European Company Copyright 2005 Italplan Engineering, Environment & Transports S. p. A. Italy - All Rights Reserved

Transcription

1 European Company Copyright 2005 Italplan Engineering, Environment & Transports S. p. A. Italy - All Rights Reserved

2 Who We Are Italplan is an Italian engineering company in depth experience in the field of high speed railway transportation; its staff have contributed to the development of the Italian high speed train.

3 Rio de Janeiro - São Paulo High Speed Railway Line TBB BRAZILIAN HIGH SPEED RAILWAY LINE

4 General Information Rio de Janeiro Population: Metropolitan Area : São Paulo Population Metropolitan Area

5 General Information about the 2 States SAO PAULO The two States: represent 45% of the Brazilian gross domestic product (gdp) have the greatest population density: 67.8 Persons/Km 2 have 50.8% of the Brazilian industries

6 Current Connections Road Airplane

7 Main Problems Automobile Bus Airplane Travelling Time (h) 6 7 2* Maximum transport capacity (persons) Parking Stations Location Airports Location Integration with other means of transport *Included check in and landing proceedures Traffic, Lack of Safety, Pollution, Meteorological Dependence

8 High Speed Railway Line The Solution Reliability and Rapidity Safety Greater Transport Capacity for Passengers and Express Goods Good Value for Passengers

9 Competitiveness of train compared to others means of transports Rio de Janeiro - São Paulo (one way) Costs US $ 24,00 (R$ 70) Passengers 75 with 11 daily travel Time 6 hours Costs US $ 56,38 (R$ 163,50) Passengers 4 5 Time 5 hours Costs US $ 117 (R$ 319) Passengers 120 every 30 Time 2 hours Costs US $ 39,00 (R$113,10) Passengers 855 every 15 Time 1h 25

10 High Speed Railway Line Why? Offers: High Impact on Socioeconomic Development High Absorption of Transport Demand High Labour growth during the construction period (about employees) Creation of new jobs Direct (1.710 employees) Indirect (thousands) Possible re-employment of specialized workers laid off from other transport companies

11 High Speed Railway Line Why? Offers: Creation of new enterprises Creation of new professional figures High Social Integration Transport at popular and value added fare High energetic economization Low level of air and noise pollution Low environmental impact compared to others systems of mass transport

12 Train Attractiveness 100% 80% 60% 40% 20% 0% Km The distance of 403 Km between Rio de Janeiro and São Paulo is placed in the attractiveness band of the train

13 Transport Demand Future Traffic in the new high speed railway line Passengers interested into Rio de Janeiro São Paulo railway line within the first year of operation: 32,592,785 passengers / year Analysis based on the gdp: gdp growth (project s data): 1% year gdp growth (historical data): 1,9% year Source: IBGE, IADB, FMI

14 Transport Demand Annual growth of the high speed railways in Europe Billion of Passengers - Km Source: UIC (Union International Chemin de Fer) 52,7 8% 48,5 Decennial Growth: 3,03 21,6 33% 0,1 2 0,4 26,5 1,1 1,2 0,5 0,95 0,4 8,2 8,7 5,2 7 0,9 1,1 0,6 0,75 23% 28,9 9% 32,1 11% 32,9 3% 37,4 14% 42,3 13% 11,6 10,25 1,3 1,1 9,3 4,4 3,64 8,9 2,4 1,3 2,06 13,86 5,06 34,66 32,2 30,64 27,2 24,8 21,9 19,1 20,3 20,2 21, ,09 0,07 1,5 1,3 15% 0,12 0,19 0,08 1,54 1,54 0,15 0,04 0,09 0,2 1,7 1,8 59,2 12% 0,3 0,2 0,1 0,2 2,16 65,4 10% 0,22 0,3 0,2 0,1 2,06 15,46 6,75 37,36 FRANCE SNCF ITALY FS GERMANY DB SWEDEN SJ SPAIN RENFE BELGIUM SNCB HOLLAND NS NORWAY NSB FINLAND VR SWITZERLAND SBB

15 Transport Demand Annual planned growth for the high speed railway Billion of Passengers - Km , ,2 15,0 15,9 16,8 17,7 18,7 19,8 20,9 22,1 23,4 Annual Growth 6% 30,8 31,4 27,4 27,9 28,5 29,1 29,6 30,2 26,3 27,7 28,2 28,8 29,3 29,9 30,5 31,1 31,732,1 32,4 24,7 26,6 26,927,1 26,1 Annual Growth 1% TAV Rio de Janeiro São Paulo Year

