Grandi Grandi StazioniStazioni

PPP in Railway StationsPPP in Railway Stations

Prague 17 March Prague 17 March 20042004

Grandi Stazioni

BACKGROUND

European Scenario Key Drivers

o Pan-European trend on introducing new organization and management model in Public Companies operating railway transportation

o Focus on reducing State budget burden

o Achieve/increase rentability of operation and management effectiveness

o Preparing for opening domestic market to competitors

Ferrovie dello Stato Milestone

Assignment of assets’ ownership from the State to FS-1990: FS SpA

Assignment of assets to operative Companies- Mid ’90s FS Group

1985 FS: Public Body

Core and “not Core” assets and activities identification - End ’90s dismissions and PPP creation

Ferrovie dello Stato Stations Management

Grandi Stazioni is the company established by Ferrovie dello Stato to refurbish and manage the 13 major

Italian railway stations

Grandi Stazioni Who is Grandi Stazioni

Grandi Stazioni

GRANDI STAZIONI AND THE PPP MODEL

PPP is a mean to increase the PPP is a mean to increase the potential of being successful in potential of being successful in implementing a “public-funded” implementing a “public-funded”

project where investing in a public project where investing in a public assets could match profitable assets could match profitable

operationoperation

Grandi Stazioni and the PPP Model The PPP Model

Refurbishment of stations: Refurbishment of stations: “public -funded “project“public -funded “project

Stations: public assetsStations: public assets

Commercial exploitation of Commercial exploitation of stations: profitable operationstations: profitable operation

Grandi Stazioni and the PPP Model The Assets

– A clear base and long-term A clear base and long-term strategy set by the public strategy set by the public partner partner

– A clear identification of roles A clear identification of roles between the two (Public and between the two (Public and Private) partnersPrivate) partners

Grandi Stazioni and the PPP Model Key Elements of the PPP

A tailor-made contract between A tailor-made contract between the partiesthe parties

o planning and design o project and construction managemento management of the spaceso management of the advertisement assetso management of the technical services

Scope: Integrated management of 13 major Italian railway station

Investment financing:o Public Partner: extraordinary maintenance and restructuring works

required by technical regulations in forceo Private Partner: upgrading and functional works aimed at

improving usability and commercial value of the complexes

Duration: 40 years

Grandi Stazioni and the PPP Model Long Term Strategy and Identification of Roles

Revenues:o FS: Minimum guaranteed + variable amount linked to GS actual

revenues

In order to be successful a PPP-In order to be successful a PPP-Model should rely on a Private Model should rely on a Private partner capable of bringing in partner capable of bringing in

added value in terms of know-how, added value in terms of know-how, business expertise, and standingbusiness expertise, and standing

Grandi Stazioni and the PPP Model Critical Factors for Success

The right partnershipThe right partnership

60 %60 %

Vianini Lavori S.p.A.

Caltagirone Group

31.67 %

Edizione Holding S.p.A.

Benetton Group31.67 %

31.67 % Pirelli & C. Pirelli Group

S.N.C.F. Partecipations S.A.5.00 %

40 %40 %

Grandi Stazioni and the PPP Model The Partners

Grandi Stazioni and the PPP Model Opportunity for the Public Partner

Being supported by a private partner with a strong expertise in developing and operating such business

Diverting human resources and financial flows to core business activities

Maximize value of the contributed assets

Construction Works

Asset ManagementPirelli Group

Benetton Group

Caltagirone Group

Retail

Private Shareholders

Expertise

Media/Real EstateAsset/Facility/Property Management

Level 2 Secondary services

Level 1 Primary services

Retail Advertising Travel services Office rent, hotels Tobacco / press point Food & Beverages Car rental services Other

Ticket counters

Travel information

Maintenance of tracks and rolling stock

Cleaning Safety Maintenance of building Trolley services Toilettes Waiting lounge

Grandi Stazioni and the PPP Model Splitting of Responsibilities

Grandi Stazioni and the PPP Model Results for Ferrovie dello Stato

IncreasedIncreased valuevalue in in real estate assetsreal estate assets

IImproved mproved servicesservices toto the customer base and the the customer base and the non travelersnon travelers

ImprovedImproved public public opinionopinion imageimage

ProfitsProfits from from operationsoperations

20012001( Figures in M€ )( Figures in M€ )

20022002( Figures in M€ )( Figures in M€ )

20032003(Figures in M€)(Figures in M€)

Turnover 127127 138138 138138

Operating Costs 106106 115115 107107

EBITDA 2424 2828 3131

EBIT 2525 2727 2323

Grandi Stazioni and the PPP Model Results for Grandi Stazioni