Investment Rail and Road Portugal ASECAP António Ramalho, CEO EP/REFER Lisbon, 29 May 2015

Investment Model – 10 years In the last 10 years the State has invested 1/3 in railways and 2/3 in highways This trend deepened in recent 5 years: 25% - 75% This investment volume has significantly improved our international competitive position Road Network Q Global Q Road Q Rail 2008 23º 14º 25º 2014 12º 2º Rail Network Source: World Economic Forúm The Global Competitiveness Report 2014 - 2015 However the investment hasn't stopped the traffic reduction and the unbalance between modes

EP REFER Financing Model 14% Beneficiary 1% 29% 5% 62% (473M€) User 17% Beneficiary 29% Negative Dividend 53% (958M€) Equity (FC) 1% REFER User 19% Beneficiary 5% Negative Dividend 62% (473M€) Equity (FC) 14% Total=1.831M€ Total=754M€ Non-Sustainable Model Weak Integrated Planning Weak Economic Performance However there is investment capacity Funding Gap 7.2M 3.4M

The Road to sustainability 2012-2014

The measures introduced between 2012 and 2014 reduce the peak net debt of 27 B€ (2035) to 7 B€ (2029), and the Net Debt / Ebitda of 21x to 8x(1)… 26,7 B€ 21,0X 7,8X 7,4 B€ (1) October 2012 business plan adjusted to the current projection tolls

… due to the renegotiation of PPP's, the strong reduction in operating costs and the confidence of the Shareholder, realized on share capital increase (2)(3) Reporting Year: 2035 Billion € Comparison of October 2012 business plan adjusted and the last EP business plan (Fev15) The calculation of savings includes the capitalization of interest

The New Challenge 2015-2020

4. Capabilities valuation An Intermodal Revolution 1. System organization 3. System funding Strategic Planning Merger of the Representations Integrated Regulation Common Procurement Transfer of Dark-Green Funds Access integration and value capture Asset optimization 2. System operation 4. Capabilities valuation Operational Planning Single Corporate Management Integrated Management of supply Port-Interland expansion (co-modality) Creation of Intermodal Competence Centers Integrated Internationalization Refunding of conservation engineering

1. A New Model for Concessions 3. A New Business Approach A New Model of Management 1. A New Model for Concessions 2. A New Set of Priorities Motorways not Roads Risk should be shared not transferred Commercial Risk allocated to Private, Financial Risk allocated to Public Who pays defines the selling proposition To investors: liquidity To the grantor: sustainability 3. A New Business Approach Sharing risks Alignment of incentives

Priority to Rail Investment

Priority to Asset Valuation Revenue Increase Usage Fee Concessions Cost reduction Procurement CSI Asset valuation Tolls Headcount Facilities Non-core Business Net Debt 2014 Base Scenario Ambitious Scenario 2040

Priority to Road Maintenance Evolution of the road fatalities in Portugal PRN2000 - 85% concluded Portugal: -48% (-521 VM) RR Nacional: -58% (-390 VM) Rede EP, SA: -61% (-354 VM) Rede Municipal: -31% (-131 VM 2005/2012 86% 55% 98% 100% Pavements Maintenance Bridges Maintenance

Atlantic Corridor Priority to International Rail Freight Priorities Conclusion - Corridor Sines- Caia/Madrid Design and Building -Corridor Aveiro - Vilar Formoso/Salamanca Atlantic Line Sines-Vigo Interoperability Iberian Plan - UIC Gauge + ERTMS Electrification Circulation of trains with 750 m Increase capacity for 1.400 tonnes with simple traction in national and international freight connections Non-electrified sections Lack of capacity Change of gauge Limitations of hauled load

antonio.ramalho@estradas.pt