Roads & Highway PPP (P3) Toolkit World Bank

1Thillainath Chelliah (TC)- Sr Highway SpecialistEnergy Transportation Water Department (ETWTR)

http://www.ppiaf.org/documents/toolkits/highwaystoolkit/

Toolkit for Public-Private

Partnership in Roads &

HighwaysIRF Seminar

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Cairo12/13 October 2009



Toolkit overview and features

Enabling environment for PPP

PPP Policy Framework

Project preparation for PPP

Financial model for project evaluation

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Reference manual for PPP

Toolkit complements existing information sources, rather than competes with them

“Fills the gaps” to provide a comprehensive manual for PPP development

Provides for an adapted approach to PPP: descriptive not proscriptive

Self-contained on CD-ROM and internet: http://www.ppiaf.org/documents/toolkits/highwaystoolkit/index.html

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http://www.ppiaf.org/documents/toolkits/highwaystoolkit/index.html



Content of Toolkit

Six Modules: core subjects

Additional Tools: site map, glossary & abbreviations, search, feedback



Objective of the Toolkit

“ to assist transport sector policy makers in the Bank’s client countries in implementing procedures to promote private sector participation and financing in the development of their road and highway sector.

The toolkit will serve as a manual for World Bank clients and Bank staff when they recommend and implement processes to increase or to introduce private sector participation in road and highway development ”

Supported by Public-Private Infrastructure Advisory Facility (PPIAF)



Use of toolkit

Complete manual for PPP policy and development: a focal point for World Bank staff and public sector clients

Assists in each stage of PPP preparation by defining objectives and components (“terms of reference” for consultants)

Describes the PPP framework necessary to develop private sector interest

Presents “most applicable practices” comprising both latest examples and those most suited to developing countries

Allows inexperienced practitioners to understand PPP



Toolkit case studiesBrazil – country case study

Chile – urban highway

concessions in Santiago

Croatia – A6 motorway

France – country case study

Hungary - M1/M15 motorway

India – country case study

Indonesia – country case

study

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Korea – country case study

Serbia – country case study

(PBC contracts)

South Africa / Mozambique –

N4 toll road

UK – M6 toll road

US – country case study

Zambia – country case study

(PBC contracts)








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Why enable PPPs?

90% of investment in PPP since 1990 has been

concentrated in only 10 countries

117 developing countries did not receive any private

investment at all in the highway sector.

Source: World Bank/PPIAF PPI database (1990-2006)

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http://www.ppiaf.org/documents/toolkits/highwaystoolkit/ 10

There is wide acceptance that the role of PPP is to

complement rather than replace conventional public sector

procurement. PPP cannot pretend to represent the best

solution for numerous low volume roads and local contracts

implemented at local and regional level in developing and

even industrialized countries. To attempt to do so would be

counter-productive to efforts to develop PPP on a national

scale.

Application of PPP












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PPP Policy Frameworks A specific PPP policy framework would include;

The legal and regulatory framework,

Procurement guidelines,

Model PPP contracts, and

Risk Management Framework,

Financial guidelines (Tariffs, payments and Government

support),

The Project Cycle and the role of Advisors,

Technical design and service standards,

Institutional and Approvals Framework (Including Dispute

resolution mechanisms).

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Technical and Performance Standards

According to ISO, the International Standards Organization, "standards are documented agreements containing technical specifications or other precise criteria to be used consistently such as rules, guidelines, or definitions of characteristics, to ensure that materials, products, processes and services are fit for their purpose".

Setting up an appropriate set of standards relative to the various sectors of the economy, under the authority of the public powers, is a necessity for any modern country.

The standards to be used should be listed in highway contracts

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Procurement procedures

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Introduction Purpose

Familiarization of non-financial users with the basics of project finance and financial simulations for a highway PPP project

Better understanding of key parameters which affect the financial viability of a highway project

Limits

Simplified financial models not suitable for the detailed and specific project assessment

Public authorities would need to apply more developed models available with experienced financial practitioners in order to analyse potential PPP projects during project preparation and transaction



Financial model of the Toolkit - graphical



Financial model of the Toolkit - numerical



Financing Trends

Up to 2008 Growth in PPPs being financed Infrastructure Funds set up Low Real Interest rates High Debt/Equity Relatively easy Syndication

Transition-End 2008 and Onwards Difficult Syndication Higher margins and Fees Bond Market Dormant Major devaluations Tenor reduced More Risk averse lending Higher equity stakes



The Toolkit is available:

Website


CD Rom

Download available in “toolkit files” (ISO file)

Can be copied to hard-drive, USB key..




Contacts World Bank:

Thillainath Chelliah (TC): [email protected]

Cesar Queiroz: [email protected]

PPIAF:

Clemencia Torres de Mästle: [email protected]

EGIS toolkit team (presenters):

Ian Jennings (Project Coordinator/Highway Engineer): [email protected]

Robert Brown (Team leader/PPP Specialist):[email protected]

Philippe Dewast (Legal Specialist): [email protected]

Project office : EGIS BCEOM International, Guyancourt, France

Tel: +33 1 30 12 49 69 / Fax: +33 1 30 60 04 89



Thank you

Documents

Roads & Highway PPP (P3) Toolkit World Bank