Www.bmvbs.de PPP projects in federal trunk road construction in Germany by Frank Süsser, (Head of Division StB 28, Liaison Division) Federal Ministry of

www.bmvbs.de

PPP projects in federal trunk road construction in Germany

byFrank Süsser,

(Head of Division StB 28, Liaison Division) Federal Ministry of Transport, Building and Urban Development

www.bmvbs.de StB 26 22.03.2012 ÖPP im Bundesfernstraßenbau2

Objectives of PPP

• High efficiency because of life cycle approach

• Quicker realization of measures, shorter periods of traffic disruptions

• The state should focus on core functions

• Promoting innovations in the sectors of construction, operation and maintenance


Principles

• Provision of services from one source (tender procedure for construction, maintenance, operation and partly financing)

• No privatization, i.e. the responsibility remains with the state

• Long-term contractual links, life-cycle approach and contractual incentives for high-quality and efficient realization

• Functional provisions, more flexibility for industry

www.bmvbs.de StB 26 22.03.2012 ÖPP im Bundesfernstraßenbau

PPP models in federal trunk road construction

A model: = upgrading model

– In the case of existing federal motorways with first priority upgrading requirement, the private investor constructs the fifth and sixth lanes and operates and maintains all the lanes according to defined quality standards.

– He finances his expenses by start-up financing and toll revenue or by availability payments , i.e. no remuneration on the basis of traffic levels from the toll revenue transferred but a total remuneration in monthly payments according to temporal availability.

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PPP models in federal trunk road construction

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F model (named after the Private Sector Funding of Trunk Road Construction Act)

- The private investor constructs, maintains and operates bridges, tunnels and mountain passes ormulti-lane federal highways with separate carriageways for the two directions of traffic.

He is entitled to levy a toll (even from passenger cars). Up to now, 2 projects on federal highways have been realized

under local authority control. Further projects at federal level are being planned (e.g.

Weser crossing in the course of the A 281)


PPP in a wider sense

Function contracts in roadconstruction

-Life cycle approach;

-Term of contract 10 – 30 years, currently small-scale projects on the basis of functional requirements;

-At the moment, evaluation of 8 pilot projects, Preparation of a Guide on Value for Money Tests.

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Four A model pilot projects (1st generation)

The contracts were awarded for all projects (2007 - 2009):-A 8 in Bavaria: Augsburg – Munich (approx. 52 km, thereof 37 km upgrading)-A 4 in Thuringia: federal state border Hesse/Thuringia – Gotha access point (approx. 45 km, thereof approx. 25 km upgrading) -A 5 in Baden-Württemberg: Malsch – Offenburg access point (approx. 61 km, thereof approx. 41 km upgrading)-A 1 in Lower Saxony: Buchholz motorway junction – Bremen motorway interchange (approx. 72 km, thereof approx. 72 km upgrading)

In total: 230 kilometres (of a total of approx. 12,800 km of federal motorways in Germany), thereof approx. 175 km upgrading, Construction costs approx. 1.1 billion €, Period of the contracts: 30 years


8 new projects: The second batch (2nd generation)

In total: 450 kilometres (of a total of approx. 12,800 km of federal motorways in Germany),

Construction costs approx. 1.5 billion €,

Further PPPs

A model pilot projects

Second batch


Second batch PPP*Depending on the level of the process to achieve construction permission (to be provided by the federal state) and on the positive result of the Value for Money Test

Start of the contract award procedure*

1. (Bavaria/Baden-Württemberg) A8, Ulm-Elchingen motorway interchange – Augsburg W motorway junction

28 January 2009, award of contract: 11 April 2011; beginning of the contract: 1 June 2011

2. (Thuringia) A9, Lederhose access point – federal state border Thuringia / Bavaria

18 March 2009, award of contract: 4 August 2011; beginning of the contract: 1 October 2011

3. (Schleswig-Holstein/Hamburg) A7, Neumünster/N motorway junction– Hamburg/N motorway junction

14 December 2011

4. (Baden-Württemberg) A 6, Wiesloch-Rauenberg motorway interchange – Weinsberg motorway interchange

