BrazilPAC’s Investment Opportunities
ROBERTO GARIBESpecial AdvisorStaff House of the Presidency of the RepublicStaff House of the Presidency of the Republic
PAC’S INVESTMENTSPAC’S INVESTMENTS
CPAC – Growth Acceleration Program
In 2007 – PAC 1To accelerate the pace of economic growth
T i l t d i tTo increase employment and income ratesTo decrease social and regional inequalitiesTo overcome infrastructure bottlenecks To overcome infrastructure bottlenecks
In 2009, a new functionTo reduce the impact of the international economic crisis –countercyclical policy
In 2010, a new stage: PAC 2 – 2011-2014
S f i d Set of measures aimed at:To encourage private investmentsTo remove bureaucratic, administrative, regulatory, legal and legislative
b t l t thg y g g
obstacles to growthTo increase public investments in infrastructure
GROWTH ACCELERATION PROGRAM –GROWTH ACCELERATION PROGRAM PAC 1, 2007-2010
Infrastructure projects in three areasInfrastructure projects in three areas€ billion
Area 2007-2010 After 2010 TOTAL
LOGISTICS 43.3 23.0 66.3 POWER G&T 136.6 341.7 478.3
SOCIAL AND URBAN 116 8 14 3 131 2 SOCIAL AND URBAN 116.8 14.3 131.2
TOTAL 296.8 379.0 675.8
GROWTH ACCELERATION PROGRAM –GROWTH ACCELERATION PROGRAM PAC 2, 2011-2014
Preliminary investment forecast€ billion
Axes 2011-2014 After 2014 TOTAL
€ billion
PAC BETTER CITY 25.8 - 25.8 PAC COMMUNITY WITH CITIZENSHIP 10.4 - 10.4 CITIZENSHIPPAC MY HOUSE, MY LIFE 125.8 - 125.8 PAC WATER AND LIGHT FOR ALL 13.8 - 13.8 C G O 13.8 13.8 PAC TRANSPORTS 47.2 2.0 49.3 PAC ENERGY 208.7 283.4 492.1
TOTAL 431.8 285.5 717.2
INVESTMENT OPPORTUNITIES:INVESTMENT OPPORTUNITIES:
RAILROADS
AIRPORTS
URBAN MOBILITYURBAN MOBILITY
PORTS
RAILROADSRAILROADS
RAILROADS INVESTMENT O O SOPPORTUNITIES
RAILROAD CONCESSION PROGRAM
P ti i ti i bli biddi
PROGRAM
Participation in public bidding processes• North-South Railroado t Sout a oad• East-West Integration Railroad• High-Speed Rail
NEW CONCESSION AND USAGE MODEL FOR NEW RAILROADS – In study by the GovernmentRAILROADS In study by the Government
Separation of Infrastructure and Operations:Separation of Infrastructure and Operations:• VALEC is the Concessionaire for the North-South, East-West
Integration and Midwest Integration RailroadsIntegration and Midwest Integration Railroads• The infrastructure management would be under VALEC’s
responsibility, and totally separated from the operation• A third party, non-concessionaire, logistics operator or user
would be entitled to travel by the existing railroad concessions by paying rates by paying rates
• Would be established a preset number of tracks to suit its needs
NORTH-SOUTH RAILROAD – SOUTH SECTIONSECTION
33% f B il’ i lt l d ti • 33% of Brazil’s agricultural production • 72% of agricultural land• Large mineral reserves• Outflow of the agro-industrial and mineral
production to four ports
Length: 1 525 kLength: 1,525 kmInvestment: € 2,2 billionInvestment: € 2,2 billion
P t f It i/MA
Port of Vila do Conde /PA
Port of Itaqui/MA
Palmas/TO
Anápolis/ GO
Estrela D’Oeste/SP
Port of Itaguaí/RJ
Port of Santos/SPPort of Santos/SP
EAST-WEST INTEGRATION RAILROADEAST-WEST INTEGRATION RAILROAD
• Outflow of the agricultural and mineral gproduction
• Waterway integrationy g
L th 1 527 kLength: 1,527 kmInvestment: € 1,7 billion,
São Francisco Waterway
Figueirópolis/TO
Ilhéus/BA
HIGH-SPEED RAILS PLANNED
PAC 1Campinas-São Paulo-Rio de Janeiro98 km + 413 km: 511 km
PAC 2 – On studyy•Curitiba-São Paulo: 461 km•São Paulo-Belo Horizonte: 559 km•Campinas-Uberlândia: 540 km
Uberlândia
HIGH-SPEED RAIL - HSRPROPOSED STATIONS
