Presentation on theme: "MRT – 7 Project Presentation June, 2007. The MRT – 7 Project June 2007 A lead Infrastructure Project Metro Manila, Philippines Multi-purpose Transportation."— Presentation transcript:
MRT – 7 Project Presentation June, 2007
The MRT – 7 Project June 2007 A lead Infrastructure Project Metro Manila, Philippines Multi-purpose Transportation Solution with Real Estate Development Component
Enhancing infrastructure priority development project thru partnership between the private and public sectors
MRT - 7 Project Elevated MRT –12.11Km At-Grade MRT –6.655 Km Open-Cut MRT –1.445 Km Tunnel MRT –0.785 Km 6 Lane Road –22.0 Km
MRT -7 Project Mission Transportation - not only providing reliable connection for Commonwealth, Fairview and Bulacan commuters, but uniquely addressing decongestion of EDSA by providing an alternative route for the provincial buses from the North. Decongestion - of Metro Manila thru obligation for the construction of the satellite town in San Jose del Monte. Ridership Risk - Uniquely and first time undertaking of private sector to assume full responsibility for the ridership risk and the O&M cost.
MRT -7 Project Mission Energy Savings – NEDA study indicates project causes $2.4Billion in Forex savings over the concession period base on crude oil price of $50 per barrel. Employment – the project and the satellite township undertaking will create over 20,000 new jobs throughout the concession period. Housing – uniquely creating for the low and middle class income group an affordable housing linked by transportation arteries to their work destinations.
MRT -7 Project Mission Air Pollution – Significantly reducing air pollution over the Metropolis Investment – opening opportunities in the project and its real estate development for $3Billion foreign and local investment pump priming of the economy.
Financial Overview PROJECT COST $1.235B SOURCESUSES EQUITY $ 309 MillionPROJ. CONSTRUCTION & EPC CONTRACT (about) $ 1,000 Million ECA LOANS $ 800 Million OTHER LOANS $ 126 MillionOTHER PROJ. COST (about) $235 Million Total $ Billion
FINANCIAL & ECONOMIC VIABILITY (BASIC) Project EIRR 21.8%* Project FIRR 11.5% Investors FIRR 11.9% Government FIRR Deficit Neutral * Excluding Road and Real Estate Development
Fund Source $100 M DEBTEQUITY US$309M US$926M $109 M $126 M $800M of EPC = $1,000 M
Intermodal Terminal Sixty (60) slots for simultaneously bus loading / unloading. Train underground Second floor providing facilities for up to 3,000 waiting passengers for their rides Complex provide eleven (11) sets of escalators for rapid movement of commuters.
Real Estate Development Opportunities Private investors to develop 2 Million sq. meters residential space 900,000 sq. meters commercial space, malls, and community development facilities throughout the concession period.
Investors Recovery US$ 108 Million per year capacity fee payment for 20 years 70% Sharing of net passenger revenue after O&M 80% Sharing in advertising and commercial development over the stations. Real Estate Development Income Capacity fee of US$100,000 from year 2032 to 2037 Government commits to fare adjustments
Government Recovery of Amortization Payment 30% Sharing of net passenger revenue after O&M 20% Sharing in advertising and commercial development over the stations. 20% Sharing on Real Estate Development Project and real estate development projected taxes Increase ridership to Government operated rail system. NPV (10%) of total Government undertaking $620 Million. Mere payment for gradual transfer of the assets worth US$1.2Billion. Government to recover its entire exposure thru tax benefits from the various activities generated by the project and the real estate development
Passenger Fare Unified fare is assumed per km for all existing Mass Transit project Fare is based on LRT-1 and MRT-3, 2003 per km and adjusted to reflect inflation and foreign exchange fluctuation. Agreed formula for incremental fare adjustment Per agreed concession agreement, if actual fare is not adjusted to agreed fare, Government shall pay the difference thru deduction from other government revenues resulting from the project. Extra ordinary fare adjustment is provided for in the concession agreement when circumstances require.
Philippine Macro Economics Balanced deficit is consistently reduced Balanced budget projected by 2008 – two years ahead of schedule Continuously reduced foreign debt Inflation much restrained (from Double Digit in the 90s to around 3% at present) Larger inflow of stable foreign remittances (OFW) Larger tax collection Economic growth in the first quarter of 2007 reached 6.9%, best in 17 years Credit rating is improving and expected to rise next quarter. Overall economic outlook best since 1978 much better than 2001 when proposal was made.
Project Risks Country risk Philippine Outlook much improved Sovereign risk and risk of repatriation can be insured thru OPIC/MIGA and the like Construction cost is mitigated thru single point of responsibility contract with an EPC contractor at fixed price. Cost overruns due to delays and inflation (ROP faults) adjustment provided in the contract O & M Cost Agreements with maintenance and project engineering management groups In-house Experienced Team Market risk thru conservative ridership assumption and agreed fare structure (Metro Manila traffic is overwhelming).