16 Transport Demand Annual planned growth for the high speed railway Data Source: ANTT 100,0% 93,7% 80,0% 60,0% 51,0% 40,0% 26,0% 23,0% 20,0% 1,9% 4,9% 0,0% Bus Automobiles Airplane Transcorr (1997) 51,0% 26,0% 23,0% Current (2002) * 1,9% 93,7% 4,9%

17 Transport Demand Annual planned growth for the high speed railway Historical Annual Growth of the Region: Years Nova Dutra + 36,48% Data Source: ANTT Automobiles/Year in 10^6 80,00 68,61 60,00 40,00 49,77 50,27 20,00 2,40 0,

18 Traced Route New Railway Line

19 Traced Route Satellite Map Rio de Janeiro Railway Traced Route São Paulo Longitudinal Profile

20 Environmental Impact The Project complies with major international environmental standards.

21 Technical Data of the Project TBB BRAZILIAN HIGH SPEED RAILWAY TRAIN Line 403 Km Intermediate Stops none Commercial Speed 285 Km/h Travelling Time 85 min. Frequency every 15 minutes Passengers 855 per Train Trains per day (Initials) 110 Numbers of Track 2 Minimum Ray of the Curve urban route m Minimum Ray of the Curve extra-urban route m Maximum Line Gradient 25 Minimum Ray of the vertical Curve m

22 Hub Match in Time of Different systems of transport Rio de Janeiro Central do Brasil Station Luz Station São Paulo

23 Safety The project complies with the major international standards of construction and safety adopted by European laws. SECÇÃO TRANSVERSAL A-A' CROSS SECTION A-A' The project adopts the European safety system ERTMS providing the train s circulation, which SECÇÃO TRANSVERSAL B-B' CROSS SECTION B-B' allows a train running behind another at 300 Km/h every 2 minutes and 30 seconds. 300 Km/h 300 Km/h TBB 2 TBB 1 T = 2 30

24 Construction Costs Million US $ Kind of work 1 year 2 year 3 year 4 year 5 year 6 year 7 year Total Expropriation Main office (roadway) Tunnels Bridges and viaducts Landscape and environment Equipment (permanent way) Technological services Electrification Total cost of infrastructure Railway stations Dynamic inst. and Maintenance Rolling stock Total amount

25 Distribution of Construction Costs Construction Costs 74% 7% 14% 5% Infrastructure Stations Systems Rolling Stock

26 Total Project Cost EPC Costs 8,519,000,000 US$ Technical variants + Engineering 423,830,00 US$ Safety Equipment 85,190,000 US$ Total 9,028,020,000 US$ Expected Term of the Concession is of 42 years of which 7 Construction 35 Operation

27 Financing Structure The financing structure provides 6 tranches: Tranche 5; Tranche 6; Tranche 1; Tranche 4; Tranche 3; Tranche 2; Tranche 1 Tranche 2 Tranche 3 Tranche 4 Tranche 5 Tranche 6

28 Financing Structure The financing structure is based on the following hypothesis : 87,94% 12,06% Financing Equity

29 Debt Structure WAYS AND TIMING OF FINANCING THE WORKS (Million US $) YEAR EQUITY AMOUNT INVESTOR I 1.088,3 SH. SPV YEAR II DEBT AMOUNT 1.590,9 LENDER BNDES III 1.652,0 BNDES YEAR IV DEBT AMOUNT 1.792,00 LENDER FINANCIAL INSTITUTIONS V VI VII 1.457,00 FINANCIAL INSTITUTIONS 1.057,00 FINANCIAL INSTITUTIONS 390,83 FINANCIAL INSTITUTIONS NOTES: THE INTERNATIONAL BANKING INSTITUTIONS MAY PARTICIPATE INTO THE FINANCING OF THE IV, V, VI E VII YEAR ADVANTAGES: AT THE END OF THE THIRD YEAR, THE 48,5% OF THE WORKS SHALL BE ACCOMPLISHED, (THE 56,9% OF THE CIVIL WORKS). THE FINANCING OF THE LAST FOUR YEARS ALLOWS THE FINANCIAL INSTITUTION TO STRONGLY REDUCE THE LEVEL OF THE UNDERTAKEN RISK. NOTES: BNDES: National Bank of the Socioeconomic Development of Brazil

