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- American Chamber of Commerce In Egypt
- PPPs in the Transportation Sector
- Monday, 18 February 2008
- Cairo, Egypt
- Mohamad Nada
- Head of the PPP Unit
- Ministry of Transport
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- Objectives of the Government of Egypt:
- Upgrade and improve service level of strategic infrastructure
- Mobilize private sector financing and know-how
- Reduce the fiscal burden by creating new revenue sources (eg. toll in
roads)
- Implement model PPP transaction in the various sectors of the Ministry
starting with the road sector
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- Establish a Public Private Partnership (PPP) Unit at the Ministry of
Transport in order to identify and implement infrastructure projects
within the Ministry’s various sectors in partnership between the
Ministry and private sector investors while striving to achieve the
following overall objectives:
- Improving the levels of service rendered to the public.
- Attracting specialized private sector know how and innovation.
- Sharing the various risks with the private sector investors.
- Decreasing (or eliminating) the government’s financial burdens for
capital expenditures and operating costs.
- Ensuring long term maintenance and development of the relevant
infrastructure works according to international standards throughout
the concession period.
- Improving the performance of public sector staff through interaction
with private sector, and ensure continuous transfer of knowledge to
government employees.
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- Due Diligence Phase
- Identify Physical Scope of Project:
- Engage Lead Advisors who will issue an (RFP)
- Select Technical & Legal Advisors
- Prepare the "Legal" Due Diligence Report and the Legal
Options Report
- Identify and propose the best scenario to involve the private sector
- Develop the Term Sheet and
the Draft Concession Agreement
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- Technical Advisors will prepare:
- The Traffic Forecast Report
- The Technical Report : (MTRs, etc..)
- The Commercial Report (revenue potential)
- The Financial Report (i.e. the Financial Model which shows the
forecasted Revenues and Operations Cost as well as a Sensitivity Analysis to establish
the viability of the project from an investment viewpoint)
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- Lead/Financial Advisors:
- On the basis of the findings of the Advisors' reports, the
Lead/Financial Advisor will prepare a Strategy Report that will simply
state their final recommendations with respect to the commercial
viability of the project and the best way to tender it as a PPP
concession
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- Implementation Phase
- The Grantor/MOT approves the Lead Advisor's Strategy Report & its
recommendations
- A pre-Road show would be conducted after identifying a selected list of
potential investors
- Newspapers advertisements will be published to invite interested
parties to express their interest
in the project
- The Information Memorandum will then be issued through the website
after another advert in the newspapers for prequalification
- A Second Road Show will take place after the investors have read the
Info Memo
- An Invitation for Prequalification is then issued and the submitted
prequalification documents are
evaluated according to the pre-set prequalification criteria
- The Results of the prequalification are officially announced and
published on the website
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- Implementation Phase (continued)
- The Data Room is then opened and the Draft RFP issued to include the
Bidding Documents as follows:
- The Consultants' Reports as indicated above in Due Diligence Phase
- Information Memorandum and Cover Letter signed by the Minister
- Invitation for Prequalification
- The Bidding Documents:
- Draft Concession Agreement
- Draft MTRs and Design Brief
- Draft Invitation for Bids
- Draft Bidding Requirements, Evaluation and Assessment
- (The Bidding Requirements will be in a draft form. Pre-qualified
bidders will be invited to review the documents and submit their written
observations to MOT prior to the launch of the final Request for
Proposals - RFP)
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- Implementation Phase (continued)
- Grantor and Advisors will hold at least two pre-bid meeting to share
and discuss with the bidders their concerns and comments. All comments
and queries should be addressed to all bidders in writing. A set date
will be established after which no additional comments will be
entertained by the Grantor
- The Final RFP document will be issued
(i.e. the Bidding Documents including the Final Concession
Agreement)
- The Bids will be submitted and evaluated according to the pre-selected
evaluation team, normally a combination of specialist fro the Grantor
and the Advisors (Lead Advisors and Tech & Legal Advisors)
- The Technical Evaluation will be announced and officially sent to each
bidder, followed by a public opening of the financial bid
- The Award of the contract will follow immediately after the
announcement of the financial bid
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- Contract Signing and Closing:
- Normally a contract-signing ceremony is arranged by the Grantor
- The Grantor and the Investor will then work together to satisfy all
Conditions Precedent before a pre-set deadline, after which the
contract will be binding for both parties
- Conditions Precedent normally includes putting in place the Financing
Structure for the project, together with approvals from financial
institutions to finance the majority of the project scope. Also, proof
of investor's equity available for the project will be required by the
Grantor before Closing
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- Roads:
- Starting with Cairo/Alex/Matrouh + Port Said/Alex
- Rail:
- Starting with Ain Shams/10th Ramadan City
- Railway Stations:
- Starting with Commercialisation of some Stations
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- Creating a network of free roads connecting
Egypt major cities providing:
- International safety standards
- Accommodating increasing traffic
- Supporting the rapid pace of economic development
- Provide easy, efficient & safe access to new development areas
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- The revenue generators:
- toll fees
- advertising concessions
- service areas which shall be created on the road.
- Kafr El Zayat – Alexandria
- Distance 110 Km
- Estimated Cost 800 Million EGP
- Traffic (est.) 32,000
vehicles/ day
- Est. Increase 1.2%
Annually
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Notes