• Most populous region (36 million inhabitants) and the most developed economically(45% f GDP) f B il(45% of GDP) of Brasil
• Rio de Janeiro-São Paulo: 450 km in 93 minutes• São Paulo-Campinas: 100 km in 30 minutes
HIGH-SPEED RAIL – HSRProject scope
• Estimated investment: €15.7 billion• Deadline for entry into operation: 2016
Announcement published onJuly 13, 2010• Deadline for entry into operation: 2016
Concessionaire responsible for the design, construction, operation and maintenance complying with technical performance parameters;
y
maintenance, complying with technical performance parameters;Auction to be open to all existing technologiesCompulsory technology transferPublic sector participation: own capital and financingPublic sector participation: own capital and financingDocumentation available at www.tavbrasil.gov.br
• Technical studies on demand, alignment, geology, operation and economic-financial Technical studies on demand, alignment, geology, operation and economic financial modeling completed and available
Concession auctionNovember, 2010
HIGH-SPEED RAIL – HSRTransport Matrix 2008 Transport Matrix, 2008
Thousand passengers per yearWithout HSRModal RIO - SÃO PAULO RIO - CAMPINAS REGIONAL TOTAL
Plane 4,414 275 - 4,689Car 1,207 87 15,770 17,064Bus 1,687 121 10,039 11,847, , ,Total 7,308 483 25,809 33,600
With HSRt SHSR - Economy 2,648 251 17,069HSR - Executive 871 51 922
HSR - Total 3.,19 302 14,170 17,991
14,170-
HSR Total 3.,19 302 14,170 17,991Plane 2,368 101 0 2,469Car 751 31 8,108 8,890Bus 670 49 3,531 4,250Bus 670 49 3,531 4,250Total 7,308 483 25,809 33,600
HIGH-SPEED RAIL – HSRDemand ForecastingDemand Forecasting
DEPARTURE ARRIVAL 2008 2014 2024 2034 2044EXPRESS SERVICES 3,821 7,070 11,282 19,323 27,788
Rio de Janeiro São Paulo 3,519 6,435 10,201 17,348 24,948Rio de Janeiro Campinas 302 635 1 081 1 975 2 840Rio de Janeiro Campinas 302 635 1,081 1,975 2,840
REGIONAL SERVICES 14,170 25,538 34,777 49,774 71,577
Rio de JaneiroV. Redonda/B. Mansa 1,017 2,619 3,271 4,211 6,055
S.J. dos Campos 84 211 294 422 606
V. Redonda/B. MansaS.J. dos Campos 44 254 337 457 657
São Paulo 88 184 233 308 443Campinas 15 40 55 79 113
S.J. dos CamposSão Paulo 4,959 8,553 11,490 16,282 23,415Campinas 598 1,305 2,003 3,110 4,473, , , ,
São Paulo Campinas 7,365 12,372 17,094 24,905 35,815TOTAL 17,991 32,608 46,059 69,097 99,365
HIGH-SPEED RAIL – HSRRevenue Forecasting
DEPARTURE ARRIVAL 2014 2024 2034 2044€ million
Revenue Forecasting
EXPRESS SERVICES 663.67 1,058.41 1,823.69 2,622.59Rio de Janeiro São Paulo 597.27 948.13 1,622.46 2,333.23Rio de Janeiro Campinas 66.40 110.27 201.23 289.36
REGIONAL SERVICES 392.32 534.42 764.18 1,098.92
Rio de JaneiroV. Redonda/B. Mansa 47.87 59.78 76.95 110.64
S J dos Campos 9 82 13 69 19 59 28 18S.J. dos Campos 9.82 13.69 19.59 28.18
V. Redonda/B. MansaS.J. dos Campos 7.91 10.49 14.19 20.41
São Paulo 8.14 10.37 13.64 19.59Campinas 2 14 2 95 4 22 6 08Campinas 2.14 2.95 4.22 6.08
S.J. dos CamposSão Paulo 111.95 150.08 213.13 306.50Campinas 29.04 44.64 69.27 99.59
Sã P l C iSão Paulo Campinas 175.46 242.42 353.19 507.90TOTAL 1,056.00 1,592.82 2,587.87 3,721.50
HIGH-SPEED RAIL – HSRTrack description
Ch t i ti
Track description
Characteristics• Gauge: 1,435 mm• Maximum speed: 350 km/hMaximum speed: 350 km/h• Minimum horizontal radius: 7,228 m• Minimum vertical radius: 42,875 m
M i di t 35 /• Maximum gradient: 35 mm/m• Axle load: 17t • Minimum platform: 500 m
Reference route• Length: 510 8 km• Length: 510.8 km• Tunnel: 90.9 km (18%)• Bridge: 107.8 km (21%)
O f 312 1 k (61%) • On surface: 312.1 km (61%)
