1. TRACECA TRANSPORT
Zurich Jan. 2011
B.N. Zenouzi

2. Execution and Build up Plan Back up Business Plan
TRACECA , Transportation Company
Main Business Plan
Execution and Build up Plan
Back up Business Plan
TRACECA TRANSPORT

3. Transport Corridor Europe-Caucasus-Asia (TRACECA)
Global Trade / Transportation
Transport Corridor Europe-Caucasus-Asia (TRACECA)
To enhance European export to CIS countries, rules, roads, international role
and many infrastructure issues need development so EU initiated TRACECA.

4. EU Financed TRACECA Armenia Azerbaijan Bulgaria Georgia Kazakhstan
Kyrgyzstan
Moldova
Romania
Tajikistan
Turkey
Ukraine
Uzbekistan
Turkmenistan
Iran

5. Trade Volume in TRACECA Excluding EU
717 B$ Regional Trade Today, ... T$ tomorrow
Needs Quick Development in Transportation

6. Road Transportation will increase from 15 to 30 Billion Euro till 2030
Market Volume and Growth
Road Transportation will increase from 15 to 30 Billion Euro till 2030
Rail Transportation will increase from 30 to 100 Billion Euro till 2030

7. MAY 2009, IDEA project started
Transport dialogue and interoperability between the EU and its neighboring countries and Central Asian countries
EU grant for a 3 years project to obtain a sustainable, efficient and integrated multi–modal transport system in the TRACECA region

8. USA and TRACECA
USA has 2000 Billion Ton-Km freight transport and TRACECA (without EU) has almost the same USA has it’s most big Multi-state transportation company with more than 46,000 Trucks but TRACECA no multi-national.
Mode of intercity freight transport
Ton-Km (millions)
Air
25,170
Truck
2,069,322
Railroad
2,774,043
Domestic water transportation
946,042
Pipeline
1,446,098
TOTAL U.S. Ton-Km of freight
7,260,674
Source: 2005 estimates by the Bureau of Transportation Statistics
No. of Truck
Grade
46,874 1
45,665 2
25,087 3
8,807 4
5,193 5
3,305 6
2,150 7
2,031 8
1,500 9
1,280 10
1,000 11
965 12
726 13 51 14

9. Transportation Plan
3 sub-regions was defined as A, B, C. Accordingly, possible routes of transportations are named as follows:

10. Transportation Plan
• According to this routs trucks dedicated to each rout will be as below:

11. Economical analysis Investment Loan Income
Pre operation costs: (invested) , Euro
Fleet start up cost ,000, Euro
Truck buying rate , Per month
Buying duration Month
Truck and trailer price , Euro
Loan
Truck leasing price , Euro
Total number of payments Month
Installment payment , Euro/month
Income
Transport service price Euro per Ton*Km
Average annual traveling , Km
Average Cargo chargeable weight Ton
Truck full load ratio %
Truck Gross annual income , Euro

12. Economical analysis Expenses Note: Fund Can be supplied by Financer or
Fuel consumption liter/100Km
Fuel price Euro/liter
Lubricant consumption liter/15000Km
Lubricant price Euro/liter
Maintenance(Tires,…) Euro/month
Tracking system Euro/truck/month
Depreciation , Euro/truck/month
Driver Income Euro/driver/month
Rent and Staff , Euro/month
Insurance Euro/truck/month
Corporation Tax %
Note: Fund Can be supplied by Financer or
Credit so we can by funds ourselves

13. Economical analysis IRR= 38% Year Investment cash flow (1,490,500,000)
(1,490,500,000) 1
254,740,263 2
677,770,749 3
762,060,611 4 5 6 7
738,266,175 8
697,739,554 9
689,800,962 10
689,926,962
IRR= %

14. Execution and Build up Plan Back up Business Plan
TRACECA , Transportation Company
Main Business Plan
Execution and Build up Plan
Back up Business Plan
TRACECA TRANSPORT

15. 7 Business Area Management
Basic (Top level) Organization Chart
Management
Board
7 Business Area Management
Internal Sales
External Sales ……
Administration and
EU Lobbying
Planning
Finance Man.
Quality Man.
HR Man.
……..
Transportation
Marketing & Sales
Project Managers
…….
14 Countries
Representatives
Local Transport
Customs Affair
Cross border Transit
…..

