Presentacin de PowerPoint

1

M-30 Ring-Road Project Financial
Structure MAY 2007
2
INDEX

• Project description
• Company structure
• Financial structure
• Quality Service
• Model Benefits

2
3

Project Description

• The Project Remodelling of the roads and the
  area occupied by M-30 ring-road.
• Road surface refurbishment. Mainly intersections
• Reroute major sections through tunnels under the
  city areas
• Allow the surface areas to be redeveloped into
  green park areas

• Expected Benefits
• Accident rate will fall significantly (aprox 45)
• Fuel consumption will reduce by 2.5 million
  liters per year.
• 708 million hours of travel time will be saved
  over the next 30 years
• Greenhouse gas emissions (CO2) will be reduced
  progressively from a 35,000 tons drop in 2007 to
  64,800 tons in 2037

3
3
4

Phase 1 works
14

• . Refurbishment of the intersection between the
  M30 (nudo de la Paloma) and the Pio XII and
  Burgos Avenues.
• 2. Refurbishment of Calle Costa Rica and Plaza de
  J.M. Soler and their intersections with the M30.
• 3. Refurbishment of the M30 intersection with the
  Avenida de América (A-2).
• 4. Improvement of the intersection between the
  eje M-23 ODonnell and M30.
• 5. Improvement of the intersection between M30
  and the A-3.
• .1. Left lane of the intersection between Paseo
  de Santa Maria de la Cabeza and the A-3 from the
  south by pass of the M30.
• .2. Right lane of the intersection between Paseo
  de Santa Maria de la Cabeza and the A-3 from the
  south by pass of the M30.
• 8. Connection between calle Embajadores and M40
  ring road.
• 9. Burial underground of Avenida de Portugal from
  Paseo de Extremadura to M30.
• 10.1. Burial iunderground of the crossroad of
  Puente del Rey Avenida de Portugal between
  Puente de Segovia and Marqués de Monistrol
  Avenue.
• 10.2. Burial underground of M30 from Puente de
  Segovia to Puente de San Isidro.
• 11.1. Burial undergound of M30 from Puente de
  Segovia to Puente de Praga.
• 11.2. Burial underground of M30 from Puente de
  Praga and Nudo Sur.
• 12. Service route for the M30 in the northwest
  area and addition of three lanes in the
  intersection with M30 west area.
• 14. Construction of a new access to the Avenida
  de la Ilustración with the Colmenar M-607 road.

12
1
2
3
Project Description
River Porject
10.1
4
9
10.2
5
11.1
7.1
11.2
7.2
Bypass
M-30
8
Sections of the works
Tunnels
4
4
5

Company Structure I
PPP Public Private Partnership

• Company evolution
• Initially, Madrid Calle 30 SA was a 100 public
  company (direct management)
• Constitution date 21st May 2004
• Initial Capital 70 million, fully founded by
  the Madrid City Council
• 23rd December 2004 Municipal agreement that
  transform the company into a public/private
  economy (indirect management)
• Benefits of the Model PPP
• Greater capacity of financing
• Lower financial cost
• Contractual schedule fulfilment. Infrastructure
  deadline and the commencement of the MO process
  both on time.

5
5
6
Company Structure II

• Public Tender offer for the MO of the public
  service for the refurbishment, conservation and
  operation of the urban road M-30 by a
  public/private economy company.
• Private Partner incorporación date 12th
  September 2005

• Additions
• Hold 20 of MC30 shares
• Provide a subordinated loan
• Know-How of services performance included in the
  M-30 integral management agreement
• Gains
• Management payments
• Dividends for capital participation
• Subordinate loan interests
• Duration
• 35 years from the constitution date. There is a
  put/call option on the 20th year

Private Partner
6
6
7
Company Structure III
Dividends
Monthly payments of Operating Management
Equity
Equity
Subordinated Debt
Performance Payments Interest subordinated loan
repayment Dividends
Monthly construction payments
Interest Loan repayment
Construction Companies
Senior Debt
Bank Syndicate
7
7
8
Company Structure IV
Contractual Structure

•  General agreement between MC30 and Madrid City
  Council.
• Service Agreement between MC30 and the
  privately-owned company EMESA
• ConstructionDesign Contracts between the MC30
  and the Contractors
• Shareholders agreement between Madrid City
  Council and the EMESA (private partner) on
  regards the equity participation on MC30.
• Financing agreements between the banks and MC30.
  Additional interest rate coverage contracts.
• Subordinated debt from EMESA to MC30.