HIGH-SPEED RAIL – HSRStudiesStudies
Environmental Studies• The route considered the social and environmental constraints identified• Terms of Reference for EIA / RIMA defined• ANTT will conduct an environmental impact study in order to obtain the license
to begin the HSR’s constructiong
Geological-Geotechnical StudiesG l i l i f th f t l t d• Geological mapping of the reference route completed
• Geological survey and laboratory tests of the samples taken completed
HIGH-SPEED RAIL – HSRInvestments
€ (000)
Investments
Earthmoving 1.003.954,1 6,4Item Investment 2009 %
Artworks 8.252.281,5 52,4Buildings and equipments 644.445,9 4,1Signalling and Telecomm nications 286 726 5 1 8Signalling and Telecommunications 286.726,5 1,8Permanent Route 972.037,7 6,2Environmental Measures 1.770.027,2 11,2Environmental Measures 1.770.027,2 11,2Electrification 618.799,4 3,9Trains 1.245.356,1 7,9Additional Services 946.282,6 6,0TOTAL 15.739.911,2 100,0
HIGH-SPEED RAIL - HSRFinancial Modeling – General assumptions
Demand and Revenue: Studies made by HalcrowTaxes exoneration: REIDI and ICMS PIS and COFINS exemption
Financial Modeling General assumptions
Taxes exoneration: REIDI, and ICMS, PIS and COFINS exemptionInvestment:
• 5 years• R$34,6 billion
Term of Concession: 40 yearsGovernment’s direct financing:Government s direct financing:
• Interest Rate: TJLP + 1%• Term: 30 years• DSCR: 1.2
IRR • For the project: 5.7%For the project: 5.7%• For the stockholder: 9.2%
Leverage level: 70% / 30%$ $Public participation (ETAV): US$0.6 bi (own capital) + US$1.3 bi
(expropriation)
TREM DE ALTA VELOCIDADE - TAVHIGH-SPEED RAIL - HSRConcession model
Legal model: common concession paid with extraordinary
Concession model
Legal model: common concession paid with extraordinary revenues and tariffs
Object: public high-speed rail concession preceded by the infrastructure construction
Term: 40 years
T iff t i ili dj t d b IPCA ith i i Tariff system: price ceiling adjusted by IPCA with pricing freedom, provided the following condition is respected:
• Price ceiling for Economy Class: €0 2 per km in the Rio de Janeiro - São Paulo • Price ceiling for Economy Class: €0.2 per km in the Rio de Janeiro - São Paulo direct connection
AIRPORTSAIRPORTS
AIRPORTS GuidelinesTo provide for the airports a structure suitable for:
• Ensuring quality care and users’ comfortM t th i i th j t d d d• Meet the increase in the projected demand
Improving the conditions for operational safety:Improving the conditions for operational safety:• Lane, yard, control tower• Technological upgrade of the operating systemsTechnological upgrade of the operating systems
Total: 13 airportsTotal: 13 airports
AIRPORTSHistorical DemandHistorical Demand1997 : 0.3 passengers carried per capita (163.8 million)
After 2003: growth of 10% on passengers carried per capita
2008 : 0.6 passengers carried per capita (189.6 million)
13131296
111102
113Number of passengers: Million boardings + landings + connections 10% pa
5959
10
1311
1099109
82717574686363
55
4% pa 59%59%
10010
9890837161666558545344
91155
44
050403020100999897 06 0807DomesticInternational
Source: EMBRATUR
HOST CITIES AIRPORTS
Airport
R$ Million, Preliminary
Investment
Belo HorizonteBrasíliaCuiabá
• Responsibility Matrices sent to host
408.6748.487 5
Sittuation
CuiabáCuritibaFortaleza
cities
• Goal: sign up the Matrices until July 19, 2010
87.572.8
279.5ManausNatalPorto Alegre
327.4568.9*345.8
RecifeRio de JaneiroSalvador
19.8687.345 1Salvador
São PauloTotal
45.11,961.45,552.5 Considering Guarulhos
(R$1,219.4 million) and Vi (R$ 742 illi )
