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V!"#$"B%&$'C&"()*+,"-GLOBAL SOLUTIONS FOR PUBLIC PRIVATE PARTNERSHIPS

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Preface

IamanindependentconsultantspecializedinPublicPrivatePartnershipscommonly

referredtoasPPP.

IbelievethatPPPcansignificantlyenhancetheeffec

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Contents

I. DefiningPPP

II. Accelera

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I. DefiningPPP

II. Accelera

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NoCommonDefini

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PPPisanAlterna

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ModesofPPP

7

Definedbynatureofriskalloca

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ContractualStructure

8

Structureisgeneric,thoughpaymentmechanismdifferspermodeofPPP

PPPCompany

(orSpecial

PurposeVehicle)

Contrac

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I. DefiningPPP

II. Accelera

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InfrastructureDeficit

10

4.0%2.9% 2.6%

7.5-9.0%

5.5-7.0%

3.0%

LowIncomeCountries

MiddleIncomeCountries

HighIncomeCountries

Actual Needed

November26,2007Canadas$123billionmunicipalinfrastructuredeficitisnotthefinalprice

tagforallitsinfrastructureneeds,saysaconstruc

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FiscalConstraints

11

Limitpossibilitytoincreaseinfrastructurespending

Sources:CIAFactbook2007and2010,Visualeconomics

2.5%

Canada:60.8%

$814billion

11.9%

US:60.8%

$8.7trillion

1.3%

Argen

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PrivateInfrastructureFinance

12

Significantgrowthinthedevelopingworldtosupportfundingofinfrastructuredeficit

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1990199119921993199419951996199719981999200020012002200320042005200620072008

InvestmentinPhysica

lAssetsinUSDmillion

EastAsiaandPacific EuropeandCentralAsia La

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PrivateInfrastructureFinance

13

andalsoinsomeofthematuredeconomies

1.29 1.05 0.70

4.95

8.92

7.37 7.35

4.96

2001 2002 2003 2004 2005 2006 2007 2008

e.g.mainlandEurope e.g.UK

0.431.17

2.21 2.48 2.4

4.73

3.32

8.19

3.46

5.254.26

9.61

7.326.54

19951996199719981999200020012002200320042005200620072008

Sources:PublicPrivateFinance

CAGR

21%CAGR

17%

Valueofprojectscontractedinbillion) Valueofprojectscontractedinbillion

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PPPLeaders

14

Deliveringsome10-30%oftheirinfrastructureservicesthroughPPP

100

5055

50

32

935

450400

215

126100

19

0

100

200

300

400

500

600

700

800

900

1000

0

20

40

60

80

100

120

UK2008 India2009 Korea2010 MainlandEurope2001-2008

Australia2005 Canada2010 SouthAfrica2009

Numberof

Projects

Valueofprojects

inbillionUSD

ValueofProjects( inUSDbil lion) NumberofProjects

Sources:www.pppindindiadatabase.com,UniversityofSydney,IFSL,The

ConferenceBoardofCanada,Na

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I. DefiningPPP

II. Accelera

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InfrastructureRisks

16

90%

73%

40%

Flyvbjerg'sReview

of258projects

worldwide

NAO'sreviewofcostoverrunsinthe

UK

KPMG'sreviewof

1,035projectsin

India

Costoverruns

82%

70%

60%

KPMG'sreviewof

1,035projectsin

India

NAO'sreviewof

delaysintheUK

EIBreviewof50

projectswithdelay

>1year

Delays Lessdemand(e.g.roads)

PercentageofProjects PercentageofProjects

Deliveringinfrastructurethroughtradi

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Effec

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CostSavings

18

11%

20%

28%

Netherlands

UK

Australia

AverageCostSavingsofPPPversusTradiJonal

PublicSectorComparatorOutcome

Pros

Ra

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PerformanceImprovement

19

12percentincreaseinresiden

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Transac

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CostofCapital

21

Costofpublicfinanceappeartobelowerthancostofprivatefinance,butaretheyreally?

PublicFinance

Costofcapitalisdefinedbytheriskfreeinterestrate

approximatedbytheinterestrate

ongovernmentbonds

PrivateFinance

Costofcapitalisdefinedbytheriskfreerateplusariskpremiuminvestors

andbanksrequirefortherisksthey

incur

Atfirstsight

creditworthinessoftherespec

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I. DefiningPPP

II. Accelera

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PPPscanFail

23

TollRoadsinMexico

Between1987and1995,52projects(25compe

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PPPscanFail

24

HospitalsinAustralia

TheVictoriagovernmentcontractedwithconsor

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PPPscanFail

25

EurotunnelbetweenUKandFrance

In1986,theEurotunnelgroupwasfoundedtocarryoutajointprojectbetweentheUnited

KingdomandFrancetobuildarailtunnelundertheEnglishChannel.

Thees

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I. DefiningPPP

II. Accelera

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PPPPolicy

27

Ensureacohesive,coherentandcomprehensivepolicytailoredtoyourobjec

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PPPLifeCycle

28

EnsurebankableandaffordablePPPsthatprovidevalueformoneyandapplytransparentand

compe

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Disclaimer

Theinforma

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