1 Overview and Outlook for PPP Projects in Vilnius Mrs. Ruta Vainiene Adviser to the Mayor of the City of Vilnius November 22 nd, 2006 Vilnius

2 Contents: Region overview……………………………………...p. 3-5 Reasons for the PPP……… p. 6 Present and future projects………………..…….p Conclusions.…….…………………………………....p

3 - According to Financial Times: Vilnius and Kaunas Region –European Region of the Future 2006/07 Vilnius – Future City of the Baltic Region 2006/07 (European Cities & Regions of the Future, Financial Times fDi competition) - Standard &Poors: credit rating BBB+ / Stable (July 2006) - European Capital of Culture Host of European Mens Basketball Championship 2011 fDi editor Courtney Fingar, Mayor of Vilnius Arturas Zuokas and Saulius Lukosius, head of strategic planning for Kaunas municipality at the award ceremony We are:

4 Reasons for PPP in Vilnius: Modern way to solve old problems Estimation of the projects viability A viable alternative where privatization is impossible Out-of-budget liabilities

5 Long term lease of Vilnius heating networks An urgent need to renovate Citys heating system in order to make the heat consumption more efficient - About 163 mln. EUR to be invested to the heat system of Vilnius during 15 years; - More than flats administrated in Vilnius region; - More than 2880 heating stations renovated since 1 of February 2002, 76 mln. EUR invested. - The city receives 10 mln. EUR rent payment; - The lowest heat price in Republic is 0,03 EUR/kWh without VAT. Residents of Vilnius city save upto 1,7 mln. EUR annually

6 Vilnius Entertainment Park – the newest entertainment center Construction of Siemens Arena allowed Vilnius to host European Mens Basketball championship in 2011 Investments in to the Park: I Stage - SIEMENS Arena (capacity upto seats): upto 19,5 mln EUR II Stage - Water entertainment park: up to 13 mln. EUR III Stage Ozas family entertainment and shopping centre – upto 40 mln. EUR Municipality has invested into infrastructure - 2 mln. EUR Planned investments for period – upto 8,7 mln. EUR

7 Project was initiated in order to reform one of the most complicated social spheres - Concession period – 25 years - Private investment –4 mln. EUR - Tenders started in August and September Health care services remain free of charge (at current level) Concession of the health care services in two Vilnius clinics

8 80 % of schools and 99 % of kindergartens buildings are in poor condition - 15 educational institutions in the pilot project - Expected private investment – over 30 mln. EUR - PPP scheme on public procurement basis for 25 years period Renovation and long-term maintenance of Vilnius educational institutions

9 Modern Tram line Solving traffic jams and ecological problems in the city centre; part of the modern European city image up to 100 mln. EUR investments, one line - 12 km length Concession period – 25 years Contribution of the City – percent of CAPEX Availability of EU support - questionable

10 HALĖ market-place Newly renovated old market place with a new modern equipment and an expanded parking-plot Market place leased for 20 year period Opened on 10 th May, 2006 Investor: Invests over 6 mln EUR Reconstructed and installed parking-lot Operates the market Pays annual fee to Municipality – 320 thous EUR

11 PPP in waste treatment: Site for construction waste and Site for medical waste Until 2003 there was no such modern construction waste treatment site, thus causing huge environmental problems for the city Land leased for 14 year period Investor: Invested over 1 mln EUR Operates the site Pays annual fee to Municipality – 5 percent from income (52 thous. EUR in 2005) An urgent need to solve the medical waste treatment in the region and the country Land leased for 25 year period Opening in Summer 2006 Investor: Invested over 3 mln EUR Operates the site Pays fixed annual fee to Municipality 43,5 thous. EUR

12 Conclusions: More than the possibility to have funds out of the balances, increase them and fit in to the debt limit Better management – better services Real responsibility Risk transferred Information asymmetries avoided Expanding private initiative Educational role

13 PPP is: Best or second best solution (?)

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