This document discusses public-private partnerships (PPPs) for transportation projects, specifically bus rapid transit (BRT) systems. It provides an overview of different types of PPP models and considerations for whether a project is suitable for a PPP. Key factors that determine if a PPP will attract private sector investment are outlined. Examples of successful and failed BRT PPP projects in various countries are presented, along with different payment structures used. The document concludes with recommendations for how cities can structure BRT projects to attract private capital through PPPs.

1. Public-Private Partnerships!
! Presented at Transforming Transportation 2014!
! Graham Smith!
! HSBC!
Transforming Transportation 2014!

2. What is PPP?
January 2014
Presented by: Graham Smith

3. What is PPP?
P3
P³
PFI
BOT
BOOT
BOO
BLT
DBFO
DCMF
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4. What is PPP?
• Public sector purchases services
• Private Sector conceives, sets up, operates, assumes risks
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5. Is it always appropriate for Governments?
• Not for all projects, not appropriate for low capital value projects
• Where risks over project life cannot be costed
• Where demand for services in the future cannot be reasonably predicted
• Where private sector does not have the expertise to deliver
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6. Is it going to be attractive to the private sector?
• Is it potentially profitable?
• Is there Government support?
• Are multiple Government Agencies involved? (fractured government
• How protective is PPP/concession contract law?
• Can risks be assessed/mitigated?
• Is financing available?
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7. PPP’s in Urban Transport
• UK, Colombia, Chile, South Africa, Panama, Malaysia
• Which countries failed?
• UK, Colombia, Chile, South Africa, Panama, Malaysia
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8. Government
Public
Infrastructure
and Services
Performance/Contract Compliance
Capital Investment
Regulations
Taxes, Votes
Debt payment
Fares
Lenders
Operators
Financing
Taxpayers
Level of Service
Service users
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9. What should a BRT City be thinking of?
• What do they want delivered
• How to calculate value for money (VFM)
• Will the market view a PPP as potentially profitable?
• Is there anything similar-tested/failed?
• Is there competition between service providers?
• Risk of “adventurers”
• Can they regain control of transport from the current operators in order to go for a BRT?
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10. What should a Concessionaire be thinking of?
• Can risks be costed over all of project life
• Minimum revenue support?
• How will service quality be defined and measured?
• Profitability/competition/shareholding control/low cost, long term financing
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11. PPP payment structures used in BRTs
• Transantiago, Chile
Payment per passenger transported but
Guaranteed minimum revenue, payments per km and per place offered, income increased in line with costs
• Rea Vaya, South Africa
Payment per km but
Undertaking to always cover financial and operating costs
• Metrobus, Panama
Payment per passenger transported but
Monopoly operator, income increased in line with costs, protection from competition from Metro
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12. Who chose the buses?
The City
Johannesburg
The Operator
Santiago/Panama
or the financier?
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13. Case Studies – Rea Vaya
• Rea Vaya
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14. Case study – Rea Vaya
• Clidet 957 – a strange name for a bus company
• When is a Project not a PPP – then it is…
• When is an SPC ranked the same as a City?
• Will the bank steal my buses?
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15. Case studies - Transantiago
• Transantiago
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16. Case study - Transantiago
• Estevez, Espejo, Cortazar, Morande, Errazuriz are all examples of?
• How many times can you change the rules?
• How difficult can it be to measure performance?
• Avoid Adventurers…
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17. How to attract private capital
• Maintain economic equilibrium
• Respect the concession contract in word/spirit
• Talk to and work with the financiers
• Remember just how many BRT projects there are in the pipeline
• Be prepared to renegotiate the concession to make it financiable
• Local is not always best
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