* Includes R$ 400 million from concessionaire’s investment
Viracopos (R$ 742 million)
HOST CITIES AIRPORTSOperating modules
R$ Million
Operating modules
Airport Amount (R$ Million) Size (m2) Current operating
capacity (million) Capacity increase
(million) Opening Ending
Brasília 4 0 1 500 8 0 Balancing to improve August, June 2013
Campinas 5.0 1,200 3.5 2.5 October, 2010 July, 2013
Brasília 4.0 1,500 8.0 g pthe comfort level
g2012 June, 2013
Guarulhos 32.5 14,000 25.0 3,.0 February, 2011
December, 2011
Guarulhos 23.2 10,000 25.0 2.5 August, 2012 June, 2013
AIRPORTS INVESTMENT O O SOPPORTUNITIES
AIRPORTS CONCESSION PROGRAMPROGRAM
Participation in public bidding processes• São Gonçalo do Amarante Airport
SÃO GONÇALO DO AMARANTE AIRPORTAIRPORTConcession to operate the São Gonçalo do Amarante Airport at the State of Rio Grande do Norte.
Airport fees from the concessionaire limited by ANAC
Fees adjusted annually by a consumer price index and revised ordinarily every five years in order to preserve the
i d fi i l b l f th t teconomic and financial balance of the contract
SÃO GONÇALO DO AMARANTE AIRPORTAIRPORTThe higher value offered by the grant wins
P hibit dProhibited• Participation of air transport services companies, directly or indirectly, on the
voting capital of the concessionaire in a percentage equal to or greater than voting capital of the concessionaire in a percentage equal to or greater than ten percent
• Participation of the concessionaire or its shareholders, directly or indirectly, on the voting capital of companies providing air transport services in a g p p p g ppercentage equal to or greater than ten percent
Demand projection – million passengers per yearDemand projection million passengers per year• 2010 – 2.0 • 2020 – 4.7 • 2030 – 7 9 2030 7.9 • 2045 – 15.6
SÃO GONÇALO DO AMARANTE AIRPORT I t t R lt
Investment cycles in a horizon of 35-years concession
Investment – Resultsy y
180.000
200.000
120.000
140.000
160.000
80.000
100.000
20 000
40.000
60.000
-
20.000
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
Source: ANAC / BNDES
350.3 MM 195.2 MM 129.3 MM
SÃO GONÇALO DO AMARANTE AIRPORTK I t tKey Investments
Passenger Terminal 192 408Passenger Terminal 192,408Infrastructure Systems 54,151
Flight Protection Systems 45 148Flight Protection Systems 45,148Environmental Investments 31,473
Oth I t t 27 192Other Investments 27,192Total 350,371
URBAN MOBILITY URBAN MOBILITY PAC 1PAC 1
URBAN MOBILITYS bSubways
State City Amount€ Million
State City AmountCE Fortaleza 385,5 RJ Rio de Janeiro 216,2 RJ Rio de Janeiro 216,2 SP São Paulo 994,4 MG Belo Horizonte 16,0 ,BA Salvador 295,0 PE Recife 177,4 RS Porto Alegre 323,3
2.407,7 TOTAL
URBAN MOBILITYURBAN MOBILITYPAC 2PAC 2
URBAN MOBILITYG id liTo improve the public transportation systems in major urbanGuidelinesTo improve the public transportation systems in major urbancenters
Subway, LRT, BRT and bus lanes
Better public transportationBetter public transportationReduced travel timeIncreased quality of life on major cities
Investment*€ billion
InvestmentUnion Budget 2.7
Financing 5.4 gTOTAL 8.1
*Does not includes counterparts
URBAN MOBILITY URBAN MOBILITY WORLD CUP 2014WORLD CUP 2014
WORLD CUP 2014 – HOST CITIES
Fortaleza
NatalManaus
Recife
CuiabáSalvador
Belo Horizonte
Brasília
Cuiabá
Belo Horizonte
São Paulo Rio de JaneiroCuritiba
Porto Alegre
RESPONSIBILITY ASSIGNMENT MATRIX
PortsIssue Responsible
PortsPassenger Terminals Federal Government
AirportsPassenger Terminals and Lanes Federal Government