16. Risk Matrix Risk Type Mitigation Pre-completion - Cost over-runs
- Delays
(a) Fixed price turnkey contracts
(b) Warranties / penalties / incentives
(c) Fixed project specification
(d) Strong contractors
Post-completion
- Revenue forecasts
- Revenue build-up
- Operating costs
- Management failure
(a) Committed supply contracts
(b) Committed off-take contracts
(c) Strong operators
(d) Performance guarantees
Technical
- Performance
- Environmental
- Safety
(a) Warranties
(b) Proven technologies
(c) Public consultation and approval
Financial
- Structure: debt/equity ratio,
eg. 75/25
- Structure: return on capital
- Structure: risk / reward ratio
- Foreign exchange
- Interest rates
- Debt service cover
- Taxation
(a) Equitable ROE, (
eg %)
(b) Acceptable cover ratios (
e.g )
(c) Escrow and reserve accounts
(d) Dividend constraints
(e) Loan syndication
(f) Insurance / financial derivatives
(g) Standby funding arrangements
Legal
- Regulatory framework?
- Concession law?
(a) Experienced lawyers.
(b) Clear, simple documents
Political
- Regime stability
- Force
majeure
aggt.
- Political intervention
(a) Clear regulatory regime
(b) Investment insurance
(c) IFI support

17. Project Structure and risks
Political and Macroeconomic Risks
FX Risks and Refinancing Risks
Shareholders
Regulatory Risks
Granting
Authority
Lenders /
Bondholders
Shareholder’s Agreement
Concession Agreement
SPV
Project
Company
Operator
Services
Purchaser
Operation & Maintenance Agreement (O&M)
Purchase Agreement (e.g., Truck or FMS purchase agreement)
Performance Risks
Construction Contracts
Regulatory and Performance Risks
Construction
Contractor
Raw Material
Supplier
Supply Agreement (e.g., Fuel supply agreement)
Completion Risks

18. Lead Arranger and Loans
Project Map
EU + 14 Countries
Customers
Operators
Governmental
Major Public
Grants,
Licenses … . Etc.
Drivers
Misc…
Major Private
Management
Manufacturers
Project Sponsors
Sales
Trucks
Manufacturers
Advisors
BA Managers
Technical
Software
Contractors
Legal
Communication
Investors
Financial
Political
Maintenance
Operators
Lead Arranger and Loans
Bonds and Insurance
Equity and Mezzanine
Bank 1
IFI 1
Technical Risk
Financial Risks
Equity 1
Mezzanine 1
Bank 2
IFI 2
Commercial Risk
Environment
Equity 2
Mezzanine 2
IFI3
Equity 3
Mezzanine 3
Political Risks
Force Major

19. Model for TRACECA with 7 Business Units
TRACECA provides
Loads to the Drivers
Intermodal Logistics Company
TRACECA is insurance broker for trucks insurances
and freight insurances
Truck suppliers provide
trucks and driver services
Insurance Company
Truck Suppliers
TRACECA provides
Less expensive
fuel and lubricants
TRACECA provides
Less expensive
Tires and spares
Monthly Payments
TRACECA provides FMS to the Drivers
and control the trucks
Fleet Management System
Lease Company
TRACECA checks the drivers and ask for guarantee for monthly lease payments
TRACECA sells trucks
30/70 Ownership 15% Cash Deposit
Monthly Lease Payments
Drivers from TRACECA Region
Provides credit or cash to purchase Trucks

20. Different Agreements Implementation Agreement Concession Agreement
Construction Contract
Operations Contract
Maintenance Contract
Raw Materials Supply Contract
Sales Purchase Contract
Special-Purpose Company Documents
Share Subscription Contracts
Loan Agreements
Inter-creditor Agreement
Escrow Account / Trustee Arrangements
Insurance
Licenses; Permits; Bills & Decrees
=> Transparent Contract Management

