World-Wide CNS/ATM Systems Implementation Conference Building a Business Case for CNS/ATM Implementation in the ASECNA Region of Africa World-Wide CNS/ATM Systems Implementation Conference May, 1998 Presented by Dr. Upali Wickrama Chief, Forecasting and Economic Planning, ICAO

ASECNA Current Capabilities ASECNA Future Plans ASECNA Business Case ASECNA Background Stakeholder Relationship ASECNA Current Capabilities ASECNA Future Plans ASECNA Business Case

ASECNA General Information 16 Member states 16 million sq. km of area 25 Major international airports 160,000 Flights 5 Millions passengers 5,000 Staff 100 Airports (regional & domestic

Total Revenues

Distribution of User Charges

Total Expenses

Implementation Plan Cost/ Benefit Business Cases Financial Community Economic Viability Business Cases Provider/User State Sub-regional Regional Financial Community

Summary of Results from Case Studies

Financial Institution Airspace ATC Service Users Providers Major Stakeholders Other A/C manufacturers ATM Equipment supplies Major Stakeholders

ASECNA Future Plans Capital Investment Plan for (1999 -2005) for CNS/ATM Modernization

CNS/ATM Modernization (Ground Side by ASECNA) ASECNA Business Case Communications Additional VSAT, VHF Voice/Data Link, ATN Navigation WAAS/EGNOS, LAAS at 24 airports CNS/ATM Modernization (Ground Side by ASECNA)

ASECNA Business Case Surveillance ATM Two en route SSR, ADS Automation related to CNS modernization

CNS/ATM Modernization (Avionics by Airlines) ASECNA Business Case Communications Avionics VDL/TDMA, CPDLC Navigation Avionics WAAS/LAAS Surveillance Avionics ADS CNS/ATM Modernization (Avionics by Airlines)

Key Assumptions 1999 - 2004 Implementation period: Cost of capital: Life cycle: User charges: Fee added to the cost: Satellite lease costs: 1999 - 2004 7 per cent 15 years To resume in 2005 10 per cent 0.45/kilobit

Key Assumptions (cont.) Traffic growth rate: Movement and Flight hours Rate of return: No cost savings assumed for decommissioning: 5 % 3.5 % 10% -

Business Case Results for Service Provider (ASECNA) Expenses Business Case Results for Service Provider (ASECNA)

ASECNA Cash-flow Profile Business Case ASECNA Cash-flow Profile Revenue (User fees) Revenue (Less Operating Expenses) Equipment Investment Pay-out Period

Business Case Results for Service User (Airlines) Expenses Business Case Results for Service User (Airlines)

Business Case Airlines Cash-flow Profile Revenues Revenues (Less Operating Expenses) Equipment Investment Pay-out period

Risks Exchange rates Schedule Traffic growth Rate of return Efficiency rates

Stages of the Business Case

Conclusion Methodology enhanced beyond cost-benefit to develop Business Cases This assessment may require updating after consultation with ASECNA, IATA & Financial Institutions Once the Business Cases are co-ordinated, an integrated Financial Plan can be established

Conclusion (cont.) Investment for some components are substantial for both service provider & user Multinational planning & co-ordination among various States, sub-regions & regions are essential in order to minimize costs, ensure compatibility and avoid duplication of effort, for the efficient implementation of the system