Stadiums Construction, reform and maintenance States and Municipalities Federal
Urban Mobility States and Municipalities Government
support through
financing
Hotels Private sectorg
URBAN MOBILITYProjects selection criteria:• Attending the public transport system• Directly related to the World Cup: to improve the access to the y p p
stadium, hotel zones, airports, ports and/or bus stations• Having preliminary / executive designs • Complying with the World Cup schedule• Connecting different transport modes – Intermodality• Having a defined operator
URBAN MOBILITY FINANCING
Pró–Transporte program:• Amount: € 4.1 billion through FGTS• Deadline: 4 years of grace period after signing the contracty g p g g
20 years to repay after the grace period (30 years for public rail transport)
• Scope: Light Rail Vehicles (LRVs) Monorail and Bus Rapid • Scope: Light Rail Vehicles (LRVs), Monorail and Bus Rapid Transit (BRT)
URBAN MOBILITYS M d lSummary per Modal
Modal Qty Project Value FinancingS b 2 15 8 15 0
€ Million
Subway 2 15,8 15,0 Bus Terminals 3 29,0 28,0
Monitoring 3 51,0 50,6 g , ,VLT 2 284,6 240,1
Bus Corridors 18 875,1 821,0 M il 2 1 883 9 760 4 Monorail 2 1.883,9 760,4
BRT 20 2.104,2 1.613,6 Total 50 5.243,5 3.528,7 Total 50 5.243,5 3.528,7
URBAN MOBILITYSummary WorksheetSummary Worksheet
€ Million
N t l 2 185 9 163 2
Host City Qty Project Value Financing Value
Natal 2 185,9 163,2 Brasília 1 164,6 163,2
Fortaleza 7 254,1 187,4 C itib 9 201 6 199 2 Curitiba 9 201,6 199,2 Cuiabá 3 217,6 205,6
Porto Alegre 10 237,3 220,8 Salvador 1 256,7 244,9
Recife 5 321,9 293,0 Manaus 2 694,9 361,7
Belo Horizonte 8 688,1 462,6 São Paulo 1 1.293,0 489,2
Rio de Janeiro 1 727,9 538,0 TOTAL 50 5.243,5 3.528,7
PORTSPORTS
PORTS
C l t i t t t PAC• Complementary investments to PAC• Focus on passengers terminalsp g• Host cities with projected deficit in number of beds
PORTS EXTENSION AND MODERNIZATIONR$5.1 billion
Docks, piers, terminals, dredging and land accessDebureaucratization of port operationsPassengers Terminals for the World Cup 2014
Reduced logistics costsBetter operating efficiency on portsIncreased competitiveness from the Brazilian exportsIncreased competitiveness from the Brazilian exportsEncouragement to private investments
48 VENTURES 21 PORTS R$5 1 billi48 VENTURES – 21 PORTS - R$5.1 billion
Ventures QuantityyDredging for Deepening 12Port Infrastructure 24L i ti I t lli 5Logistics Intelligence 5Passengers Terminals – World Cup 2014 7
PORTSPort Estimated value
(R$ Million) Project Description
Salvador 36 0 To adapt the Warehouse for a Passengers Ferry Terminal, paving / Salvador 36,0 urbanizing the accesses and the parking lot
Recife 21,8 To adapt the Warehouse and to build a new area for a Passengers Ferry Terminal, paving / urbanizing the accesses and the parking lot
Natal 53,7To adapt the old Fridge and Shed for a Passengers Ferry Terminal, expanding the pier and paving / urbanizing the accesses and the
parking lotFortaleza
(Mucuripe) 105,9 To build the Passengers Ferry Terminal and pier / cradles, paving / urbanizing the accesses and the parking lot
Santos 119 9 To align the pier and to develop an internal access roadSantos 119,9 To align the pier and to develop an internal access road
Rio de Janeiro 314,0 To build three piers
Manaus 89,4 To adapt the Warehouses for a Passengers Ferry Terminal, expanding the pier, defenses, urbanizing the parking lot and building a covered
pedestrian walkway
TOTAL 740,7
BrazilPAC’s Investment Opportunities
ROBERTO GARIBESpecial AdvisorStaff House of the Presidency of the RepublicStaff House of the Presidency of the Republic