21. Time Schedule of Building up

22. National Transit operation
First Real Multi National
Armenia
Azerbaijan
Bulgaria
Georgia
Kazakhstan
Kyrgyzstan
Moldova
Romania
Tajikistan
Turkey
Ukraine
Uzbekistan
Turkmenistan
Iran
14 Nations Transportation Company
Will have:
Speedy or Non-Stop Load Transportation
No Local Restriction but enjoys local support and gain.
Access to third country loads.
Almost always busy as a chain member in Transport route.
Less operational cost for transport because of driving home.
Advantage of knowing local roads and rules.
Fuel cost saving by Tanks in National Transit Operation.
Several Load check points in borders
National Transit operation

23. Execution and Build up Plan Back up Business Plan
TRACECA , Transportation Company
Main Business Plan
Execution and Build up Plan
Back up Business Plan
TRACECA TRANSPORT

24. TRACECA 7 BA’s

25. System Supplier + Operator Local Supplier + Operator
BA - Financial
BA will carry out:
Cross-border leasing in eligible countries.
Sustainable growth to Rail, Ocean and Air Transport.
Contract signed by authorities, in one country only, it Creates 437 M€ Cash, 649 M€ profit and local root.
Insurance
CCC Austria = Owner
Banks
IFI
System Supplier + Operator
Any Eligible country
Local
Insurance
Local Banks
Local Supplier + Operator
CCC Country = Owner
TRACECA TRANSPORT
Leasing Contract
Monthly Leasing Payments
Advance received
€ ,272,727
Operation Margin
€ ,355,117
Customs charges
-€ ,000,000
Total Income
€ ,627,844

26. BA – Vehicles
BA will carry out:
Assembling and Repair in eligible countries.
Reduce cost of import and sales at those countries.
Will cover all after sales services for own country and neighbors.
Will provide trucks for replacements so non-stop load transport.
Save 400 Million € customs cost in BA Finance + Totally new business with cash, profit and local strength.
TRACECA TRANSPORT

27. Creates 100 M€ p.a. extra profit and NEW business.
BA - Logistics
BA will provide:
Strong Link with global forwarders as external forwarding.
Know-how and recognition as international freight forwarders
Develop BA to act as Internal Multi Modal forwarder
Serving the market as Multi Modal Forwarder/Carrier
Creates 100 M€ p.a. extra profit and NEW business.
External Forwarders
TRACECA
Freight Owner Destination
Freight Owner Origin BA
Logistics
TRACECA
Freight Owner Destination
Freight Owner Origin
Good Communication,
High quality service,
Low price,
On-time delivery

28. Manage 250 M€ p.a. cost + New Business.
BA – Fuel Cards
BA will provide:
Saving in 255 M€ (10%)
Favourable payment conditions
Manage 510,000,000 liter of fuel through own supply save 10% more.
Establish Fuel distribution channel in eastern countries of TRACECA.
Own Mobile fuel distribution network in future.
Manage 250 M€ p.a. cost + New Business.

29. BA – Tires, Spare parts and Maintenance
BA will provide:
Reduced cost as Whole buyer.
Will manage spare parts and p.a. tires consumption.
Will supervise the maintenance to ensure service continuity.
Can produce Tire production plants to create extra added value.
Manage 43 M€ p.a. maintenance cost and ensure availability and quality.

30. BA – Insurance Save margins of 36 M€ p.a. Insurance cost
BA will provide following step by step:
Broker Function so save broker margin
Will collect enough capital to be insurer so save insurer margin.
Will develop business to insure sever but covered risk. (Export credit risks … etc.)
Will make lobbying with EU to serve TRACECA risks.
Will develop together with BA – Finance a Bank in Austria.
Save margins of 36 M€ p.a. Insurance cost
Develop business to individual insurer and Bank.

31. 10 -15% of benefit + Enhanced Cargo Services
BA – Fleet Management System
BA will provide:
Operational cost saving
Smooth up daily operation for fast transport
An ERP with Integrated data
GPS Navigating and Tracking so better accessibility
10 -15% of benefit + Enhanced Cargo Services

32. BA – FMS services Improved dispatching Increased route adherence
Optimized routes
Reduced mobile costs
Reduced overall costs
Proactive traffic jam action
Better managed driver hours
Proof of visit and Faster invoicing