norwegian experience with highway concessions - … experience with highway concessions ... case...
TRANSCRIPT
08.10.03
Norwegian Experience with Highway Concessions
2nd Workshop on Applied Infrastructure Research
Dr. Ansgar Bendiek, Head of Infrastructure and MaritimeHSH Nordbank, Hamburg, Germany
Case Study
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Content.The Norwegian Road Program
– Decision Making Process
– PPP - Road Projects
E39 Klett-Bårdshaug: Project Description
– Map
– Scope of work
– Main Elements
– Project Contracts
– Scope of Work
E 39 Klett-Bardshaug: Financing
– General terms
– Structure
– Tenor & Repayment
– Security & Guarantees
– Risk Allocation
Timetable
Outlook
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Decision Making ProcessThe NorwegianRoad Program
Decision in the Storting to test the PPP concept
– Autumn 1998: The Storting asks the Government to propose road projects to test the PPP concept
National Transport Program
– February 2001: The Storting approves three road projects. Aims to test efficiency and effectiveness in achieving political objectives through the PPP model.
E39 Klett – Bårdshaug
– June 2001: The Storting approves the financing of new E39 Øysand – Thamshamn, partly financed by tolling, and asks the Vegdirektoratet to procure E39 Klett – Bårdshaug as a PPP- project.
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PPP - Road Projects
E39 Klett – Bårdshaug, Sør-Trøndelag
– Financial Close and Construction start-up 04/2003. Completion 09/2005. Construction cost NOK 1.3 billion
E39 Lyngdal – Flekkefjord, Vest-Agder
– Indicative Bid 09/2003. Scheduled Financial Close and Construction Startup 04/2004. Construction cost NOK 0.8 – 1.1 billion.
E18 Kristiansand – Grimstad, Aust-Agder
– Pre-qualification 2003. Construction cost not defined.
The NorwegianRoad Program
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E 39 Klett- Bårdshaug: MapProject Desciption
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Scope of work
Engineering, Procurement and Construction: Øysand-Thamshamn 21.9 km. Approx. 2,5 year construction period. Cost NOK 1.3 billion.
Operation and Maintenance: Klett-Bårdshaug 26.9 km. Concession period 25 years.
Financing of construction and operating period.
Project Desciption
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Contractual Structure
Selmer Skanska AS Based on Statens Vegvesen Vegdirektoratet
Project Desciption
Vegdirektoratet
Orkdalsvegen
PPP Contract
Skanska BOT AB
Laing Roads
Debt LendersLoan
Repayment
Equity
Return
UsersToll Company
AP, MMP,TP, SP, and ERC
TollToll
The StortingMinistry of Transport Right to
collect tollAdditionalFunds
Fixed Price TurnKey Contract O&M Contract
ConstructionCompany
D&CContractor
O&MContractor
Three Party Agreement
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Project Parties
Tendering Authority: Statens Vegvesen
Vegdirektoratet
Sponsors
SPC
Lead Arrangers
Project Desciption
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Main Elements
Two lane highway.
7 tunnels, totalling
10.2 km.
4 main intersections.
Daily traffic:
– 7,900 AADT at
Øysand
– 5,600 at Thamshamn
Project Desciption
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Project Contracts
Concession Contract
– 25 years operation, plus 2.5 years construction
– Risks placed with party that can influence them
– No traffic risk
– Payment subject to completion
– Payment mechanism during operation linked to performance
– Handover to Vegdirektoratet at end of concession
Evaluation criteria: Net Present Value of future payments
Project Desciption
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Project Contracts
EPC Contract
– Fixed-price date-certain turn-key contract
– Back-to-back w/ concession (quality, dates, penalties, etc)
– Penalties for non-performance (delays etc)
O&M Contract
– Defined service level for 25 years
– Back-to-back w/ concession (services, penalties, reporting, etc.)
– Penalties for non-performance
Project Desciption
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Payment Mechanism
Concept
– Monthly/annual unitary payments being available for the SPC, butwith the actual level of payment being varied according to performance against a number of pre-defined criteria.