30 Sources of the Work s Financing Potential Lenders BNDES Fin. Inst. year 6 11,71% Fin. Inst. year 5 16,14% Fin. Inst. year 7 4,33% Equity sh. SPV year 1 12,05% Fin. Inst. year 2 17,62% IFC IADB EIB International and Brazilian Banks Fin. Inst. year 4 19,85% Fin. Inst. year 3 18,30% Export Credit Agencies (Eximbank,SACE, etc.) Investment and Pension Funds

31 Debt Structure Annual Rate BNDES 14,75 % Annual Rate other Loans 10,00 % Amortizations 16 years (from the year 1 of operation) Financial Total Costs 17,648,608,870 US$ of which Financing 7,939,750,000 US$ IDC ( ) + Interests ( ) 9,708,858,870 US$ Positive Rating of Credit of Brazil as: Foreign Currency : B+/Stable/B Local Currency: BB/Stable/B National Scale Rating: braa/stable- Source: Standard & Poor s

32 Income in US$ The project revenues include: Express Goods; Services: Optical Fibres Advertising Services; Internet and Wi-Fi Catering Commercial Rent of the stations Tickets;

33 Operating Costs The expected operating cost for the first operative year : 185,047,966 US$ 22,72% 8,17% 7,13% 61,98% Maint. Line Maint. Trains Labour Costs Electricity

34 Debt Reimbursement Plan The debt (comprehensive of the capitalized interests) shall be reimbursed as follows: Adquired capital amortization Million US $ Fixed Interest Rate: BNDES 14,75% OTHER 10% Year Installment Total Balance Original Debt % reimbours. Original Debt Intersts Reimbours. Original Debt remainder ,00 0,00 0,00 0,00 0,00% , ,27 601,77 197,50 197,50 1,12% , , ,45 433,78 631,28 3,58% , , ,53 716, ,76 7,64% , , ,88 992, ,14 13,26% , , , , ,71 20,36% , , , , ,07 28,68% , , , , ,56 38,10% , , , , ,14 48,78% 9.040, ,68 943, , ,66 60,89% 6.902, ,68 654, , ,41 74,63% 4.477, ,41 382, , ,08 85,39% 2.578, ,45 201, , ,94 92,47% 1.328, ,67 96,81 800, ,86 97,01% 527, ,42 34,11 413, ,15 99,35% 114, ,78 6,29 114, ,61 100,00% 0,00

35 Financial Economical Data Million US $ INCOME STATEMENT Revenues from Tickets Sales, Goods and Services Opex (Depreciation & Amortization) (Interest Expenses) Interest on deposit (Taxes) Net Income , , , , , , , ,20 185,05 196,63 408,45 417,21 426,29 441,10 449,63 455,98 407,97 407,97 407,97 407,97 407,97 407,97 407,97 407, , , , , , , , ,19-181,01 306,61 364,77 385,72 394,99 379,46 362,99 199,55 212,36 234,75 257,18 378,51 458,94 565,09 790,33-283,04-188,17-161,07 27,06 335,97 555,82 804,41 967,72 CASH FLOW Unlevered Cash Flow 1.610, , , , , , , ,99 DEBT REPAYMENT Debt repayment (capital + interest) 799, , , , , , ,68 DIVIDENDS PAYMENT Dividends % pay out / earnings % 0% 0% 0% 0% 0% 0% Payment residual Available Cash

36 Financial Economical Data Million US $ INCOME STATEMENT Revenues from Tickets Sales, Goods and Services Opex (Depreciation & Amortization) (Interest Expenses) Interest on deposit (Taxes) Net Income , , , , , , , ,45 467,10 478,73 777,31 783,08 791,38 813,08 825,72 839,19 407,97 407,97 407,97 407,97 407,97 407,97 407,97 407, ,10 943,16 654,87 382,80 201,60 96,81 34,11 6,29 355,25 345,95 366,21 338,27 400,48 431,82 485,47 608,55 942, , , , , , , , , , , , , , , ,35 CASH FLOW Unlevered Cash Flow 2.835, , , , , , , ,50 DEBT REPAYMENT Debt repayment (capital + interest) 3.080, , , , ,45 897,67 447,42 120,78 DIVIDENDS PAYMENT Dividends % pay out / earnings ,59 283, , , , ,34 0% 0% 15% 15% 75% 75% 75% 75% Payment residual Available Cash

