the first German PPP Task Force in North Rhine Westphalia (guidelines, pilot-projects etc.)

2003: Federal Expert Report on “PPP in Real Estate” was basis for standardisation process and PPP Task Force on the federal level standardisation process and PPP Task Force on the federal level 2003 -2008: additional PPP Competence Centres on State Level

2005: PPP-Acceleration-Law on the basis of the recommendation in the Federal export report on PPP

Federal export report on PPP

2003-2008: First 100 PPP-Contracts signed in Social Infrastructure 2005-2008: Tender Procedures for 4 A-Models (3 Contracts signed) 2008: PPP-Simplification-Act (under preparation)

2008: PD (Partnerschaft Deutschland / Partnership Germany)

(26)

Institutions on Federal Level

F d ti f P t h ft D t hl d“ i t 2008

Foundation of „Partnerschaften Deutschland“ in autumn 2008

by Federal Ministry of Finance (BMF) and Federal Ministry of Transport, Construction and Urban development (BMVBS)

Public Private

Federal States Municipalities

Holding Federal States Municipalities

Managing Board

Advisory Board

à All sectors are covered

à Tasks:

à Consultancy services to projects,

à supporting standardisation processes

à supporting standardisation processes,

(27)

Federal PPP-Competence Network

F d l T k F ithi Mi i t f Federal Task Force within Ministry of Transport, Building and Urban

Development (BMVBS); Transport Infrastructure Financing Company (VIFG mbH)

Competence Centre within Investitionsbank Schleswig-Holstein Mecklenburg-Western Pomerania

Task force in the Ministry of Finance Platform in the Ministry of Economics PPP-Competence Center within

InvestitionsBank State of Brandenburg

Lower Saxony Brandenburg

z

North Rhine-Westphalia Saxony-Anhalt Saxony Th i i

PPP-Task Force within Ministry of Finance Working Group within Ministry of

B ildi T t

Task Force within Ministry of Finance

PPP-Kompetenzzentrum (Projektentwicklungsgesellschaft RLP) Thuringia Hesse Rhineland-Palatinate Building + Transport (Projektentwicklungsgesellschaft RLP) Saarland Bavaria Baden-Wü tt b

Task Force within the Ministry of Economics

Working Group in the State Ministry of Interior Affairs

Württemberg

(28)

Agenda

Current experiences from PPP projects

à Decision Making Process

à Tenderinge de g

à Applied Contract Models

Project Examples P bli R l E t t à Public Real Estate à Public Infrastructure

(29)

Decision Making Process

Phase I: Establish business needs and option appraisal

Need technical economic and financial feasibilityNeed, technical, economic and financial feasibility Selection of potential realisation concepts

PPP-Test

Ph

II P

ti

d

ti

Phase II: Preparation and conception

Development of the traditional procurement option (PSC)  Development of the PPP procurement optionp p p

Efficiency comparison (value for money test)

Phase III: Tendering and award

Preparation and execution of the prequalification  Negotiation procedure

Efficiency comparison (value for money test)

Phase IV: Implementation and contract management

Contract award and closing the deal

Phase V: Termination of Contract

(e g handing over or reuse of asset)

Monitoring the contract

Performance control and auditing

(30)

Duration of the tender and negotiation phase (social infrst.)

Offenbach West _{30 Months}

Offenbach Ost Monheim 34 Months in total Mai 6 Mon. Rhein-Erft-Kreis Gütersloh 8 Months 7 Mon. Gladbeck Cologne _{10 Months} 8 Months Leverkusen 10 Months 10 Months Schwarzenbek _{12 Months} Schwarzenbek _{12 Months} Frankfurt _{17 Months}

Jan. 2002 Jan. 2003 Jan. 2004 Jan. 2005 Jan. 2006 Jan. 2007

(31)

Duration of the tender and negotiation phase

(transport infrst.) F Model F-Model Warnowtunnel 23 Months F-Model Herrentunnel 25 Months A-Model BAB A8 BY 30 Months A-Model 30 Months BAB A4 TH 30 Months A-Model BAB A5 BW 42 Months A-Model BAB A1 NI 36 Months Oct 2007 Oct 2008 Oct 2003 Oct 2004 Oct 2005 Oct 2006 Oct 1994 Oct 1995 Oct 1996 Oct 1997 Oct 1998 2003 2004 2005 2006 2007 2008 1994 1995 1996 1997 1998

(32)

PPP Contract Models (the German example)

I PPP- Erwerbermodell

PPP Purchaser Model

(BROT)

M i diff

PPP- Purchaser Model (BROT)

II PPP-FM Leasingmodell

PPP-FM Leasing Model (BLOT/M)

Main differences:

transfer and / or status of

IV PPP Inhabermodell

III PPP-Vermietungsmodell

PPP-Renting Model

(BROM)

