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PPP projects in the Netherlands
Advisory Group on Privatisation
19-20 september 2000Budapest, Hungary
Daniel Loschacoff
PPP Knowledge Centre
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Content• PPP policy of the Dutch Government
– Background– Objectives of PPP
• Case study: High speed rail link (HSL)
• Lessons Learned
• Summary
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Why PPP in the Netherlands
• Increases value for money for taxpayers (PPP is not off-balance sheet financing)
• Instrument to focus government on its core business
• EU policy
Po
licy
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Value for Money
What?– Higher quality (1st)– Less costs– Faster realisation
How?– Output orientated approach– Scope optimalisation– Risk transfer (incentive)
Po
licy
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Back to Core Business
• Let parties do what they are good at– Government: from player
to referee/purchaser– Leaving room for
innovation by the market
This means institutional changes(more private sector supply, different role
for the government)
Po
licy
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The EU factor
• Increased deregulation & third party access
• Increased competition
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Outline High Speed Rail Link
• Links Amsterdam to the Belgian border
• Trains will run at 300 km/h
• Total costs Euro 5.0 billion
• Tendering in three parts
• Separate and different tendering procedures
HSL-Zuid
Civil WorksDesign and construction
contractors
PPPs for commercialdevelopments
of railway stations
Government
Private financiers
Passengers
In frastructure Provider
Building Capita l costs Construction
period
O peration of line M aintenance costs Replacem ent
investm ent Repaym ent Financing/tax
HSLStation Areas
Train Operating Companies• Operating costs• Rolling stock and maintenance• Financing/tax/dividends
Funding forcivil works
Access fees
Fares
Repaymentof loans
Loans
Performancefees Access fees
payment during construction phase
payment during operations
transfers
Coordination/cooperation
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HSL (IP) contract• DBFO-contract for infrastructure; train
operation separated out (NS first refusal)
• risk transfer: not market risk
• performance fee based on availability of railway service
• 30 year period
• IP contract award by the end of the year
• completion of infrastructure by 2005
Pro
jects
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Key bottlenecks
• Limited experience of PPP
• Public and private parties have to adapt to their new role (some reluctance)
• No easy pilots (complex projects + projects with budget constraints)
Result: progress is slow
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Opportunities
• Bottlenecks can - and will - be solved within the next few years
• Strong political commitment to PPP
• Private sector involvement is not controversial
• PPP is in line with international policy development
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Summary• Objective: value for money, not private
finance
• Case by case-approach: is PPP better?
• Bottlenecks can be removed soon
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And Remember:in the Polder Model…
all parties want to be involved in the decision making process.
