II Simpósio Internacional PwC Inovação em Gestão Pública Abril 2011

Transcription

1 II Simpósio Internacional PwC Inovação em Gestão Pública Abril 2011

2 Agenda 1. PwC 2. Global PPP context 3. What is PPP 4. Payment Mechanisms and Demand Risk 5. Alternative Financing Models 2

3 PwC 3

4 Project Finance deal record 10 years to December deals $62.6bn EMEA 28 deals $9.3bn 62 deals $23.2bn Americas Asia Pacific Global total 346 closed deals with a total value of $95.1bn Source: Project Finance International January 2001 January 2011 Note: Projects with a deal value of <$20m are excluded from league tables

5 Latest league tables Project Finance International Global closed deals Global by number of closed deals for 2010 Rank Adviser No. of deals Value (US$ m) 1 PwC 34 12,136 2 Ernst & Young 29 4,705 3 KPMG 27 9,934 4 RBC 16 12,033 5= Macquarie 15 11,682 5= Deloitte 15 4,958 7 Deutsche 11 2,305 8 HSBC 7 8,672 9 SBI Capital 4 4,043 10= Standard Chartered 3 8,764 10= Natixis 3 4,600 10= Investec 3 1,773 Global by value of closed deals for 2010 Rank Adviser Value (US$ m) Source: Project Finance International, January 2011 Source: Project Finance International, January 2011 No. of deals 1 PwC 12, RBC 12, Macquarie 11, KPMG 9, Standard Chartered 8, HSBC 8, SG 8, Credit Agricole 8, Riyad 7, Deloitte 4, st 1 st globally by value globally with 34 closed deals for 2010 of closed deals for 2010 Total deal value of $12,136m

6 Global PPP Context 6

7 The Global Infrastructure Challenge Investment (per OECD) Large share will go into China, India and Brazil, but OECD countries will still need to invest to replace ageing infrastructure to maintain global competitiveness (despite much lower growth and diversion of funding to ageing population (healthcare & pensions), climate change and environmental agendas) Implication of trends mean greater use of private finance and user charging (opposed to govt funding) 3.5% of global GDP up to 2030 will need to be invested in infrastructure Estimated average annual world infrastructure expenditure (additions and renewal) for selected sectors, , in USD Bn, Source: OECD Annual Annual Total Type of Infrastructure Road ,370 Rail ,130 Telecoms ,170 Electricity ,210 Water 772 1,037 18,090 Total 36,970 * Only OECD countries, Russia, China, India and Brazil are considered here. Slide 7

8 uncertainties Spending squeeze will reduce investment in Europe and North America Sovereign credit uncertainties continue Regional instability in MENA Capital markets solutions elusive Reliance on multilateral and government support, with associated political risk UK focusing on cost reduction in existing PPPs Annual need for investment in infrastructure $3 trillion Gap between investment need and private investment $2 trillion Private Investment in infrastructure $1 trillion Source: World Economic Forum report March

9 WEF Global Infrastructure Competitiveness Index Rank Country 1 Hong Kong SAR 2 Germany 3 United Arab Emirates 4 France 5 Singapore 6 Switzerland 7 Netherlands 8 UK 9 Canada 10 Sweden 11 Japan 12 Iceland 13 Denmark 14 Spain 15 US 47 Russia 50 China 62 Brazil 86 India Source: World Economic Forum report 28 October 2010 Slide 9

10 Government Finances 2010 Cumulative Government Debt % of GDP Source: IMF - October 2010 Edition 9

11 Credit Default Swap Rates (5 years) Spread (bps) nov/2008 mai/2009 nov/2009 mai/2010 Ireland Portugal Mexico Date Australia UK Brazil Source: Thomson Reuters Slide 11

12 Private Finance for Infrastructure Market Overall global project finance market volume stood at US$147.4bn for Average annual Infrastructure spend from of US$190bn globally. 15% average growth from 2004 to 2008, 60% reduction from 2008 to 2009 Global Loans by Sector (US$m) Sector Power 56,289 89,858 Oil & Gas 25,640 38,422 Transportation 25,451 54,789 Leisure and Property 7,474 20,899 Telecommunications 8,118 6,259 Water & Sewerage 4,699 2,933 Mining 4,071 11,455 Industry 3,454 11,979 Petrochemicals 2,797 13,413 Waste & Recycling 1, Total 139, ,557 Source: Project Finance International Total Market Volume US$Bn Annual Private Finance Invested Globally Source: Project Finance International Slide 12