37 Financial Economical Data Million US $ INCOME STATEMENT Revenues from Tickets Sales, Goods and Services Opex (Depreciation & Amortization) (Interest Expenses) Interest on deposit (Taxes) Net Income , , , , , , ,84 857,87 877,51 893,87 911,32 929,95 954,14 979,68 407,97 407,97 407,97 407,97 407,97 407,97 407, ,31 904, , , , , , , , , , , , , , , , , , , ,63 CASH FLOW Unlevered Cash Flow 3.995, , , , , , ,85 DEBT REPAYMENT Debt repayment (capital + interest) DIVIDENDS PAYMENT Dividends % pay out / earnings 2.548, , , , , , ,05 75% 75% 100% 100% 100% 100% 100% Payment residual Available Cash

38 Financial Economical Data Million US $ INCOME STATEMENT Revenues from Tickets Sales, Goods and Services Opex (Depreciation & Amortization) (Interest Expenses) Interest on deposit (Taxes) Net Income , , , , , , , , , , , , , ,05 407,97 407,97 407,97 407,97 407,97 407,97 407, , , , , , , , , , , , , , , , , , , , , ,58 CASH FLOW Unlevered Cash Flow 5.719, , , , , , ,28 DEBT REPAYMENT Debt repayment (capital + interest) DIVIDENDS PAYMENT Dividends % pay out / earnings 5.109, , , , , , ,23 100% 100% 100% 100% 100% 100% 100% Payment residual Available Cash

39 Financial Economical Data Million US $ INCOME STATEMENT Revenues from Tickets Sales, Goods and Services Opex (Depreciation & Amortization) (Interest Expenses) Interest on deposit (Taxes) Net Income , , , , , , , , , ,83 407,97 407,97 407,97 407,97 407, , , , , , , , , , , , , , , ,71 CASH FLOW Unlevered Cash Flow 8.129, , , , ,61 DEBT REPAYMENT Debt repayment (capital + interest) DIVIDENDS PAYMENT Dividends % pay out / earnings Payment residual Available Cash 7.402, , , , , ,26 100% 100% 100% 100% 100% 100%

40 Technical/Economical Resume TECHNICAL / ECONOMICAL ASSUMPTIONS CAPEX (MM$) of which: EPC costs 8.519,0 Technical variants + Engineering 5,0% 423,8 Safety equipment 1,0% 85,2 Total 9.028,02 OPEX (MM$/y) Total Full Costs ,7 Total ,7 Taxes: Pis, Confins 9,25% On revenues Income Tax (average) 30,7% On Pretax income VAT (ICMS) 17,0% On revenues Funding Sources in MUS$: Interest Rates: ECONOMIC RESULTS Equity 12,05% 1.088,27 Debt 87,95% 7.939,75 IDC 5.251,03 Interest 4.457,83 Debt Rate* Years Reimb. Dates Tranche I 14,75% 4.167, Tranche II 14,75% 4.327, Tranche III 10,00% 3.492, Tranche IV 10,00% 2.839, Tranche V 10,00% 2.059, Tranche VI 10,00% 761, Total Debt ,6 Long term (BNDES) 14,75% Long term (Other sources) 10,00% on deposit (net) 10,00% IRR (Unlevered, After Tax) 16,86% ROE 17,31% WACC 15,00% change Real for US$ 3,00

41 Passage of the Government Decree The Brazilian Government have approved Italplan s project by means of Decree n 169 dated as of june 1, 2005, establishing that the project shall be used as the base of the International Bid.