2012 (planned)

5. (Lower Saxony) A7, Salzgitter motorway junction – Göttingen access point

2012 (planned)

6. (Hesse) A 44, Diemelstadt access point – Kassel-Süd motorway junction

2012 (planned)

7. (Rhineland-Palatinate) A 61, Worms access point - federal state border Rhineland-Palatinate/Baden-Wurttemberg & A 650, A 65

2012 (planned)

8. (Northrhine Westphalia) A 1, Lotte/Osnabrück motorway interchange Münster/N access point and A 30, Rheine/N access point – Lotte/Osnabrück motorway interchange

2012 (planned)


Prerequisites for the start of the contract award procedure for the A

models

Suitability for realization as PPP model (assessment of suitability for realization as PPP)

Construction permission granted or at least to be granted in the foreseeable future

Positive result of the value for

money test


Value for Money Test

Cost of • construction, • maintenance,• operational service,• planning/ management

Controlling

Start-up financing

Non-transferable risks

Transferable risks

Non-transferable risks

Remuneration to be paid (tolls/availiability)

Economic advantage

Total costs

Conventional variant (PSC) PPP variant (PPP)

Remaining structures


Value for Money Test– taking national economic advantages into account

Monetizable benefit differences are primarily possible inthe following fields:

• Earlier activation of the overall benefit of the measure

• Lower level of disruption due to shorter construction time

• Benefit differences during the operational phase which are relevant to the national economy


Award of contract for PPP projects in detail

• EU tender notice, information memorandum

• Competition procedure

• Bidding phase (involving only four candidates)

• Negotiation phase (involving only two candidates)

• Best And Final Offer (BAFO)

• Final economic efficiency analysis

• Conclusion of contract with private partner

• Financial Close

Str

uctu

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neg

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proc

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Payment system for the A model pilot projects

• Upgrading, maintenance, operation and pro rata funding by the concessionaire

• Remuneration of the concessionaire from

the HGV tolls levied on the respective concession section ("user pays" funding cycle)

if necessary, start-up financing

if necessary, deductible amounts (contractually agreed upon)

Mechanism (remuneration based on traffic volumes) provides incentives for the concessionaire to ensure high-quality construction/maintenance and at least equivalent operational service


Structure of the toll remuneration

HGV toll

Toll Collect

Public sector

Federal Office for

Goods Transport

Transport Infrastructure

Financing Company

A model operator

Transfer of the tolls

Contr

ol fu

nct

ions


Remuneration mechanism availability model A 9

Start-up financing

Remuneration according

to availability

Increases/reductions of remuneration

according to availability

+/-Reductions due to

the system of points

- =

Remuneration of the private partner

Availability restrictions


Remuneration mechanism Unit toll model A8 Ulm-Augsburg

Remuneration of the concessionaire by Unit toll rate

- amount was subject to competition- transfer of the traffic volume risk to the concessionaire without simultaneous transfer of the fleet mix risk

Start-up financing - pre-determined

- payment in annual instalments to the tune of 25 % each


Findings/evolution with regard to future PPPs in road

construction

1. Positive market valuation, avoidance of market concentration;

2. Increase in competence (public sector + private sector), standardization;

3. Simplification of central contractual elements/ deepening of the functionality;

4. Integration and evolution of the findings from the function contracts in road construction;

5. Interaction among the procurement variants, e.g. economic efficiency of the project (transparency of the consequential costs, management of the "road"asset).


Contact details

Bundesministerium für Verkehr, Bau und Stadtentwicklung (BMVBS)- Abteilung Straßenbau -Robert-Schuman-Platz 1

53175 Bonn, Deutschland

Phone: + 49 (0)228-300-0

Fax: + 49 (0)228-300-3428

Contact:Referat StB 26: ÖPP im Bundesfernstraßenbau

Phone: +49 – (0)228/300-5260Email: [email protected]


Thank you very much for your attention!

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Www.bmvbs.de PPP projects in federal trunk road construction in Germany by Frank Süsser, (Head of Division StB 28, Liaison Division) Federal Ministry of