- transfer and / or status of

- ownership or ownership equivalent rights, at any time of the contract period

V PPP- Contracting Modell

IV PPP-Inhabermodell

PPP-Owner-Model (DBFOT)

the contract period

- exploitation / marketing risks

(at the end of the contract period)

g

PPP-Contracting Model

VI PPP-Konzessionsmodell

PPP-Concession Model (BOT)

VII PPP-Gesellschaftsmodell

PPP J i t V

t

M d l

- budget~ / user financing

- mixed legal status of SPC

PPP-Joint Venture Model

mixed legal status of SPC

M d l VI

d VII

b

bi

d

ith th

th

d l

(33)

Agenda

à Tenderinge de g

à Applied Contract Models Project Examples

P bli R l E t t

à Public Real Estate

à Public Infrastructure

(34)

PPP in Defence Sector

Project Fürst Wrede Barracks in Munich

Volume Approx. 48 million Euro Investment (entire Project Volume 164 million) Status quo / Procurement is done.

Status quo /

Outlook _{Winning bidder: HOCHTIEF PPP Solutions (2008)}

Contact Federal Ministry of Defence, Mr Lorkowski, Government Official email: franklorkowski@bmvg bund400 de

email: franklorkowski@bmvg.bund400.de

(35)

PPP in Defence Sector

Project Fürst Wrede Barracks in Munich

Location North of the regional capital Munich, Bavaria

The authority needs to reconstruct/redevelop accommodation facilities as well as to redevelop the remaining property

as well as to redevelop the remaining property.

The premises will be exclusively used by the German Federal Armed Forces in future.

The Federal government will remain owner of property.

Action: Planning, construction, financing and operation

Utilisation: Administrative building (military police army command IV Description

Utilisation: Administrative building (military police, army command IV, accommodation building and further smaller offices)

Schedule / milestones:

G l d i i 27 O t b 04

General decision: 27. October 04

Start of contract awarding procedure: 21 August 06

Start of contract : 1Start of contract : 1 quarter 2008th quarter 2008

Start of utilisation: partial operation continues, total operation 4th quarter 2009

(36)

Schools in Offenbach (Los Ost)

Project informations:

• the project include the redevelopement, operating and financing of 50 schools including their outside facilitiesg

• the contract duration is15 years Æ after contract termination the schools are reverted to the contracting authority

• the investment volume is EUR 100 million and the whole size of account is EUR

authority:

• the investment volume is EUR 100 million and the whole size of account is EUR 410 million authority: Kreis Offenbach Partnership agreement SPV: Hochtief PPP Schulpartner GmbH Hochtief PPP Solutions GmbH (47.45%), Creditor: Westdeutsche ImmobilienBank, Landesbank Hessen-Thüringen Financing contract

Hochtief Facility Management GmbH(47.45%), Kreis Offenbach ( 5.1%)

g

Facility Management contract Planning and construction

contract

Facility Management:

Hochtief Facility Management GmbH

contract

Construction:

Hochtief Construction AG

(37)

Examples of PPP on road sector

Federal Highways and Federal roads

Realisation of two F-models (Rostock, Lübeck) ~ 395 mn €

W C i R t k (t l) 220 €

à Warnow Crossing Rostock (tunnel) ~ 220 mn € Status: awarded 1996, open to traffic 2003

à Trave Crossing Lübeck (tunnel) ~ 175 mn € St t d d 1999 t t ffi 2005

Status: awarded 1999, open to traffic 2005

Realisation/Tender of 4 A-models ~ 950 mn €

à BAB A8 Munich-Augsburg

Status: awarded 2007, under construction ~ 230 mn €

à BAB A4 Bypass of the Hörselberge

à BAB A1 Hamburg – BremenBAB A1 Hamburg Bremen

Status: to be awarded soon ~ 300 mn €

à BAB A5 Baden Baden – Offenburg

Status: preferred Bidders designated ~ 250 mn € Status: preferred Bidders designated 250 mn €

(38)

Main Differences between A- and F-Model

Criteria

F-Model

A-Model

Type of

yp

30 year concession starting_{ith th b} _i _i _f _ti 30 year concession starting_{ith it i} _{t ll ti}

Contract

with the beginning of operation new construction, maintenance,

operation and finance of

- bridges, tunnels, mountain passes

ltil f d l

with site installation

- widening of “Autobahn” sections from e.g. 4 to 6 lanes

- maintenance/operation of new and existing lanes

Legal basis

FStrPrivFinG

(T k R d C t ti

no special law required

- multilane federal expressways and existing lanes

- finance

(Trunk Roads Construction Private Financing Act)

Principal

Municipality or Federal Government

Status of the

C

i

transfer of tasks, rights by grant law, legal act or ordinance

assistant of the administration acting by order/ on behalf of

p

Federal Government (and State) and Federal State

Concessionaire

_{acting quite independent} _{the administration}g y

Revenues/

Subsidy (up to 20% of investment) Subsidy (up to 50% of investment)

