Professional Documents
Culture Documents
Projects in Asia
Knowledge sharing event-Organized by TCoP Railways
Place
of presentation
here
and
PPP subtitle
and Innovative
Financing Advisory
Teams
16 October 2014
Takeshi Fukayama
Transport Specialist, CWTC
Introduction
Given public sector budget constraints/
cost of urban rail systems, PPP models
are seen as potential mechanisms to
incentivize private funding/improving
system operations.
This presentation focuses on 4 case
studies of urban rail PPP Projects in Asia,
and discusses the lessons.*
2
Contents
Background of Applying PPP Models
Framework/Case Study Overview
Case Studies
o Seoul (Metro Line9)
o Manila (MRT-3)
o Kuala Lumpur (STAR)
o Delhi (Airport Line)
Lessons/Implications to ADB
3
Background of Applying
PPP Models
20000
15000
South Asia
East Asia and Pacific
10000
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
5000
Typical Characteristics of
Urban Rail Project
Capital intensive/long term project
Lower tariff/less tariff escalation
High demand risk due to:
o Less conversion from other modes
o Less integration with other modes
o Insufficient urban planning/execution
Lender
Finance
Government/
Public Utility
Concession
agreement,
etc.
O&M
contract
SPC
EPC contract
Construction
Supplier
E&M
Supplier
Operator
Maintenance
Supplier
Seoul
Manila
Kuala Lumpur
Delhi
Line
Metro Line 9
MRT-3
STAR
Airport Line
Opened
2009
2000
1996
2011
Route extension
26km
17km
27km
19km
PPP scheme
BTO
BLT
BOO
BOT
Period of project
30 years
25 years
60 years
30 years
Investmentb$
1.6
0.7
0.9
1.2
Financial resources
Government
Equity
Debts
80%
7%
13%
0%
28%
72%
10%
10%
80%
50%
15%
35%
Partially
supplemented by
subsidy
Contract cancelled,
government took
over
Supplemented by
Viability
Gap
Funding(VGF)
Contract cancelled,
public corporation
took over
Supplemented by Burdened
by
Minimum revenue government
guarantee (MRG)
through lease
Transferred
to
Withdrawal
of
Exit from project
governmentmajor shareholder
affiliated institution
Revenue risk
hedging
11
BTO: Build-Transfer-Operate
BOO: Build-Own-Operate
BLTBuild-Lease-Transfer
BOT: Build-Operate-Transfer
Case Study 1
Seoul Metro Line 9
12
Transportation needs
o Car transportation rapidly grew in 1970-80s
o Mass Transit Plan under Mayor Lee Myung-bak
o Bus system revolution (2003)
PPI: Private Participation in Infrastructure
13
Line 1 Opened in
1974
14
Line 9 Opened in
2009 to connect
east-west of Seoul.
Lender
Finance
Seoul
Metropolitan
Government
Civil work
Construction
Supplier
15
BTO for 30
years with
MRG
SPC
Metro9
Operation for
10 years
Maintenance
Construction
Supplier
E&M Supplier
Hyundai Rotem, etc.
Operator
Seoul 9
Maint.
Supplier
Maintrance
Shareholder
Veolia 80%
Hyndai
Rotem 20%
Shareholder
Hyndai
Rotem 80%
Veolia 20%
What Happened
Output/outcome
o Efficient management and operation
o Expected return to shareholders
Risk materialized
o Announcement of a fare increase (2012)
o Criticism to MRG
Exit
o Macquarie to withdrawal (2013)
16
Case Study 2
Manila MRT-3
17
Transportation needs
o Traffic worsened from 1970s
o High density, high hazard risks
o Many transportation plans have been made
by JICA , World Bank, etc.
18
1
LRT-1 opened in
1985 using ODA
from Belgium; and
renewal
investments were
provided by ODA
from Japan.
19
3
MRT-3 opened in
2000 using a PPP
model. Alignment
is on EDSA.
Lender
Finance
DOTC
Operation
BLT for 25
years
(DOTC pays
ERP to SPC)
SPC
MRTC
Maintenance
Maintenance
Supplier
Sumitomo Corp
TESP(Affiliated
company of MHI)
What Happened
Output/outcome
o Continuously increased passengers
o Land development at stations
Risk materialized
o Insufficient capacity
o Low fare level
o Maintenance problems
Exit
o Original shareholders were taken over by the
government-related financial institutes
21
Case Study 3
Kuala Lumpur STAR
22
Transportation needs
o Road based -highways developed in 1990s
o Cheap gas price with subsidies
o KL urban plan indicated the needs for urban
rail (1984)
23
3
KL Monorail
opened in
2003.
1
STAR(Ampang
Line) opened
as the first
urban rail in
Kuara Lumpur
in 1996.
24
Lender
Finance
Government
of Malaysia
Concession
for 60 years
SPC
STAR
EPC contract
Construction Supplier
Taylor Woodrow
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E&M Supplier
Adtranz (ABB Daimler Benz
Transportation)
*A 50:50 joint venture between Germanys AEG Pte Ltd, the electronics
division of Daimler-Benz, and British construction firm Taylor-Woodrow.
What Happened
Output/outcome
o Introduction of rail systems with foreign technology
o Incubation of the railway industry
Risk materialized
o Optimistic demand forecast
o Asian currency crisis (1997)
Exit
o Ownership of STAR/PUTRA/KL monorail transferred
to 100% government-owned PRASARNA (20042007)
26
Case Study 4
Delhi Airport Line
27
Transportation needs
o Serious traffic problem since 1980s
o A need to connect the airport to center-city
o National plan recommends to develop a metro
system when PHPDT >20,000 for at least
5km, etc.
28
29
Airport Line
opened in
2011 using PPP
model.
Lender
Finance
DMRC
BOT for 30
years
Civil work
Construction Supplier
30
SPC
DAMEPL
EPC contract
EPC Supplier
CAF(Rolling stock),
Siemens(Signals) etc.
What Happened
Output/outcome
o Efficient procurement -zero VGF bidding
Risk materialized
o Services suspended due to civil structure
problems
o Services resumed but with speed limit of 50km/h
Exit
o The contractor suspended services/announced
cancellation of the concession contract (2013)
o DMRC took over the operation
31
Lessons/Implications to ADB
32
Implications to ADB
No cases made all stakeholders happy
PPP in railway might work in such
conditions as:
o Under availability payment mechanism
o Smaller size project in cost/scope
o Cases in which require competition
Thanks.
37