PIARC - Durban 2003 - P.P.P in S.A. Public Private Partnerships Overview : South Africa’s Road Concession Market by Leo Rohrig CEO: Bakwena Platinum Corridor.

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PIARC - Durban P.P.P in S.A. Public Private Partnerships Overview : South Africa’s Road Concession Market by Leo Rohrig CEO: Bakwena Platinum Corridor Concessionaire

PIARC - Durban P.P.P in S.A. PPP: Transfer of Risks, Rights & Obligations PUBLIC SECTOR HIGH PRIVATISATION OUTSOURCING PRIVATE SECTOR LOW HIGH PPP

PIARC - Durban P.P.P in S.A. PPP’s in South Africa GOVERNMENT LEVEL LEVELEXAMPLE Local Local Dolphin Coast W.S. Dolphin Coast W.S. Provincial Provincial Hospital Bloemfontein Hospital Bloemfontein National National Prisons (2) Prisons (2) Toll Concessions (3) Toll Concessions (3)

PIARC - Durban P.P.P in S.A. Toll Road Concessions Maputo Corridor Witbank - Maputo N4 503 km N3 Corridor Heidelberg - Cedara N3 418 km Platinum Corridor Warmbaths – Pretoria – Botswana N1 / N4 395 km

PIARC - Durban P.P.P in S.A. Toll Road PPP : Parties SANRAL:Implementing AuthoritySANRAL:Implementing Authority SPONSORS: Developers & Equity ProvidersSPONSORS: Developers & Equity Providers INVESTORS:Equity ProvidersINVESTORS:Equity Providers LENDERS:Loan Fund ProvidersLENDERS:Loan Fund Providers + Advisors across spectrum

PIARC - Durban P.P.P in S.A. PPP : Breaking New Ground (1) SANRALSANRAL  Political Acceptance  Transfer of Rights  Control Obligations SPONSORSSPONSORS  Assuming New Risks  Funding Project Development  Accepting Delayed Returns

PIARC - Durban P.P.P in S.A. PPP : Breaking New Ground (2) INVESTORSINVESTORS  Understand Infrastructure & Traffic  Associated risks  Different Return Profile LENDERSLENDERS  Setting Performance Criteria  Agree risk limitations  Implement Control Mechanisms

PIARC - Durban P.P.P in S.A. Transfer of Risks TECHNICAL : Design, Construction, Maintenance, Upgrading Concessionaire Overloadingshared Competing Roads shared

PIARC - Durban P.P.P in S.A. Transfer of Risks COMMERCIAL Government guarantee None Tariffs Agreed up front DiscountsConcessionaire Protestor Action Concessionaire Traffic Volume Traffic Growth REVENUEConcessionaire

PIARC - Durban P.P.P in S.A. Sponsor’s new Focus Contract cycle ~ 3 y ► 30 y Business Type known ► new Risks end ► ongoing Payments & Returns instant ► 10 y Development costs low ► high Public exposure low ► high

PIARC - Durban P.P.P in S.A. Development Process Prequalification RequestPrequalification Request TenderTender Best And Final Offer ( BAFO )Best And Final Offer ( BAFO ) Preferred BidderPreferred Bidder ConcessionaireConcessionaire - all at developers risk – - all at developers risk – Revised process now agreed

PIARC - Durban P.P.P in S.A. Participation of PDEs Equity :( Minority ) ShareholdingEquity :( Minority ) Shareholding Project :D&C Joint VenturesProject :D&C Joint Ventures D&C Sub Contracts O&M Sub Contracts Direct Assistance to SMMEs Limitations:Access to funds

PIARC - Durban P.P.P in S.A. Socio-economic Upliftment Employment : D & C activities ( current & future) O & M activities (permanent ) O & M activities (permanent ) Training & Capacity Building: Skills transfer & Mentorship Bursaries & Scholarships Economic Growth Promotion : Community Participation Development Fund

PIARC - Durban P.P.P in S.A. Way Forward Number of self-sustainable road sectors limitedNumber of self-sustainable road sectors limited Future schemes need increased government participation to lever private sector inputFuture schemes need increased government participation to lever private sector input  Equity holding  Subsidies  Guarantees Apply agreed process changesApply agreed process changes Advance the PPP processAdvance the PPP process

PIARC - Durban P.P.P in S.A. Advance the PPP Concept Remove misperceptions Intensify information process e.g. fuel levy Unpack complex structures Sell benefits of PPPs Efficient service delivery Provide employment Free government funds Retain resources and expertise

PIARC - Durban P.P.P in S.A. The PPP Delivery Construct / upgrade 1300 km National RoadConstruct / upgrade 1300 km National Road Private Sector Funding : R 9 billionsPrivate Sector Funding : R 9 billions Average Daily Traffic vehiclesAverage Daily Traffic vehicles + 10 % Heavies+ 10 % Heavies 15 Mainline & 14 Ramp Plazas : 223 lanes15 Mainline & 14 Ramp Plazas : 223 lanes Electronic Toll Collection introducedElectronic Toll Collection introduced Enhanced road safety : SOS & IMSEnhanced road safety : SOS & IMS new jobs created > multiplier effect new jobs created > multiplier effect 6 R 108 mio for community upliftmentR 108 mio for community upliftment