42 Passage of the Government Decree ISSN Official Diary of the Union Section 1 N. 105, Friday, June 3, 2005 Ministry of Transport MINISTER S DEPARTMENTAL PRIVATE STAFF DECREE N. 169, JUNE 1 ST, 2005 THE MINISTER OF TRANSPORT, complying with the authority conferred by the paragraph 87, single issue, item II, of the Federal Constitution, resolves: Art. 1 st Approval of the Final Report presented by the Working Group established through the Decree n. 360, June 24, 2004, and extended through the Decrees n. 533, December, 2004, and n. 46, March 17, 2005, with the aim to evaluate projects of high speed railway connection between the cities of Rio de Janeiro and São Paulo, considering the following recommendations: I. Implement the necessaries institutional measures for the realization of a railway connection for the transport of passengers through an high speed train between the cities of Rio de Janeiro and São Paulo, taking as reference the technical and financial model conceived in the Project TAV ITALPLAN, because of the process of public bid of concession. II. Consider relevant the environmental studies developed within the TRANSCORR project circle. Art. 2 nd Constitute a Working Group having the aim to develop the activities and studies necessary for the implementation of the concession process of the project referred to the Art. 1, and propose an institutional model and its execution together with the Governmental organ of decision. Art. 3 rd The Working Group shall consist of representative of the following organs: - Private Department of Minister of transport; - Management Secretariat of Programs of Transport-SE-GES; - Secretariat of National Politics of Transport-SPNT; - National Agency of Land Transport-ANTT; - VALEC Engineering, Construction and Railways S/A (Brazilian Railways); - Ministry of Planning, Investment and Management; and - National Bank of Economic and Social Development of Brazil-BNDES. Art. 4 th The Working Group shall be coordinated by VALEC Engineering, Construction and Railways S/A, which may contract for studies, analysis and opinions and invite, in possible participation, advisors and specialists and representatives of the involved States and Municipalities. Art. 5 th The Working Group shall operate for 6 months period, starting from the publication date of this Decree, for the achieving of Its aims. Art. 6 th This Decree shall be effective starting from its publication date. ALFREDO NASCIMENTO

43 Project Timing SSN Official Diary of the Union Section 1 N. 105, Friday, June 3, 2005 Ministry of Transport MINISTER S DEPARTMENTAL PRIVATE STAFF DECREE N. 169, JUNE 1 ST, 2005 International Bid March 2006 THE MINISTER OF TRANSPORT, complying with the authority conferred by the paragraph 87, single issue, item II, of the Federal Constitution, resolves: Art. 1 st Approval of the Final Report presented by the Working Group established through the Decree n. 360, June 24, 2004, and extended through the Decrees n. 533, December, 2004, and n. 46, March 17, 2005, with the aim to evaluate projects of high speed railway connection between the cities of Rio de Janeiro and São Paulo, considering the following recommendations: I. Implement the necessaries institutional measures for the realization of a railway connection for the transport of passengers through an high speed train between the cities of Rio de Janeiro and São Paulo, taking as reference the technical and financial model conceived in the Project TAV ITALPLAN, because of the process of public bid of concession. II. Consider relevant the environmental studies developed within the TRANSCORR project circle. Art. 2 nd Constitute a Working Group having the aim to develop the activities and studies necessary for the implementation of the concession process of the project referred to the Art. 1, and propose an institutional model and its execution together with the Governmental organ of decision. Art. 3 rd The Working Group shall consist of representative of the following organs: - Private Department of Minister of transport; - Management Secretariat of Programs of Transport-SE-GES; - Secretariat of National Politics of Transport-SPNT; - National Agency of Land Transport-ANTT; - VALEC Engineering, Construction and Railways S/A (Brazilian Railways); - Ministry of Planning, Investment and Management; and - National Bank of Economic and Social Development of Brazil-BNDES. Art. 4 th The Working Group shall be coordinated by VALEC Engineering, Construction and Railways S/A, which may contract for studies, analysis and opinions and invite, in possible participation, advisors and specialists and representatives of the involved States and Municipalities. Art. 5 th The Working Group shall operate for 6 months period, starting from the publication date of this Decree, for the achieving of Its aims. Art. 6 th This Decree shall be effective starting from its publication date. Fixed by Decree n. 349/05 Concession July 2006 Start Works 2007 Works Supervision shall be executed by Italplan (period of construction) ALFREDO NASCIMENTO

44 Benefits for the Governments Taxes & Contribution: Federal State Federal ,284,554,000 US$ (concession) 88,487,555,000 US$ State of Rio de Janeiro 1,083,045,000 US$ 21,079,663,000 US$ State of São Paulo 1,083,045,000 US$ 21,079,663,000 US$