Toll from all vehicles: Toll from lorries only:

Sources of

Finance

Toll from all vehicles:

- collected by the concessionaire - to whom the right is granted

- regulated by toll ordinance, BMVBS on request by the concessionaire

Toll from lorries only:

- collected by independent operator - received by government

- regulated by toll ordinance, BMVBS - independent of A-Model concessions

(39)

Examples of PPP on road sector

State roads

3 design, build, maintain-contracts (“Funktionsbauvertrag”) in Bavaria

Ai t B E t M i h

à Airport Bypass East Munich

à Bypass Miltenberg

St t d d 2005 d t ti 39 €

à Main Bridge and Bypass Bergrheinfeld (part IV)

build & maintain of State roads in County of Saale-Holzland in Thuringia

à Part of the state road network in the of County Saale-Holzland Status: awarded 2007, under construction ~ 20 mn €

(40)

Examples

of PPP on road sector

County roads and municipality roads (abstract) awarded

New construction maintenance operation and finance New construction, maintenance, operation and finance of road section Harsewinkel in North-Rhine-Westfalia

Status: awarded 2007, under traffic ~ 2.5 mn €

in tender process

Heavy maintenance (and finance) of the network of the county roads of the C t Li i N th Rhi W tf li

County Lippe in North-Rhine-Westfalia

Status: Award expected Mai 2009 ~ 100-125 mn € (project volume)

After some initial difficulties, PPP in the sector of federal highways After some initial difficulties, PPP in the sector of federal highways seems to be picking up

Good experiences with PPP in the field of social infrastructure are leading to the implementation of PPP on roads subordinate to federal seems to be picking up

Good experiences with PPP in the field of social infrastructure are leading to the implementation of PPP on roads subordinate to federal highways

highways

(41)

Thank you for your attention

Hans Wilhelm Alfen

General Manager Details Alfen Consult GmbH Lisztstraße 4 99423 Weimar Telefon +49 (0) 3643.77129.0 Telefax +49 (0) 3643.77129.22 www.alfen-consult.de wilhelm.alfen@alfen-consult.de www.alfen consult.de info@alfen-consult.de Michael Korn

Michael Frank Michael Korn

Head of Infrastructure

Michael Frank

Head of Real Estate

michael.korn@alfen-consult.de michael.frank@alfen-consult.de

Public Private Partnerships

CENTRAL EUROPE Project ACT4PPP

The Company

Our PPP - Activities

Business fields

Construction

Real Estate Cross Disciplinary Subjects

Selected References

• Consulting on Risk

- PPP schools in Meschede (2003/04) - PPP bridges in Frankfurt (2006)

Company profile – Our Experts

Longtime experience in consulting public authorities at project

Dipl. Ing. M.Sc. Michael Frank

Agenda

The Solution: Another Definition of PPP ?

scientific literature.

partnership to a very unspecific, global, somehow organised

General Understanding of PPP

• longterm contractual relationship

Education

Generation, Treatment, Distribution, S

Health

• Old peoples homes

Security

• Sanatoriums, ...

Culture

• Faire Areas

Typical PPP structure

Private

Success factors for PPP

financial and contractual aspects)

Optimal risk allocation

Golden Rule:

Determinants of the overall scheme

Determinants of the Organisational Model:

Urban development versus public services provision

Efficient use of public land/buildings and private capital/ideas for:

Value added: Value added: efficiency gains in

Main focus of the German

Private partner:

Contractual and institutional Partnership

Public Partner Public Partner

Special Purpose Company

Financing Model - Project Finance

Financing Model - Forfeiting Models

Motivation for different approaches

Smaller projects Bundle projects

Forfeiting Project finance

Conclusions

a simple definition is not possible

Agenda

Main drivers and objectives for PPPs in Germany

Government target:

Institutions on Federal Level

Foundation of „Partnerschaften Deutschland“ in autumn 2008

Federal PPP-Competence Network

F d l T k F ithi Mi i t f Federal Task Force within Ministry of Transport, Building and Urban

PPP-Task Force within Ministry of Finance Working Group within Ministry of

Agenda

Decision Making Process

 PPP-Test

Phase II: Preparation and conception

 Efficiency comparison (value for money test)

Phase III: Tendering and award

 Efficiency comparison (value for money test)

Phase IV: Implementation and contract management

Duration of the tender and negotiation phase

III PPP-Vermietungsmodell

VI PPP-Konzessionsmodell

Agenda

P bli R l E t t

PPP in Defence Sector

PPP in Defence Sector

Schools in Offenbach (Los Ost)

Project informations:

Facility Management:

Examples of PPP on road sector

Federal Highways and Federal roads

Main Differences between A- and F-Model

operation and finance of

PPP-Test

Efficiency comparison (value for money test)

Efficiency comparison (value for money test)