Project Schedule TARGET DATES: Complete Swiss Challenge- June 2007 Project Awarding- October 2007 Contract Signing- December 2007 Financial Closing- December 2008 Start of Construction of Rail- July 2010 Start of Real Estate Construction - July 2011 Rail Project Completion- July 2012
Project Task Completed ACHIEVEMENTS (February 2001 – February 2007): –Ridership studies –Endorsement by DOTC of ULC (BVI) as the Original Proponent –NEDA-ICC first and second pass approvals –NEDA Board approval for publication of Swiss Challenge –Department of Justice clearance of the Terms of Reference for Swiss Challenge –Publication of Swiss Challenge bid closing date on June 2007
Project Task PENDING (April 2007 – December 2007): –Finalize pending negotiations for the following agreements: Engineering and Procurement Contract Operations and Maintenance Contract Project Engineering Management Contract Financial Services Contract –Matching, if necessary, of possible Swiss Challenger –Negotiate details of the Concession Agreement Performance Bond on Real Estate Development
Invest in ULC (HK), the SPC (excluding investments in the Real Estate Company and the Vertical Development) BASIC ASSUMPTION Cash Flows from Capacity Fees and Net Passenger Revenues with 300,000 initial ridership (in million US$) Year Equity Infusion Projected Gross Pax Rev. GOP Share in Pax Rev. Capacity FeesO&M Loan Repayment Income Tax Net Flow to ULC -3(120.0) (100.0) (88.9) (2.7) (35.0) (100.1) (4.7) (36.8) (100.1) (6.9) (38.6) (100.1) (9.1) (40.5) (100.1) (11.8) (41.3) (100.1) (27.4) (45.6) (115.7) (27.0) (34.7) (47.5) (37.5) (34.6) (37.6) 108.0(50.4) (37.5) (39.2) (43.0) (55.6) (21.9) (58.0) (49.1) 0.1 (61.4) - (32.3) years IRR4.6%8.6%11.2%11.8%
Invest in ULC (HK), the SPC (excluding investments in the Real Estate Company and the Vertical Development) Project Sensitivities Project Cost O & M (initial year, escalating at 5% every year) Investors FIRR at US$ Bat US$ 35 M11.8% at US$ B 10% decrease at US$ 31.5 M12.2% 10% decrease at US$ Bat US$ 35 M14.0% 10% decrease at US$ B 10% decrease at US$ 31.5 M 14.4%
Invest in ULC (HK), the SPC (excluding investments in the Real Estate Company and the Vertical Development) Project Sensitivities Project Cost O & M (initial year, escalating at 5% every year) Investors FIRR at US$ Bat US$ 35 M11.8% at US$ B 10% increase at US$ 38.5 M11.4% 10% increase at US$ Bat US$ 35 M10.0% 10% increase at US$ B 10% increase at US$ 38.5 M 9.6%
Project Proponents Universal LRT Corporation (with 15 local and international investors) A consortium of Alstom and Bouygues of France O&M service provider, SMRT Singapore Subsequent to Swiss Challenge price matching mechanism as provided by the BOT Law, several institutional investors including the IFC are expected to join.
Universal LRT (BVI) Corporation Board of Directors Mr. Roberto F. de OcampoDirector Former President, Asian Institute of Management Mr. Eli Levin Managing Director (CEO) Chairman, E.L. International Holdings (BVI) Ltd. Mr. Vicente V. de VillaExecutive Director Executive Director, E.L. Enterprise, Inc. Mr. George Y. UyExecutive Director Executive Director, E.L. Enterprise, Inc. Mr. Roberto Jose L. CastilloDirector President and COO, EEI Corporation Mr. Antonio A. HensonChairman of the Board President, SM Investment Corporation Ms. Imelda D. BautistaDirector Chairwoman & CEO, Premier Gold Group Ltd. Mr. Sergio Ortiz – LuisDirector Former Chairman, Export and Industry Bank
Mr. Jovencio F. Cinco Director President and CEO, Penta Capital Investment Corporation Mr. Geronimo Velasco, Sr.Director Chairman, Hollington Management Ltd. Mr. Jose Tan SioDirector Exec. Vice President & CFO, SM Investment Corporation Mr. Claudio B. AlturaDirector Chairman of the Board, TCGI Engineers Mr. Wellington Y. TongDirector Representative, Merlin Capital, Inc. Mr. George GoDirector Mr. Geronimo F. Velasco, Jr.Director President, Hollington Management Ltd. Universal LRT (BVI) Corporation Board of Directors