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Mag. Martin Oder, LL.M.

OECD/SIGMAOECD/SIGMA

““Concessions and Public Private Partnerships”Concessions and Public Private Partnerships” Ankara, 10-11 March 2008Ankara, 10-11 March 2008

Case Studies from Technical Infrastructure Sectors -Case Studies from Technical Infrastructure Sectors -Highways SectorHighways Sector

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Case studyCase study – Highways – Highways

Austria: A5 Eastern region – concession model- Preparatory stage- Decision-making process- Scope and shape of project- Time schedule- Main procedural and contractual

issues

Preparatory stage – shaping of first road Preparatory stage – shaping of first road PPP project on political levelPPP project on political level

Working group on road infrastructure financing 2002 (Interest groups)

Ministry of Transport, Innovation and Technology – Steering Committee PPP 2003 (with help of external experts)

Discussion on most suitable model: IPP vs.

concession model

procurement law Scope of procurement

financing

accelerationrisk transfer

debt

Ministry of Transport – Steering Committee PPP Oct. 2003

CONCESSION MODEL

Resolution of the Council of Ministers Dec. 2003

Scope of projectScope of project

• First road PPP-project in Austria• Estimated construction costs € 800 m• Project size: too big in terms of seize

and value?• 4 EIA procedures for different parts of

road: different planning and approval status

• Financing issues: ASFINAG financing vs private financing

• Bankability

-

51 km motorway, 1 tunnel (2km)

Project leader

Infrastructureworking group

EconomicsFinancing

working group

Lawworking group

Ministry of Transport – MoF

Management board

of ASFINAG

Core technical planning team

OstregionAdvisors &

experts

Advisors & experts

Project setupProject setup

ASFINAGSupervisory board

Advisors & experts

Task sharing within the project teamTask sharing within the project team

Infrastructure Financial Law Functional output

specification for construction, operation, management and maintenance

Traffic forecasts as basis for revenue models

Concession model Risk allocation Risk valuation Business plans Revenue models Econ. planning tools Tender evaluation

Award procedure Concession contract Interface to BMVIT and

authorities

EXTERNAL CONSULTANTS

Interdisciplinary

Haslinger / Nagele & Partners

Doralt – Seist - Csoklich

KPMGTechnical consultants

DonauConsult, Zottl & Erber ZT GmbH

Project sProject structure – Concessiontructure – Concession model model

sponsors (equity)

lenders (debt)

Concessionaire(SPV)

planning & construction

maintainance & operation

Art of Association

Loanbond

subcontractors

concession contract

Republic of Austria

Direct

Agreemen

t

• Financing through debt (90%, loans and bonds, EIB & Dt Bank) and equity (10%)

• Remuneration upon completion and opening of road to traffic through cash-flows from project only

• Non-recourse project (no contingent liabilities on sponsors)

• Concession lifetime: ~33 years

• ASFiNAG: no stake in SPV, only monitoring and control function

• Fair risk allocation

Time scheduleTime schedule

May 05

Determination of „preferred bidder“: 8 months

Time limit for submission of bids:

6 monthsPreparation period: 12

months

- Planning, EIA procedures

- Conception of model: definition of project scope, determination of financing model, ......

- Preparation of prequalification documents (PQQ, project information brochure)

- Preparation of tender documents (esp technical output specifications, financial/business requirements, draft concession contract)

Negotiations with all three bidders

submission of requests to participate by candidates

Award decision

timeline (not according to scale)

financing documents by preferred bidder: 2 mo

Selection of 5 candidates

01.09.

01.12.

01.09.2005

2006

01.01. 2004

Application period

3 months

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Main issues during negotiationsMain issues during negotiations

Procedural issues- Alleged discriminatory effect of different financing solutions

(bond vs loan) on comparability of LAFO- Submission of complete financial documentation by preferred

bidder only and point of time of publication of award decision

Contractual issues- Changes in law and additional remuneration- Relief / force majeure events and their consequences - Payments in cases of early termination (bond vs loan)- State guarantees- Direct agreement financing with lenders, esp liabilities of

lenders upon step-in

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EU Thank you Thank you

for your attention!for your attention!Martin Oder

HASLINGER / NAGELE & PARTNERSAm Hof 13, A-1010 ViennaPhone +43/1/718 66 80-616

Fax +43/1/718 66 80-30email: office.wien@haslinger-nagele.com