Level Playing Field & Private Sector Participation in ports

Transcription

1 Level Playing Field & Private Sector Participation in ports BPO Conference - Rønne Victor van Leengoed 4 September 2014 maritime & transport business solutions

2 MTBS: Maritime & Transport Business Solutions Leading Port Advisor in EMEA region International Port and maritime Advisory Firm, HQ in Rotterdam, The Netherlands Specialised in Port Transactions: Preparation & Implementation Global Project Portfolio: EMEA core market Successful MTBS Transaction Ongoing MTBS Transaction Completed MTBS Advisory Project 4 September 2014 BPO Conference 2

3 MTBS: Maritime & Transport Business Solutions Selection of Closed & Ongoing Transactions Greek Marinas and Ports, Greece Transaction Advisor Privatisation of Greek marinas and commercial ports Concessions Sell Side Port of Durban, South Africa Transaction Advisor PPP-scheme Durban Dig-out port Concession Sell Side 4 September 2014 BPO Conference 3

4 MTBS: Maritime & Transport Business Solutions From Strategy to Financing 4 September 2014 BPO Conference 4

5 Level Playing Field Ambition or illusion? Level Playing Field European Port Context: Fairness concept: the game must be played by the same set of rules. All Port Costs should be born by port users 4 September 2014 BPO Conference 5

6 Level Playing Field Port costs in value chain How relevant are port costs in supply chain? PA Port costs (2%-5%) Sealeg (40%-60%) Handling Rail (20%-40%) Far East Eurpoe Level playing field in hinterland transport? Subsidies Tolling Political projects 4 September 2014 BPO Conference 6

7 Level Playing Field With whom are we competing? 530 Mt* Recent key shipping economic developments Recent key political developments 150 Mt 390 Mt Level playing field for European ports? Or is our industry bigger than just EU? 4 September 2014 BPO Conference 7

8 Level Playing Field SECA -Who will serve what part of Europe? Non-SECA AREA Main arterial East-West lane 4 September 2014 BPO Conference 8

9 Level Playing Field and Private Sector Participation Multiple terminals in one port same conditions? Incumbent Entrant: Direct negotiations Entrant: Tender 4 September 2014 BPO Conference 9

10 Level Playing Field Illusion? How to fight tough conditions? 4 September 2014 BPO Conference 10

11 Level Playing Field and Private Sector Participation Private sector participation strengthens public sector Piraeus, Greece, Cosco Pacific (Operational) Since 2007 following privatization: Cosco responsible for quay walls & basin dredging They resolved all strikes, Chinese management Containers in Piraeus / TEU September 2014 BPO Conference 11

12 Private Sector Participation How structure it? Smart compensation structures High Profit sharing Revenue sharing FINANCIAL REVENUES PA Royalty ($/TEU) Royalty ($/TEU) plus volume guarantee Fixed lease fee ($/m2) Fixed lease fee plus financial securities Fixed lease fee plus financial securities assigned to DBFM contractor Upfront fees Low Low (highly variable) CERTAINTY OF REVENUES - PA High (largely fixed) Balance sheet relief 4 September 2014 BPO Conference 12

13 Private Sector Participation How to structure it? Smart port management models Port management model Private participation Regulation Infra Superstruct ure Equipment Labour Nautical services Public service port Zero Public Public Public Public Public Public Tool port Very low Public Public Public Public Private Landlord + Publicprivate terminal Medium Public Public Public Private JV Public Private JV Public Private JV Public or private Public or private Landlord port Medium Public Public Private Private Private Public or private Landlord + DBFM High Public Public & Public or Private Private Private Private 2) private Public PDMC Very high Public Private Private Private Private Private JV Private port Public or Maximum private Private Private Private Private Private 4 September 2014 BPO Conference 13

14 Private Sector Participation New port management models From standard landlord Port Dues Public Port Authority TO Concession Agreement Private terminal Private operator terminal Private operator terminal operator Handling charges / Storage fees Users: Client Client s/ Shipping s/ offtakers lines offtakers Port land Infrastructure Marine Infrastructure Superstructures & Equipment Port management Marine services 4 September 2014 BPO Conference 14

15 Private Sector Participation to Landlord plus DBFM Port Dues DBFM consortium (SPC) DBFM Concession Agreement Public Port Authority TO Concession Agreement Private terminal Private operator terminal Private operator terminal operator Handling charges / Storage fees Users: Client Client s/ Shipping s/ offtakers lines offtakers Port land Infrastructure Port land Infrastructure Marine Infrastructure Marine Infrastructure Superstructures & Equipment Port management Marine services Marine services 4 September 2014 BPO Conference 15

16 Private Sector Participation No port Landlord + DBFM example yet, but DBM in Rotterdam 4 September 2014 BPO Conference 16

17 Private Sector Participation New port management models Landlord plus DBFM Benefits & disadvantages Description Life cycle approach Optimise capex vs. Maintenance Integrated approach Accelerated delivery Risk reduction Flexibility Additional financing costs Reduce interfaces We have succeeded in constructing this phase of Maasvlakte 2 according to schedule and. well inside budget.. ( ) approx. 150 million less expensive than estimated. In DBFM no flexibility due to disciplinary effect In DBM relative flexibility due to System engineering Not additional financing costs in DBM State contribution: EUR 1.25bn Realised in DBM 4 September 2014 BPO Conference 17