13 The refinancing challenge Source: Standard & Poor s (2010) 9

14 UK PPP Context 14

15 UK Strategy Policy Projects Project Finance Panel HM Treasury Building Feasibility Study Treasury Taskforce DoH Private Finance Unit LU PPP Feasibility Study Partnerships UK + OGC SOPC1 HM Treasury Building FC US$223m MoD Main Building Refurbishment FC US$695m OGC Back to Treasury Strategy Policy SOPC2 Published "PFI: Meeting the Investment Challenge" SOPC3 Published "PFI: Strengthening long-term partnerships" SOPC4 Published "Infrastructure procurement: delivering longterm value" Infrastructure UK Projects LU PPP FC US$7.3bn M25 Feasibility Study Allenby Military Barracks FC US$2.9bn Barts Hospital FC US$2.1bn Skynet FC US$5.7bn M25 FC US$2.1bn Slide 15

16 UK Volume as a % of Global Loan Volume Infrastructure Finance Sources: Project Finance Bank Debt 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% UK vs Global Project Finance Loan Volumes , , , , ,000 50,000 0,000 Global Project Finance Loan Volumes (USD Billions) Source: Deal Logic February 2011 Global Volume UK Volume as a % of Global Volume Project Finance Bonds issued in 2010 totalled c. $20bn compared to c. $210bn of Project Finance Bank Debt 11

17 European Investment Bank EIB - Doing more, better and faster - Guarantee products will be developed further European Project Bond initiative: under the plan the EIB will not have anything to do with bonds at all. What it will do is invest in projects at a Source: Infra Journal quasi-equity, or subordinated debt level. EIB Disbursements Targets EUR (bil) Source:EIB Corporate Operational Plan

18 What is PPP? 18

19 Contract Structure What is the Project? Provide Funding for Construction Operate Asset (e.g. Toll) Delivery of Asset, Service and Finance Delivery of Asset and Service Delivery of Maintained Asset Maintain Asset Design, Construct and Commission Asset Delivery of Assets

20 Contract Structure Which Contract? Use of private sector In-house Provision Service Outsourcing / Asset Build Design Build Maintain PPP/PFI Regulated Utility Potential to transfer risk Slide 20

21 PPP vs Conventional Payment profile can be depicted as follows: Payment profile for the public sector: Cost Overruns Estimated Capital Cost Time overruns Construction phase Running cost overruns Estimated running costs Operation phase No payments until facilities ready Payment based on usage Payment based on availability Years Years Construction phase Operation phase

22 Typical PFI structure

23 Project Risks Risk allocation Risks should be allocated to the party best able to understand and manage them Public Shared Private Land acquisition Changes in requirement Latent defects (existing) Inflation Regulatory Taxation Force Majeure Change in Law Design & construction Commissioning Operating & maintenance costs Operating performance Latent defects (new) Demand? Finance? 23

24 Payment Mechanisms Some Principles Used - Operations Availability Payment Payment to the private sector for making the serviced infrastructure available to the users Deductions applied for performance failures including non-availability Availability/ Demand Hybrid Payment to the private sector based on the number and type of users of the asset e.g. shadow toll Demand Fares received by the private sector directly from users Possible sharing of demand risk through contract 24

25 Demand Risk In Passenger Rail Projects Passenger revenues can seldom pay for the costs of a new passenger rail line whether metro/underground or tram/ over ground. New passenger transport projects normally require subsidies (either during construction or operations). If demand risk is transferred to the private sector, concessionaires will likely seek protection or compensation against changes in competing modes of transport. eg bus services Dec 2010

26 Demand Risk In Passenger Rail Projects Many examples of over-optimistic demand forecasts for passenger rail projects: Eurotunnel, Las Vegas monorail, Sydney airport link, Croydon Tramlink etc. (Well publicised financial failures of toll roads in Australia like Cross City tunnel, Lane Cove tunnel led to Availability payment based road project for Peninsula Link in Melbourne) This does not mean that passenger rail projects should not use private finance But it is important to decide how much demand risk to transfer to the private sector and how much to retain for the public sector. Dec 2010

27 Why use PPP and private finance? It enables risk transfer away from the taxpayer Whole life costs can be managed transparently Provides budgetary certainty Payments are related to outcomes Dec 2010

28 Alternative Funding Models 28

29 Alternative Financing Models Direct government lending (e.g. TIFU in UK) Direct government lending but guaranteed by private sector (e.g. Credit Guarantee Finance in UK) Indirect government lending: rise of state-owned infrastructure or development banks (e.g. EIB in Europe, Banobras in Mexico, DBSA in South Africa, BNDES in Brazil) Forfeiting/discounting (irrevocable payments by authorities e.g. 100% in Germany, 80% in France under Cession Dailly) Capital Grants (e.g. roads in Holland) Equity only models (no private debt e.g. St Johns Hospital in Vancouver) Construction Finance/DBF (e.g. Infrastructure Ontario) Tax-advantaged finance (e.g. munibond market in the USA) March

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