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Public Private Partnership
for Arenas and Airports

Public Private Partnership
for Arenas and Airports

Rita C Toscano - Architect

TÜV Rheinalnd Brasil Ltda

Summit

Summit

  • Initial phase: 2005-2009 – few projects, low interest of investors
  • Since 2010, more projects more interest of the investors
  • Main tool for infrastructure constructions in Brazil
  • Three types: regular, admnistrative and sponsored

Advantages for the government

Advantages for the government

  • Decentralize the investments for private companies (“concessionaries”)
  • The government acts as supervisor of the services

Areas covered by PPPs

Areas covered by PPPs

  • Economic infrastructure:
  • Energy
  • Gas
  • Roads
  • Railways
  • Ports
  • Airports
  • Social infrastructure:
  • Schools
  • Hospitals
  • Prisons

Studies for PPPs

Studies for PPPs

  • Engineering project
  • Project viability
  • Operational modelling
  • Impact and risk assessment
  • Legal fundament analisys

Demands of the contract

Demands of the contract

  • Contracts must be above R$ 20 millions
  • 5 to 35 years
  • Payment only due when all construction and services are finished
  • Monthly evaluation by the CGP – Comite Gestor da Parceria (Management Comitee)
  • Penalties for both the company or the government in case of payment default
  • Value update
  • Performance criteria
  • Execution warranties
  • Investment + service

Many levels

Many levels

  • Federal – follows laws and regulations applied through the country
  • State: - the states can define their own demands in contracts

Administrative PPP

Administrative PPP

Administrative concession is one of the forms of Public-Private Partnership, concerning to the context of general interest service to be provided by the private partner, which will  be not possible or convenient to charge user fees for these service. In such case, the reward of the private partner is overall from regular inflows of budgetary funds from the public sector which the contract of concession has been signed.

Regular PPP

Regular PPP

  • Regular concession is a form of Public-Private Partnership in which the private partner investments to provide Public service are paid by the user fees.
  • In other words, the user fees reward directly private partner investments. Systematic budgetary contributions are not request from the Public sector.

Sponsored PPP

Sponsored PPP

  • Sponsored concession is one form of Public-Private Partnership which user fees are not sufficient to offset the investments made ​​by the private partner.
  • Thus, the government, in addition to the user fees, complements the private partner award through systematic budget funds (public installments).

PPP for the arenas

PPP for the arenas

  • Different cases in different places
  • BNDES budget for investments in sustainability
  • Aprox. US$ 250 million in average for each arena

Specific cases

Specific cases

  • Private arenas: Corinthians, Gremio, etc
  • BNDES investments with payment along 20 years

World Cup Infrastructure

World Cup Infrastructure

  • Not all projects are to be sponsored by the government
  • Transparency is a request in the processes

World Cup 2014 – Arenas

World Cup 2014 – Arenas

Arena Castelão - Ceará

Arena Castelão - Ceará

  • Retrofit, extension, adequation, operation and maintenance
  • Parking building
  • Maintenance of the headquarters of Secretaria do Esporte
  • Administrative PPP
  • Duration: 8 years

Arena Fonte Nova - Bahia

Arena Fonte Nova - Bahia

  • Reconstruction and operation
  • Administrative PPP
  • Duration: 35 years

Arena Mineirão – Minas Gerais

Arena Mineirão – Minas Gerais

  • Retrofit, operation and maintenance
  • Administrative PPP
  • Duration: 25 years

Arena Pernambuco - Pernambuco

Arena Pernambuco - Pernambuco

  • Contruction and exploration
  • Adminsitrative PPP
  • Duration: 3 years

Airports in Brazil

Airports in Brazil

  • 118% growth in transported passagers 2003 – 2010
  • Guarulhos, Viracopos and Brasilia are responsible for 30% of passagers, 57% of cargo and 19% of aircrafts
  • All are subject to ANAC (Associação Nacional de Aviação Civil)

Airports

Airports

  • Only three international airports will be privatized by the federal goverment:
  • Campinas - SP
  • Brasilia – DF
  • Guarulhos - SP

Airports in São Paulo

Airports in São Paulo

  • The state of Sao Paulo will privatize:
  • Ribeirao Preto
  • São Jose do Rio Preto
  • Marilia
  • Araçatuba
  • Presidente Prudente
  • Bauru

Objectives for the airports

Objectives for the airports

  • Inhance the aiport infrastructure
  • More efficiency
  • Quality of services

Challenges of the PPPs

Challenges of the PPPs

  • Transparency issues
  • Excess or lack of control
  • Establish a standard of services
  • Social infrastructure still under the minimum
  • Segment regulations
  • Politic risk
  • Administrative/social myopia
  • Accreditation of the partners
  • Under estimated demand
  • Technological risk
  • Not being clear who is the client
  • Not being able to provide garanties

Contacts

Contacts

  • Rita Toscano
  • Tuv Brasil – São Paulo
  • R. Libero Badaro 293 – 28º
  • Centro
  • 11 3514 5849/992028765

World Cup & Olympic Games
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