1. 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 Concessionaire

2. PIARC - Durban 2003 - P.P.P in S.A. PPP: Transfer of Risks, Rights & Obligations PUBLIC SECTOR HIGH PRIVATISATION OUTSOURCING PRIVATE SECTOR LOW HIGH PPP

3. PIARC - Durban 2003 - 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)

4. PIARC - Durban 2003 - 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

5. PIARC - Durban 2003 - 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

6. PIARC - Durban 2003 - 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

7. PIARC - Durban 2003 - 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

8. PIARC - Durban 2003 - P.P.P in S.A. Transfer of Risks TECHNICAL : Design, Construction, Maintenance, Upgrading Concessionaire Overloadingshared Competing Roads shared

9. PIARC - Durban 2003 - 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

10. PIARC - Durban 2003 - 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

11. PIARC - Durban 2003 - 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

12. PIARC - Durban 2003 - 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

13. PIARC - Durban 2003 - 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

14. PIARC - Durban 2003 - 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

15. PIARC - Durban 2003 - 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

16. PIARC - Durban 2003 - 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 230000 vehiclesAverage Daily Traffic 230000 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 13300 new jobs created > multiplier effect 613300 new jobs created > multiplier effect 6 R 108 mio for community upliftmentR 108 mio for community upliftment