patricio mansilla - ppp in urban investment
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Economic Policy Reform and
Competitiveness Project
Attracting Private Investment for
Urban Infrastructure
Ulan Bator – Mongolia
June 11th, 2009
Economic Policy Reform and
Competitiveness Project
Agenda
1. Private Participation: Understanding the Concept
2. Private Investment in Urban Roads
3. Urban Infrastructure Development
4. Mongolian Urban Infrastructure Challenges
Economic Policy Reform and
Competitiveness Project
1. Private Participation:
Understanding the Concept
Economic Policy Reform and
Competitiveness Project
Why to use PPP?• Excess of demand for the facility, product or service, managed
by the public sector.
• Potential increase of demand in the short/medium run for the
facility, product or service.
• Low capacity of the public sector (lack of financial resources or
inefficiencies) to increase the level of investments to close the
excess of demand or to improve the performance/efficiency and
quality of the service.
• Fast way to reach Social Responsibility/ Accountability in the
allocation of resources and sustainability.
• Cost recovery and private sector financing.
• Creation of a new industry, new formal sector in the economy.
Employment, wealth and economic growth.
Economic Policy Reform and
Competitiveness Project
Several Ways of Partnership
Joint Venture
BOT
DBOT (DBFOT)
BOO
Partial
Divestiture
Leasing
Operation and
Management
Contracts
PPP
Economic Policy Reform and
Competitiveness Project
2. Private Investment in Urban
Roads
Economic Policy Reform and
Competitiveness Project
Chile• The Concession Law establish that the Ministry of
Public Works is the public agency in charge of theconcession of public works process.
• Establish clearly the mechanism and requirements tosubmit unsolicited proposals
• Procurement procedures and bidding variables areclearly specifies.
• Encourage a competitive biding process
• Rights and obligations of the concessionarie
• Conflict resolution procedures
• Causes of contract suspension and extinction
Economic Policy Reform and
Competitiveness Project
Chile
Economic Policy Reform and
Competitiveness Project
Santiago in the Nineties
Population: 5 million
10,3 Million of trips per day
65%: Public Transportation
35% : Private Transportation
Economic Development
Rate Growth: 6% annually
135 cars / 1000 persons
Lack of Public Investment
Transport System with huge operation problems
Economic Policy Reform and
Competitiveness Project
Santiago Infrastructure Plan
• Public Transportation Modernization
• Enlargement of the Metro System
• Enlargement of Suburban Trains
• PPP for the main urban roads
• Economic regulation for the private transportation
• Enhancement of the local transportation
infrastructure
• Traffic control system improvement
Economic Policy Reform and
Competitiveness Project
PPP Urban Roads in Santiago-Chile
1. Costanera North Highway
2. North-South System
3. Américo Vespucio South
4. Américo Vespucio North
5. Radial NorOrient
6. South Urban Segment
R-57
R-5 Sur
R-68
R-78
R-68
R-78
R-5 Sur
Economic Policy Reform and
Competitiveness Project
• Three tariffs:
Valley US$ 0,05/km
Peak US$ 0,06/km
Congestion US$0,12/km
• Tariff adjustment RPI + 3,5% annually.
• Concessionaire can do
tariff management.
Santiago Infrastructure Plan
2T
3T
1T
Economic Policy Reform and
Competitiveness Project
• Concession Period: 30 years
• Bidding Mechanism:
• Tramo 1: “Payment for goods and rights (BD)"
Payment by the sponsor of the concessionaire before to
create the concessionaire company.
• Tramo 2: Investment Plan
• Tramo 3: Payment from the Government
Bidding Mechanism
Economic Policy Reform and
Competitiveness Project
Urban Road Concession: East-West
Urban SystemResults
•Investments: US$385 million
•Lenght: 42 kilometers
•Reduce gas emission
•Reduce contamination
•Reduce congestion
•Reduce travel time from Las
Condes to the Santiago Airport
•Implementation of the electronic toll road system “free flow” which let to the
users go through the road without stop to pay tolls.
•The number of accidents in the road is very low and it reach 8 in average per
month.
Economic Policy Reform and
Competitiveness Project
Economic Policy Reform and
Competitiveness Project
Economic Policy Reform and
Competitiveness ProjectLos Proyectos – Sistema Oriente - Poniente
Economic Policy Reform and
Competitiveness Project
Economic Policy Reform and
Competitiveness Project
Urban Roads Bidding Results
Economic Policy Reform and
Competitiveness Project
3. Urban Infrastructure
Development
Economic Policy Reform and
Competitiveness Project
21
Urban PPP Projects in Chile
Economic Policy Reform and
Competitiveness Project
Urban PPP Projects in Chile
Economic Policy Reform and
Competitiveness Project
23
Inkosi Albert Luthuli Hospital
23
Value to government: R4.5 billion
Signed: Dec 2001
Term: 15 years
BEE: equity 40%; subcontracting 40%
Economic Policy Reform and
Competitiveness Project
24
Montería Water PPP: The
first Water PPP in
ColombiaMONTERIA – year 2000
• Population: 300,000 (80% Low Income)
• Water production: 600 lps.
• Non revenue water: 55 %
• Metering: 0.7 %
• Revenues: $4 M
• Water Coverage: 70 %
• Connections: 36,500
• Sewerage Coverage: 30 %
• Connections: 14,600
• Capital investments: $70-80 mill
Bogota
Montería
PANAMA
VENEZUELA
BRASIL
PERU
ECUADOR
COLOMBIA
Economic Policy Reform and
Competitiveness Project
4. Mongolian Urban Infrastructure
Challenges
Economic Policy Reform and
Competitiveness Project
Energy CHP5 PPP ProjectHeating demand is expected for increase by 1000 GCal and electricity demand- by 700 MW
by 2020.
First stage, requirement to construct and operate first unit of Co-generating Heating Plant #5
(CHP- 5) in Ulaanbaatar with heating capacity of 700 GCal and generating electricity 300 MW
is faced by 2012.
International Competitive Bid was announced for procurement of Ulaanbaatar CHP-5 by
former Ministry of Fuel and Energy on August 01, 2008, requesting from Bidders to submit
proposals to construct and operate coal fired CHP with terms of IPP or BOT or BOO including
Feasibility Study, Environmental assessment and Design Drawings.
The technical proposal was opened on January 15, 2009. In spite of 26 Bidders were
expressed their interest to participate in this Bid, only one Bidder- China Datang Corporation
submitted it’s proposal.
The Bid Evaluation Committee, appointed by the Ministry of Mineral Resources and Energy is
working on the selection of the Bid proposal. On evaluation of technical proposal, the
financial proposal of the Bidder was opened on April 20, 2009. Decision from the Bid
Evaluation Committee is not yet issued at this moment.
Economic Policy Reform and
Competitiveness Project
Mongolia Challenges
• Urban Roads Infrastructure
• Energy Infrastructure
• Parking Infrastructure
• Public Buildings
• Water System
• Waste Management and Infrastructure
• Jails
Economic Policy Reform and
Competitiveness Project
Parking PPP Infrastructure