Five Elements– Availability Payments– Maintenance Monitoring Payments– Safety Payments– Traffic Payments– Early Repayment of Construction Cost
Project Desciption
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E 39 PPP Road - Scope of Work
Availability Payment
Toll Collection
Operation
Construction
DesignCandidate (SPV)Toll CollectorStorting
Legal Framework
Project Description
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General Terms
Borrower Orkdalsvegen AS
Sponsors Skanska BOT and Laing Roads
Facility NOK 1,414 million
Bank Syndicate HSH NordbankNordeaSvenska HandelsbankenDexiaIKBINGSEK
Financing
LeadArranger
Co-Arranger
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Structure
Combined construction and long-term facility:
Tranche A NOK 1,150 million
Tranche B - NIB tranche NOK 300 million
Total NOK 1,450 million
Financing
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Security & Guarantees
Security - Assignment of contracts and other rights - Pledge on SPC shares - Pledge on assets
Guarantees - D&C and O&M contract backed by Skanska AB
Reserve Accounts- 6 months DSRA- MMRA built up over 2 years in advance
Hedging - Interest fixing (swap) required
Financing
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E 39 PPP Road - Risk Allocation and Means of Mitigation
Force Majeure
Political Risks
Payment Risk
Financial Risks• Inflation• Interest / Currency Risks• Insolvency
Operational Risks
Construction Risks
Planning Risks
Geotechnical Risks
SharedSPVState
Financing
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Timetable E39 - I
15 January 2003 Appointment of preferred bidder
final negotiations, due diligence,documentation
7 April 2003 Financial Close
26 June 2003 Syndication Closed
April 2003 Construction start-up
September 2005 Road completion
Timetable
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Conclusion
Norway‘s first PPP project E39 I has successfully proven
– Interest from bidders ➭ availability of contractors
– strong support from banks ➭ availability of funds
– favorable terms and conditions ➭ competitive bidding
– sound risk allocation and sharing ➭ Public Private Partnership
groundbreaking reference for projects to follow!
Conclusion
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Outlook
Potential Scandinavian follow up projects
– Norway: • E18 Grimstad-Kristianssand (Motorway)• Sandnes-Stavanger, new double track railway
– Denmark:• Parking facility Ørestad, Copenhagen• Link across Roskilde Bay
– Finland:• E18 Tusken -Helsinki Motorway
Outlook
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Structured Corporate FinanceThe Infrastructure & Maritime Team
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Infrastructure & Maritime - The team and the market.
The Infrastructure and Maritime Team as part of the Structured Corporate Finance Division offers advisory and arranging services.
Our Market:
Infrastructure (Roads, Tunnels, Bridges et al)
Maritime infrastructure (Substructures, Container, Öl & Gas terminals)
PPP-projects (Schools, Hospitals, Prisons et al)
Utilities
Broadband cable market
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Dr. Ansgar Bendiek Tel. +49 (0)40 / 3333 13484Team head Fax +49 (0)40 / 3333 6 13484
e-Mail [email protected]
Maik Tschentschel Tel. +49 (0)40 / 3333 12584Fax +49 (0)40 / 3333 6 12584e-Mail [email protected]
Thorsten Lundius Tel. +49 (0)40 / 3333 10062 Senior Manager Fax +49 (0)40 / 3333 6 10062
e-Mail [email protected]
Matthias Meyer Tel. +49 (0)40 / 3333 12662Senior Manager Fax +49 (0)40 / 3333 6 12662
e-Mail [email protected]
Team Infrastructure & Maritime.
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Carl Augustin Tel. +49 (0)40 / 3333 14611Senior Manager Fax +49 (0)40 / 3333 6 14611
e-Mail [email protected]
Petra Hoefle Tel. +49 (0)40 / 3333 12789Manager Fax +49 (0)40 / 3333 6 12789
e-Mail [email protected]
Karen Raguse Tel. +49 (0)40 / 3333 13530 Junior Manager Fax +49 (0)40 / 3333 6 13530
e-Mail [email protected]
Phillip Staake Tel. +49 (0)40 / 3333 13250Assistance Fax +49 (0)40 / 3333 6 13250
e-Mail [email protected]
Team Infrastructure & Maritime.