1. © OECD A joint initiative of the OECD and the European Union, principally financed by the EU Mag. Martin Oder, LL.M. OECD/SIGMA Concessions and Public Private Partnerships Case studies from technical infrastructure sectors - highways sector Ankara, 10-11 March 2008

2. © OECD A joint initiative of the OECD and the European Union, principally financed by the EU Case study – Highways l Austria: A5 Eastern region – concession model -Preparatory stage -Decision-making process -Scope and shape of project -Time schedule -Main procedural and contractual issues

3. Preparatory stage – shaping of first road PPP project on political level Working group on road infrastructure financing 2002 (Interest groups) Ministry of Transport, Innovation and Technology – Steering Committee PPP 2003 (with help of external experts) Discussion on most suitable model: IPP vs. concession model procurement lawScope of procurement financing acceleration risk transfer debt Ministry of Transport – Steering Committee PPP Oct. 2003 CONCESSION MODEL Resolution of the Council of Ministers Dec. 2003

4. Scope of project First road PPP-project in Austria Estimated construction costs € 800 m Project size: too big in terms of seize and value? 4 EIA procedures for different parts of road: different planning and approval status Financing issues: ASFINAG financing vs private financing Bankability - 51 km motorway, 1 tunnel (2km)

5. Project leader Infrastructure working group Economics Financing working group Law working group Ministry of Transport – MoF Management board of ASFINAG Core technical planning team Ostregion Advisors & experts Advisors & experts Project setup ASFINAG Supervisory board Advisors & experts

6. Task sharing within the project team InfrastructureFinancialLaw Functional output specification for construction, operation, management and maintenance Traffic forecasts as basis for revenue models Concession model Risk allocation Risk valuation Business plans Revenue models Econ. planning tools Tender evaluation Award procedure Concession contract Interface to BMVIT and authorities EXTERNAL CONSULTANTS Interdisciplinary Haslinger / Nagele & Partners Doralt – Seist - Csoklich KPMG Technical consultants DonauConsult, Zottl & Erber ZT GmbH

7. Project structure – Concession model sponsors (equity) lenders (debt) Concession aire (SPV) planning & construction maintainance & operation Art of Association Loan bond subcontractors concession contract Republic of Austria Direct Agreement Financing through debt (90%, loans and bonds, EIB & Dt Bank) and equity (10%) Remuneration upon completion and opening of road to traffic through cash- flows from project only Non-recourse project (no contingent liabilities on sponsors) Concession lifetime: ~33 years ASFiNAG: no stake in SPV, only monitoring and control function Fair risk allocation

8. Time schedule May 05 Determination of „preferred bidder“: 8 months Time limit for submission of bids: 6 months Preparation period: 12 months - Planning, EIA procedures - Conception of model: definition of project scope, determination of financing model,...... - Preparation of prequalification documents (PQQ, project information brochure) - Preparation of tender documents (esp technical output specifications, financial/business requirements, draft concession contract) Negotiations with all three bidders submission of requests to participate by candidates Award decision timeline (not according to scale) financing documents by preferred bidder: 2 mo Selection of 5 candidates 01.09. 01.12. 01.09.2005 2006 01.01. 2004 Application period 3 months

9. © OECD A joint initiative of the OECD and the European Union, principally financed by the EU Main issues during negotiations l Procedural issues -Alleged discriminatory effect of different financing solutions (bond vs loan) on comparability of LAFO -Submission of complete financial documentation by preferred bidder only and point of time of publication of award decision l Contractual issues -Changes in law and additional remuneration -Relief / force majeure events and their consequences -Payments in cases of early termination (bond vs loan) -State guarantees -Direct agreement financing with lenders, esp liabilities of lenders upon step-in

10. © OECD A joint initiative of the OECD and the European Union, principally financed by the EU Thank you for your attention! Martin Oder HASLINGER / NAGELE & PARTNERS Am Hof 13, A-1010 Vienna Phone +43/1/718 66 80-616 Fax +43/1/718 66 80-30 email: office.wien@haslinger-nagele.com