8
8
9
Financial Structure I
(100)

• Facility A 1.350 Mill.
• Term 30 years, Grace period 5 years, Average loan
  life 24 years
• Guarantee Basic Payment

Debt 80

• Facility B 1.150 Mill.
• Term 20 years, Grace period 3 years, Average loan
  life 14 years
• Guarantee Additional payment plus the rest of
  the Basic payment

TRIPLE 80/20
FINANCING SOURCES 100
2.500 Mill.
Share Capital 80
Madrid City Council 80
(12,8)
(16)
Own Resources 20
Private partner 20
(3,2)
456 Mill.
Subordinated Debt 20
(4)
570 Mill.
114 Mill.

• Ratio Senior Debt / Own Resources 80/20
• Ratio Share Capital / Subordinated Debt 80/20
• Ratio Municipality / Private Partner 80/20

9
9
10
Financial Structure II
Additionally, it was defined a contractual
relation between Equity / Investment cost 16
Initial Financial Model
Final Financial Model
Differences

• Construction Cost 2.850,0 mill 3.180,0
  mill 330,0 mill
• Equity amount 456,0 mill 509,0
  mill 53,0 mill

• Subordinated Debt 114,0 mill
  127,3 mill 13,3 mill

• Temporary financial recourses
• Senior Debt (B) (2007-2010) 75,0 mill
  75,0 mill
• VAT Loan (2007-2008) 155,0 mill
  155,0 mill

10
11
Financial Structure II

• Investment Tunnel construction cost 3.180,00
• Financial cost Capitalized interest 318,97
• Operational Cost 105,26
• Taxes 0,00
• Other Costs 1,00

USES
3.606,23

• Equity 509,00
• Subordinated Debt (AB) 202,24
• VAT Loan 0,00
• Senior Debt 2.500,00
• Annual Payments (MO) 516,09

SOURCES
3.727,33

• Repayment Facility B 102,81

18,30

• Free Cash-Flow 31/December/2008

11
11
12
Financial Structure II
266,7 mill
Monthly payments By Operating Management
407,2 mill
101,8 mill
Equity (80)
Equity (20)
202,3 mill
Subordinated Debt
24,1 mill
Performance Payments
Monthly works payments
3.180 mill (sin IVA)
Construction Companies
2.500,0 mill
Senrio Debt
Sindicato Bancario
12
12
13
Quality Service I

• Madrid Calle 30 is the company responsible for
  developing the Operation and Management services
  of Madrid ring-road M-30
• Conditions of service implementation
• Fulfilment of the technical and quality standards
  fixed by the Administration and assumed by the
  Company in the bid proposal.
• It was NEVER considered by the Madrid City
  Council the Direct toll or the Shadow toll as an
  alternative concessional model.
• Payments The administration annual payment is
  split in two components
• Basic Payment (95,98 millions of 2005)
• Initially fixed (at contract date) and constant.
  Annually updated by CPI
• Can be considered as a Minimum Guaranteed Revenue
• Guarantee the payment of part of the Debt Service
  (Facility A) to the financial institutions
• Additional Payment (170,70 millions of 2005)
• The amount directly depends on service level
  (technical and quality standards)
• Can present discounts according to the results of
  the MO program audit

13
13
14
Quality Service II

• Risk and Venture Its fully accepted by the
  company Madrid Calle 30 SA
• Basic payment is always guaranteed. Minimize part
  of the financial risk allowing MC30 to obtain
  better conditions (lower interest rates in
  Facility A)
• Standards levels
• Achieved 100 of the Additional payment. No
  deductions are applied
• Not achieved Deductions are applied. The
  discount over the Additional payment amount will
  be directly related to the audit result.
• Higher levels achieved No higher payments. In
  this situation, there is no back-to-back criteria.

Lower performance
Deductions are applied
Contractual Service Levels
Contractual performance
100 of Additional Payment
Higher performance
14
14
15
Quality Service III
Annual Remuneration 266,68
Basic Payment 95,98
Additional Payment 170,70
(Values in Millions Euros of 2005)
15
15
16
Quality Service IV
ACCIDENT and EMERGENCY Management
Indicator Definition Percentage of incident,
accidents and emergencies dealt with on time in
relationship to the total number within an audit
period.
Indicator value according to contractual
standards levels 100
Bi-annual audits to determine the service level
given by MC30
16
16
17
Model Benefits - Conclusions

• The Administration obtains an important reduction
  in the total project cost.
• The management of the M30 road its shared with
  the Privet Partner. From the general interest,
  the know-how and the resources provided by the PP
  increase the benefits achieved by the project.
• The bi-annual testing quality and availability
  parameters, allow the Administration to directly
  supervise the private performance.
• Transfer of construction risk and service
  capacity to the public/private economy company.

17
17
18
18
18