Fertagus Concession Contract

Transcription

1 Fertagus Concession Contract 2013

2 FERTAGUS is a company part of the BARRAQUEIRO GROUP that won the public international contest for the railway exploitation of the north/south passage launched by the portuguese state in 1997 and began its activity in The Barraqueiro Group specializes in the design and implementation of innovative passenger and freight mobility solutions. Leader in the Iberian suburban and interurban road passenger transport sector and a benchmark in rail and light rail operations, as well as an international road freight hauler, the Barraqueiro Group is proud of its long history and large experience, that dates back to its days as a small bus company founded in 1915.

3 FERTAGUS It was the first contract in the exploitation of a public transport service that included passengers after the split between the offer of transportation services and the management and maintenance of the railway infrastructure. Fertagus becomes the first private operator managing a railway system in Portugal. The initial Concession Contract was renegotiated having in consideration the law 86/2003 which establishes the public-private partnership rules and began to be applied in December In 2010 the contract was extended until 2019, without compensations by the Government for the public service provided.

4 FERTAGUS FERTAGUS is responsible to commercial exploitation through: A contract with Portuguese Government where are defined high levels of Quality that Fertagus has to perform A contract with REFER concerning the use of infrastructures.

5 FERTAGUS Those Quality levels concerns to: The railway exploitation - operations; Safety and Security; Rolling stock management & maintenance; South railway stations management & maintenance; Ticketing system; Recruitment, training and management of all people involved.

6 FERTAGUS Activities Transportation service in North/South railway Bus transportation in connection with railway stations - Sulfertagus Maintenance service of UQE s Management of 6 stations in the south: Commercial areas management (121 shops) Parking management places

7 Operations I During the day Fertagus offers 3 trains/hour (Coina Lisboa) and every 60 minutes (Setúbal Lisboa) Rush hours (7:00 to 10:00am and 4:30 to 8:30 pm) 5 trains/ hour (Coina-Lisboa), most of them double trains

8 Operations II To guarantee the operations, Fertagus has 18 UQE s, with 476 seated places and 734 standing places. Time between Setúbal and Roma/Areeiro is 57 minutes. To cross the bridge is 7 minutes. The total length of the commercial exploitation is 54 Km. Commercial average speed is 47,5 Km/h.

9 Operations III 148 daily trains 41 double trains UQE Km year 2,2 millions daily places I.R ,98 IP ,95 IP ,98 IP ,99

10 Human Resources Drivers Commercial Operators Traffic Control Exploitation/ Commercial Supervisors Maintenance Security and Safety Staff TOTAL

11 Demand 2012 Demand 21 millions Train tickets revenue 25 millions Total revenue - 30 millions Revenue per PKM 0,06862

12 Contractual framing DL 339/91 of 10/09 Private companies access to the railway DL 104/97 of 29/04 Reconfiguration of the railway sector DL 299-b/98 of 29/09 Regulation and control of the sector Ordinance 1375/95 of 22 International public contest for the acquisition of rolling stock Ordinance 565 A/97 of 28/07 International public contest for the exploitation of the public transport railway service in the north/south passage 27 June 1999 Signature of the Fertagus Concession Contract Renegotiation of the contract in 2005 Contractual extension of the contract in 2010

13 Initial Contract ( )

14 Initial Contract Operations To guarantee the operations, Fertagus has 18 UQE s. Time between Fogueteiro and Entrecampos is 27 minutes and between Pragal and Campolide is 7 minutes, which is a significant improvement for accessibilities between both sides of Tejo River. The total length of the commercial exploitation was 20,99 Km. Commercial speed was 47,5 Km/h.

15 Initial Contract FERTAGUS investment : 104,7 millions Euros in rolling stock. 39,6 millions Euros with reinforcements in 2003, 2005 and ,4 millions Euros in commercial equipment, ticketing system and maintenance installations

16 Initial Contract Main Contract rules Quality minimum levels FERTAGUS has to guarantee: the realization of 98% of the foreseen trains (a train with more then 10 minutes delay is considered not done) 95% of the foreseen trains arrived with less then 3 minutes delay. 96% of the foreseen trains arrived with less then 5 minutes delay. 98% of the foreseen trains arrived with less then 10 minutes delay.

17 Initial Contract Main Contract rules Sharing the risks Risks are shared using a system based on traffic level bands. Reference band - Fertagus pay a fee to the use of infrastructure (TU) Superior Band - Inferior Band - fee = TU + a fee = TU - b

18 Inicial agreement first years PK1 PK2 PK3 PK4 PK real If the real volume traffic < PK4 Concessionaire: Exceptional redemption Renegociation PK1 = Maximum limit of superior traffic band PK2 = Minimum limit of superior traffic band PK3 = Maximum limit of inferior traffic band PK4 = Minimum limit of inferior traffic band

19 Inicial agreement first years PK1 = Maximum limit of superior traffic band PK2 = Minimum limit of superior traffic band PK3 = Maximum limit of inferior traffic band PK4 = Minimum limit of inferior traffic band PK1 PK2 PK3 PK4 PK real If the real volume traffic > PK4 in 2002 Ways of compensation: Extension of the deadline of the concession Extraordinary rise in Transport Fares Direct compensation by the Government Combination of the above ways of compensating

20 Renegotiation Historical context Legal Regime for PPPs Law 86/2003, of 26 de April Nomination of Monitoring Commission Joint Ministerial Order 699/2003, of 18 June Beginning of renegotiation process September 2003

21 Renegotiation Grantor proposal Concession períod of 5 years Implementation of operational leasing structure Payment by the Grantor of the costs to circulations of low utilization, imposed to the Concessionaire Revenue sharing between both from: -Demand higher than planned - Over revenue after fair return on invested capital

