PPP – A Way Out of Crisis?

1. PPP – A Way Out of Crisis? Vladimír Sloup – Executive Director PPP Association www.asociaceppp.cz Prague, 5.3.2010

2. Main Question: • Is it necessary to wait for pilot projects to be done before starting a local project?

3. Members of PPP Association

4. Municipal PPP Projects Public Lighting Transportation Sector Energy Schools, Social Houses Water & Waste Free Time Brownfields Greenfields

5. Municipal PPP Projects Víceúčelový sportovní areál v Tachově Nová městská čtvrť Velká Hleďsebe (Mariánské Lázně) • zrealizováno zásobování části obce teplem a teplou vodou Domov seniorů v Litoměřicích Administrativní komplex kraje Vysočina v Jihlavě Zastávky MHD v Ústí nad Labem Revitalizace autobusového terminálu v Třebíči Vodárenské projekty Školní stravování Parkovací domy Veřejné osvětlení v Praze Letiště v Tuřanech EPC projekty (úspora z energetické náročnosti)

6. Life Costs

7. PPP during Financial Crisis • it is better to build infrastructure (to support employment) than • to amortize a debt • supporting smaller projects ends up in positive impact on the regionaleconomy • to support PPP means to support meaningful and viable projects • payment mechanism enables realization of important projects without • increasing the index of indebtedness • trust of financial institutions in PPP - financial sector is involved in • preparatory stage of project (financial advisor) • accelerator of economy • the most important is clear political support on all levels (state and • municipal)

8. PPP and Public Debt • according to EUROSTAT assets involved in PPP are off balance sheet for government if the private partner bears the construction risk and at least one of either availability or demand risk • PPP is repeating obligation and therefore it is not taken as one huge debt but as a repeating debt - only the instalments are repeatedly part of the debt (e.g. maintenance, energy etc. is by its nature mandatory but costs for next 30 years are not part of the debt) • in reality the private partner does not provide infrastructure but a public service. It is done repeatedly and if they will stop to provide it rightly the public sector stops to pay instalments • contracting authority is not indebted and we even can not speak about a hidden debt – on the contrary, all the expenses are clear and given for a long time ahead

9. Study of Mendel‘s University Impact of Realization of PPP on Economy of CZ • positive impact on structure of GDP • long-term multiplier effects that are not restricted (in comparison with classical procurement) by the grow of discount rate as the consequence of grow of public debt • presently the main advantage is that we are ever able to realize investments • rating of the Czech Republic will not decrease • etc.

10. Support of PPP in the CZ = Grant Scheme of PPP Association Aim: To support repeatable examples of PPP projects on municipaland central level • An assistance during the preparation of awarding project on the finding of economically and legally optimal variant work out in a study / analysis that include description of basic technical, legal and economical possibilities of municipality for the preparation and consequently possible realization of the project. As well we offer to carry out market research on private sector interest in such projects. Participants: • Working Group for Municipal Projects, Office of PPP Association, Contracting Authorities, Members of PPP Association Proposals by: • Contracting Authorities, Members of PPP Association

11. Public Private Partnership... is dependant on quality of information www.asociaceppp.cz

12. Thank You for Your Attention www.asociaceppp.cz