1. Skopje Tram, Investors Roundtable 18 January 2012

2. 2 Agenda ■10:15 Opening words (speaker: Szabolcs Vona, Vialto & EC Harris) ■10.30Greeting participants by the Mayor of Skopje ■10:45 Introduction of Potential Investors (speakers of the respective companies – 5 minutes each ) ■11:45 Coffee break ■12:00 Introduction of the recent developments with Skopje Tram Project (speaker: Csaba Orosz PhD, Vialto & EC Harris) ■12:20 Questions and Answers ■13:30 Closing words, conclusions (speaker: Kristijan Gjorgjievski – Vialto & EC Harris)

3. Skopje Tram, Project Introduction Csaba OROSZ PhD |18 January 2012

4. Developments in the past year ■December 2010 – The City of Skopje engaged Vialto Consulting and EC Harris as consultants to do the following tasks: –Phase I - Preparation of a Study for a concession project for development and introduction of light railway system for passenger transport in the area of the City of Skopje. The study includes: Traffic - technical analysis Economic and financial analysis Legal analysis Possibilities for development –Phase II - Preparation of Tender Documentation and model contract, evaluation criteria and animation of potential investors; 4

5. 5 Planned Tram Network (Feasibility Study 2007) Line 1 Line 1 alternatives Line 2 Line 3 Line 4

6. 6 Proposed Versions

7. 7 Selected Version Version 2a4 - Novo Lisice - Centar - Gjorce Petrov

8. 8 Investments and Operational Cost Version 2a - Novo Lisice - Centar - Gjorce Petrov No.ItemUnitQuantity Cost per unit Total cost [1000 EUR] ABCDEF 1Investment cost 2Track infrastructuretrack km24.22 40058 080 3Catenarytrack km24.260014 520 4Depot (only at East, at Novo Lisice)each115 000 5Vehicleseach221 90041 800 6Subtotal1000EUR 129 400 7Technical reserve1000EUR10% 13 730 8Provision for inflation1000EUR5% 5 865 9Provision for exchange rate1000EUR5% 5 865 10Total Investment Cost 1000EUR 155 280 11Operational cost ( per year ) 12Vehicles running (O&M) costkm1 665 4440.0046 662 13Infrastructure maintenancetrack km24.2501 210 14 Total Yearly Operation+ Maintenance Cost1000EUR 7 872

9. 9 Estimated Passenger Flow (Option 2a4, Peak Hour)

10. 10 Estimated Tram Passenger Flow ■„Corridor” approach (change to tram) –80% of bus passengers (80 pax per bus) –20% of car passengers (1,5 pax per car) ■Daily passengers assumptions –w = 15% (peak hour factor) –growth factor: 1% per year –diameter shaped lines ■Yearly passengers assumptions –250 workdays, 115 holidays –holiday = 0.5 × workday

11. 11 Version 2 basic data Line num. TrackLengthHead- way [min] Servic e per day Present traffic Estim a-ted pax 1 Novo Lisiche – Centar – Gjorche Petrov 12 km 33 min 3 6 10 228 15 bus 1301 car 1350 pax 44 bus 1139 car 3158 pax 60 000 pax/workday (3158+1350) × 2 / 0,15

12. Ticket revenues 12 ■ It is expected that the income from ticket sales at the first year of operation will be 12.7 M Eur per year plus 1.0 M Eur as a compensation for discounted tickets. Distribution among pass typesTram Annual tickets27,6% Student monthly32,0% Pensioner monthly3,1% Other monthly17,3% Single19,1% 10 rides0,9% Total100,0%

13. Public Subsidies ■Up to 10 % initial investment subsidy - selection criterion in the tender ■optimum operative subsidy/availability payment - selection criterion in the tender 13 Starting year Ending year Annual amount PV (million EUR) Ticket price: 1,0 EUR Operative subsidy I483.6 Operative subsidy II9351.1

14. Public Subsidies 14

15. Financial Indicators of the preferred option (2a4) 15 Financial Indicators (ticket price 1 Eur) Net present value 75,69 M Eur Benefit – Cost Ratio(BCR) 1,208 Net discounted profit (NPV – PV of equity investment) 60,16 M Eur Interest rate on equity 11,07% Total Subsidy PV 81,46 M Eur

16. The Study - Conclusions ■It is financially feasible to introduce the Tram as an environmentally friendly high capacity transport mode in the City of Skopje; ■Among line options investigated, Line 1 proved to be most beneficial and financially feasible (12km long trunk line); ■Later further development is possible (extension of line 1,additional lines 2 and 3); ■ Sustainable public subsidies needed 10 % initial investment subsidy optimal operative subsidy/availability payment ■Need for amendments in legislation, due to a introducing a new way of transport ■Additional measures: 1.Modification of local transport strategy. 2.Reorganisation of bus services 16

17. Next steps ■Analysis of the feedback from the round table and possible implementation of investors’ initiatives. ■Expected tender announcement – Q2 2012 ■Contract Award - Q4 2012 17 Pre- qualification 45 days Preparing Shortlist 15 days Tender Applications 60 + 30 days Tender Evaluation 30 days

18. Questions and Answers

19. Closing Words, Conclusions Áron NEMES | 18 January 2012

20. Thank You for Your Attention!

21. 21 PPP (DBFOT) Structure