22 Renegotiation Grantor proposal Extension to Pinhal Novo Assumption of risk related to railway operation by the Concessionaire Priccing freedom between -10% and +15% real to BTM 2003 Contractual autonomy of the bus service Reducing the financial effort of the State on railway activity through margin necessarily positive, of the complementary activities

23 Renegotiation Proposal appreciation by the Concessionaire Risk increase for Fertagus -Maintaining the risk profile concerning the conditions of exploitation -Demand risk -Increased risk in the quality of service -Sharing higher revenue in respect of expected in Base Case Financing of railway activity, but not the bus activity, by the complementary activities Aggravating factors: Service Extension New investments in ticketing system New Stations New service of Metro Sul do Tejo

24 Risk regime/ Up-Side share Total responsability of Fertagus in what concerns the Concession risks Finantial compensations on part of the state previewed only in the Contract If annual real railway revenue > previewed revenue Excess divided between both parties 75% Fertagus Variation until to 5% 25% State 25% Fertagus Variation up to 5% 75% State

25 Use of the Infrastructure The access and use of the infrastructure obey to the displayed in the infrastructure use contract and in the REFER network directory The company pays to Refer for the use of the infrastructure the prices previewed in the REFER network directory connected to the essential, additional and auxiliary services If annual variation, positive or negative of the essential service price > 3% than the price registered on financial model for that year (prices 2005) The state or the company should pay to the other part the sum corresponding to the variation above or bellow 3%

26 Contracts with Refer Annex 4 Concession Contract for the exploitation of stations, Interfaces, parking in the south stations (From Pragal to Penalva). Annex 9 Use Contract for the infrastructure of the North/South passage including : Concession Contract for private use of the Coina maintenance depot Agreement for the access of the company to Centralized Traffic and Infrastructure Control (CTC). Agreement for access to electrical energy for traction Agreement for protocols of communication systems and access conditions to the communications network Principles for the implementation of a monitoring system of performance and rules to define a performance improvement regime Insurance

27 Quality of the supply The company should: Regularity rate: To keep operational human resources and necessary material in order to at least 98% of the service presented in our schedule is accomplished Punctuality rate: The service must present: 95% of circulation delayed in destination =/< 3 minutes 96% circulation delayed in destination =/< 5 minutes 98% circulation delayed in destination =/< 10 minutes Penalty regime (Annex 14)

28 Contractual framing Other aspects of the new Contract which increase the risk for the company: Change of the exclusivity regime Contribution of the accessory activities profits to the financial re-balance Aggravation of the penalty sum and end of incentives

29 Contractual framing Main changes: Initial Contract Renegociated Contract Prices 95% inflation rate Conditioned free prices Compensation of the public service Commercial Risk Variable compensation having as reference passengers kilometers Fixed compensation for the concession period Up-side share Concession end Rolling Stock financing MLP Loan Operational Leasing

30 Contractual framing This way the company takes the operation risk and assumes the risk concerning with demand and rolling stock availability in a context of several operational level costs, risk of inflation and high penalties. The higher occupation rate allowed is now lower aggravating the operational risks associated with the extension to Setúbal with the exact same rolling stock we previous had. Fertagus has 18 UQE s with 17 daily performing commercial service even in a phase in which heavy maintenance operations in the rolling stock are taking place.

31 Contractual framing State risks: Need of more rolling stock Extension of the railway service to Gare do Oriente and/or Praias do Sado Opposition of the state to the change of prices performed by the concessionaire Extraordinary variation on prices of essential services to the use of the infrastructure Unilateral changes of the state to the agreed conditions Happening of extraordinary events Rescue or abduction of the Concession

32 Quality Services Ensure the quality in the global service From 17 items evaluated annually by our clients, none had a negative score. Considering our Client Satisfaction Inquiry, we achieved a level of 4.5, on a 1 to 5 scale

33 Demand growth 14,8 17,5 17, ,6 21, ,6 22, ,4 3, % of our clients want to use the train in the future 20% of demand use the train for internal trips in Setúbal peninsula.

34 With 10 years of operation, we are in the right way. Sustainability demand growth High levels of efficiency Quality services: In November 2002, Fertagus was certified by APCER, Certification NP ISO 9001: 2008 In March 2007, Fertagus was certified by APCER, Certification NP 4397:2008 (OSHAS 18001: 1999) : Occupational Health and Safety Management System

35 Efficiency levels The cost percentage cover by the operational revenue is 95% (excluding compensations for public service obligations). 5 years period (2005/2010) Total compensations for public service obligations: 57,6 millions Euros Upside delivered to the Government (2005/2010): 11,7 millions Euros

36 Contract Renewal Agreement Headlines Renewal: Non public service compensation Non risk of inflation rate fluctuation (Fare increases, upside & model net profit share) Profits and costs evolution, in general, according inflation rate Fare increase (train, bus and park): 1% above expected annual inflation rate per year Passengers increase: -train and park: 1% (2011_15) / 0,5% (2016_19) -bus: 0% for all period

37 Agreement Headlines Upside share: 75% Government/ 25% Fertagus of the difference between real and financial model train ticketing revenues Costs risk: 100% Fertagus, except railway Infrastructure use Extraordinary increase of railway Infrastructure use balanced with extra fare increase Financial model net profit share 2017_19 50% Government/ 50% Fertagus Investment : 2,8 million - ticketing system 1,6 million - IT 0,2 million - infrastructures 0,5 million - maintenance 0,5 million March 2013

38 THANK YOU FOR YOUR ATTENTION