18 Private Sector Participation Typical Public Sector Comparator in normal infra DBFM - (200) (400) (600) (800) (1 000) 15%-20% Cost savings (1 200) (1 400) What about financing costs? 4 September 2014 BPO Conference 18

19 Private Sector Participation How to structure it? Smart port management models Port management model Private participation Regulation Infra Superstruct ure Equipment Labour Nautical services Public service port Zero Public Public Public Public Public Public Tool port Very low Public Public Public Public Private Landlord + Publicprivate terminal Medium Public Public Public Private JV Public Private JV Public Private JV Public or private Public or private Landlord port Medium Public Public Private Private Private Public or private Landlord + DBFM High Public Public & Public or Private Private Private Private 2) private Public PDMC Very high Public Private Private Private Private Private JV Private port Public or Maximum private Private Private Private Private Private 4 September 2014 BPO Conference 19

20 Private Sector Participation New port management models Port Development Management Company(PDMC) Draft 18m Capacity 1.2m-3m TEUpa Quay: 1,050m 2,000m Draft 12.5m Capacity 0.4m TEUpa Quay: 400m 4 September 2014 BPO Conference 20

21 Private Sector Participation New port management models Capacity development& Volume growth with PDMC TRANSHIPMENT CAPTIVE/TRANSIT September 2014 BPO Conference 21

22 Private Sector Participation PDMC: Government contributed only 23% of in $400m investment Direct Financing Agreement USD5m cover 1) DP World Djibouti FZCO $44m Shareholders agreements Islamic Financing Syndication $160m 99% cover 1) MIGA PDSA 2) $90m DFI Lenders $103m Government of Djibouti (through DPFZA) BOT Concession Equity contribution DolarehContainer Terminal S.A. Loan agreements, debt contribution Port land Infrastructure Marine Infrastructure Superstructures & Equipment Marine services Port operations, management and maintenance (DP World) 1) MIGA provides cover against Currency transfer restriction, expropriation, breach of contract, war and civil disturbance 2) PAID is transformed from a public entity into a private company limited by shares and will be renamed as PDSA. 4 September 2014 BPO Conference 22

23 Private Sector Participation Other strategic shareholder entering the structure through direct negotiations DPW out? - Competive tender needed DP World Djibouti Islamic Financing FZCO Syndication $160m Direct Financing Agreement CMHI Shareholders agreements SHA & SPA 3) Government of Djibouti (through DPFZA) PDSA 2) $90m BOT Concession Equity contribution DolarehContainer Terminal S.A. DFI Lenders $103m Loan agreements, debt contribution Port land Infrastructure Port operations, management and maintenance (DP World) Marine Infrastructure Superstructures & Equipment Marine services 1) MIGA provides cover against Currency transfer restriction, expropriation, breach of contract, war and civil disturbance 2) PAID is transformed from a public entity into a private company limited by shares and will be renamed as PDSA. 3) Shareholders Agreement and Share Purchase Agreement 4 September 2014 BPO Conference 23

24 Private Sector Participation How will Pireaus work as PDMC model after tender? COSCO Lenders HR FUND 74% 7% Tender New Investor (67%) ATHEX (26%) BOTTerminal Concession Equity contribution Piraeus Container Terminal Loan agreements, debt contribution Port land Infrastructure HELLENIC REPUBLIC PIRAEUS Port Authority Marine Infrastructure Superstructures & Equipment Ship repair facility Future concessions 4 September 2014 BPO Conference 24

25 Conclusions Competitive Port PPP transaction offers best combination of Private Sector Participation and Level Playing Field Level playing field is an ambition, but consider: Hinterland transport New entrant vs. incumbent Compensation structure Modern Private Sector Participation to strengthen position Risk reduction from DBM & system engineering Gains from private sector in upcoming PDMC model Tailor made deal structure & transaction process 4 September 2014 BPO Conference 25

26 maritime & transport business solutions maritime strategy & finance advisors t e w info@mtbs.nl Wijnhaven 3E P.O. Box AP Rotterdam The Netherlands White House, Rotterdam

27 Level Playing Field Non- EU countries having strong influence on European Ports Region Impact European Ports impacted (primary/ non exhaustive) Maghreb Egypt (& Libya) Black Sea & Turkey Baltic Arctic Transhipment hubs (Tanger) competing on 50% of transhipment market share in West and central Med Maghreb economies direct impact on direct port demand (e.g. Marseille) Suez Canal importance Transhipment in East Med Transhipment volumes for Russia and Ukraine through Constantza or Marmara? Increasing direct calling to Russia? Ukrainian Ports share for Russian cargoes? (bulk and ferro) Turkish privatisation and expansion Russian and CIS cargo through Russian Ports (St Petersburg or Black Sea), or through Baltic States/ Finland Transhipment in NW Europe? Development of Energy Ports (Sabetta, Teriberka,..) North Sea Route impact Algeciras,GioiaTauro, Cagliari, Marsaxlokk, Valencia, Barcelona Marseille, Valencia, Barcelona All Piraeus, Limassol, GT, Marsaxlokk Constantza, Marmara, Piraeus Constantza, Marmara, Piraeus Odessa, Illichevsk, Yuzhny, Sebastopol All East Med & Black Sea KotkaHamina, Klaipeda, Latvian and Estonian Ports Hamburg, Bremerhaven, Rotterdam, Antwerp Rotterdam All 4 September 2014 BPO Conference 27