PPPs in the EU and implications for the Regional Level OPEN DAYS 2005 International Conference & Workshops, European Commission – Regional Policy DG PPPs in the EU and implications for the Regional Level Presented by: V. Kanakoudis, Civil Eng. Phd A. Sanopoulos, Regional Planner MSc (EUROCONSULTANTS S.A.),

PPP Types, Categories and Forms Introduction to PPP types of cooperation between the public & the private sector finance, manufacture, renovate, manage and maintenance public infrastructure and provide services either cooperating with the implementation body, or by the form of a services Provider where market liberation is either impossible or undesirable goal is to expand to medium-scale projects. PPP Types, Categories and Forms   Concessions Joint Ventures Hybrid Forms: BOT, DBFO, LRO etc.

PPP Legislation Progress in the EU Weak public sector, strong PPP interest (TR) Strong public sector, weak PPP interest (DK) Strong Public Sector, strong PPP interest (UK) Conclusions Provision of a central unit Provision of legislation Results in the praxis

PPP Implementation Areas in the EU Strong: Roads and Bridges, Water Supply and Sewage Middle: Railways, Hospitals, Airports Weak: Schools, Public Housing, Prisons Typology of PPPs: Definition of Unit of the provided good, Risk allocation, Management issues PPP Success Factors formation of strong «partnerships» public acceptance management transfer from public to private sector “bankability” & “viability” of the projects guaranty of meritocracy & performance evaluation during the contracting procedures

PPP and Structural Funds New Programming Period 2007-2013 Remaining funds for 2005-2006 and implementation pace Changing Status for Objective 1 regions and financial implications Two choices: develop procedures for the “direct combination” of private funding and EU funds Pre-assess a possible PPP allocation

Case Study 1: a PPP project in urban development: the new town of ZEP (Zone of Alternate Urban Planning) Kozani Major land uses based on urban-planning regulations:   Tourism Residential Regional Administration Common Facilities Regional Trade and Recreation Central Square and Common Areas

THE 4 SELF-FINANCING PROJECTS OF THE ZEP BUSINESS PLAN Project I construction of ready-built houses for Structured Urban Development sub-division of residential use 6 blocks in 46.551 m2 (A areas), with a total built surface area of 29.932 m2 Estimated cost of the investment: 35M€ Project II construction of buildings for Trade & Recreation sub-division with an Urban Center land use (based on concession) 4 blocks over an area of 43.904 m2 (YELLOW areas), with a total built surface of 11.700 m2 Estimated cost of the investment: 17 M€.

THE 4 SELF-FINANCING PROJECTS OF THE ZEP BUSINESS PLAN Project III construction of ready-built houses for Structured Urban Development sub-division for residential use 5 blocks over an area of 49.485 m2 (the ‘B’ area), with a total built area of 29.691 m2 Estimated cost of the investment: 35M€ Project IV construction of buildings for Tourism & Recreation use (based on concession) 1 block over a total area of 28.255 m2 (PINK areas), with a total built area of 16.953 m2 Estimated cost of the investment: 30M€

Financial Data: Total Budget of 65 M€ (1998 - 2010) Case Study 2: Environment Protection Project - Integrated Waste Management (DIADYMA S.A.) DIADYMA S.A.: founded in 1996 by the Municipalities of Western Macedonia to serve the needs of Waste Management and especially to implement the Integrated Waste Management System (IWMS) of the Region (4 Prefectures, 61 Municipalities, 300.000 residents, 100.000 tones of MSW per year) Financial Data: Total Budget of 65 M€ (1998 - 2010) Mechanical Collection: 6 Μ€ Transferring: 6,8 Μ€ Recovery & Recycling: 4,1 M€ Mechanical Separation & Treatment: 31,5 Μ€ Sanitary Land filling & Restoration: 11,2 Μ€ Other: 5,3 Μ€

Integrated Waste Management System Planning Environmental Impact Studies Systems Design & Optimization Systems Development & Management Technical & Feasibility Studies Tenders for Study Assignments and Facility Construction Facilities Planning & Construction Supervision Software Development & Logistics Support Implementation Supporting Infrastructure co-financed by the CF (2002 - 2004): Total budget (initial, 2001): 13 M€ Contracts (March 2004): 11 M€ Deductions (March 2004): 2 M€ (15%) Expenditure (June 2002 - April 2004): 4 M€

Recycling Facilities: the PPP challenge The Mechanical Separation and Composting Plant is scheduled to be completed by 2007: recovery is expected to exceed 70% before the year 2010, resulting into local tax reduction and systems optimization The total budget for the materials recovery & treatment infrastructure is estimated at 26 M€ until 2007 Private investment is expected to exceed 10 M€ (energy recovery unit not included)

Case Study 3: Construction & Operation of a small hydropower plant by a wide public base enterprise Municipal Dept of Vatsounia (Population: 520 habitants, Income sources: agriculture, cattle-raising) HYDROYLEKTRIKI S.A.: A small hydropower plant producing 600KW/h, provided to the Public Electric Power Utility Stockholders/shareholders: Municipal Dept of Vatsounia: 35% + Local population: 65% Capital stock: 264.123 € which is divided in 9.000 nominal stocks of face value of 29,34 € per item The Public Power Corporation S.A. has undertaken the commitment to buy electric power from HYDROYLEKTRIKI S.A.

VIABLE PROJECT!!! HYDROYLEKTRIKI S.A. PROJECT DATA Renewable Power Source Environmental Friendly Landscape remains the same Environmental Education New Working Places E = 3.980.448 KWh/year Local Population stays Agro-tourist development motives VIABLE PROJECT!!!

VIABILITY CONTROL - EVALUATION Construction Cost = 901.000 € Construction Duration = 2 years Economic Lifetime = 19 years Inflation trend = 2% - 4% Maintenance Cost 1% Operation Cost 7% DATA attractiveness IRR = 15-19% viability in 2000, the project was awarded by the Center of Renewable Energy Resources as the best innovative initiative among the Greek local authorities

PPP Conclusions 1. Legislative Framework and Empowerment of the Local and Regional Authorities 2. Capacity Development at National, Sectoral and Regional Level 3. Compatibility with Structural Funds Regulations and National Co-financing Procedures 4. Establishment of an Independent Authority for Conflict Resolution 5. Assistance in the PPP drafting phase