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2. 2 From tolling to availability payments. PPP in the Hungarian motorway development Ferenc Tóth Concession director

3. 3 Content History of the Hungarian tolling History of the Hungarian tolling Status of the motorway network Status of the motorway network Development Plans Development Plans Ongoing works Ongoing works PPP sections PPP sections PPP model PPP model Legal background Legal background

4. 4 History of Hungarian tolling 1994, M1 the first tolled motorway, ELMKA 1994, M1 the first tolled motorway, ELMKA 1996, M5 motorway a concession road toward Yugoslavia 1996, M5 motorway a concession road toward Yugoslavia 1996, State owned toll company : ÉKMA 1996, State owned toll company : ÉKMA 1999 vignette system 1999 vignette system 2003 development program in Act 2003 development program in Act 2004 destruction of the last toll system 2004 destruction of the last toll system 2005 motorway development with PPP 2005 motorway development with PPP

5. 5 Status of the motorway network The length of the network is ~650 km in total The length of the network is ~650 km in total ~540 km motorway ~540 km motorway ~110 km expressway ~110 km expressway Density is ~7 km/1000 km 2 Density is ~7 km/1000 km 2 Radius (capitol centralized) network Radius (capitol centralized) network M5 motorway is operated in PPP scheme M5 motorway is operated in PPP scheme Budapest- National border (Röszke) 156 km Budapest- National border (Röszke) 156 km concessionaire is AKA Rt. concessionaire is AKA Rt.

6. 6 Motorway development plan of Hungary

7. 7 Works in progress Ongoing constructions: Ongoing constructions: M3 Görbeháza-Nyíregyháza (39 km) M3 Görbeháza-Nyíregyháza (39 km) M3 Nyíregyháza bypass (8+16 km) M3 Nyíregyháza bypass (8+16 km) M35 Görbeháza-Debrecen (35 km) M35 Görbeháza-Debrecen (35 km) M35 Debrecen bypass (9+4 km) M35 Debrecen bypass (9+4 km) M6 Between M0-Érd (9 km) M6 Between M0-Érd (9 km) M7 Zamárdi-Balatonszárszó (14 km) M7 Zamárdi-Balatonszárszó (14 km) M7 Balatonszárszó-Ordacsehi (20 km) M7 Balatonszárszó-Ordacsehi (20 km) M7 Nagykanizsa-Balatonkeresztúr (35km) M7 Nagykanizsa-Balatonkeresztúr (35km) M7 Ordacsehi-Balatonkeresztúr (26 km) M7 Ordacsehi-Balatonkeresztúr (26 km) M8 between M6-Rd51 (5 km) M8 between M6-Rd51 (5 km) PPP projects PPP projects M5 Kiskunfélegyháza-Szeged (46 km) M5 Kiskunfélegyháza-Szeged (46 km) M5 Szeged-Röszke (15 km) M5 Szeged-Röszke (15 km) M6 Érd-Dunaújváros (59 km) M6 Érd-Dunaújváros (59 km)

8. 8 PPP motorways M5 motorway M5 motorway Concession contract signed in 1994 Concession contract signed in 1994 concession rights for 35 years concession rights for 35 years design, build, operate and finance tasks design, build, operate and finance tasks AKA Rt. is the Concessionaire AKA Rt. is the Concessionaire M5 used to be real toll motorway M5 used to be real toll motorway from March 2004 the vignette system has been applied from March 2004 the vignette system has been applied toll booths are being demolished toll booths are being demolished In December 2005 the Phase 2 section opened (46 km) In December 2005 the Phase 2 section opened (46 km) In March 11th 2006 the Phase 3 section opened (15 km) In March 11th 2006 the Phase 3 section opened (15 km)

9. 9 PPP motorways M6 motorway M6 motorway invitation for Tender under concession published in February 2004 invitation for Tender under concession published in February 2004 concession rights for 22 years concession rights for 22 years design, build, operate and finance tasks design, build, operate and finance tasks Tender was open to domestic and international bidders Tender was open to domestic and international bidders Three Tenderers were short-listed Three Tenderers were short-listed Contract has been endorsed with M6 Duna Autópálya Konzorcium Contract has been endorsed with M6 Duna Autópálya Konzorcium Planned opening for operation : 2006 Planned opening for operation : 2006

10. 10 PPP model Payment mechanism Payment mechanism revenues from vignette are collected by the State revenues from vignette are collected by the State monthly availability fee to be paid to the Concessionaire with possible deduction of monthly availability fee to be paid to the Concessionaire with possible deduction of temporary unavailability temporary unavailability safety related problems safety related problems failure to meet of operational requirements failure to meet of operational requirements further payments can be made further payments can be made linked to the volume of HGV linked to the volume of HGV payments being indexed to inflation and exchange rate payments being indexed to inflation and exchange rate

11. 11 PPP model Risk allocation Risk allocation Risk Allocation Matrix is provided to Tenderers Risk Allocation Matrix is provided to Tenderers Design Risks Design Risks Construction and Development Risks Construction and Development Risks Availability and Performance Risks Availability and Performance Risks Maintenance/Life Cycle Risks Maintenance/Life Cycle Risks Variability of Revenue Risks Variability of Revenue Risks Residual Condition on Hand-back Residual Condition on Hand-back Other Risks Other Risks Risks are distributed between Public and Private sector with the alternative to share them Risks are distributed between Public and Private sector with the alternative to share them

12. 12 Legal background Act of 1991. XVI ( „about concession”) Act of 1991. XVI ( „about concession”) Act of 2003. CXXVIII („about public interest and development of expressway network”) Act of 2003. CXXVIII („about public interest and development of expressway network”) Act of 2005. LXV ( supplement to Act 2003. CXXVIII) Act of 2005. LXV ( supplement to Act 2003. CXXVIII) 317/2005 Government Decree „about Program roads” (expressways to be financed from private sources) 317/2005 Government Decree „about Program roads” (expressways to be financed from private sources)

13. 13 Thank you for the attention! Contact info: toth.ferenc@nart.hu @nart.hu Tel: +36 1 436-8171 Fax: +36 1 436-8055

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