1. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC Public-Private Partnerships & Risk Management The Contractor’s Perspective Matt Girard Vice President Business Development Flatiron E-mail: mgirard@flatironcorp.com Direct: 720-494-8110 Cell: 303-994-4609

2. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC Contractors have 2 overall categories of P3 risks - 1 – Pursuit Risks: Pre-bid 2 – Contract Risks: Project

3. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC 1) Elevated Pursuit risks - Why is this even a risk if it’s during Pre-bid phase?  Contractor’s investment  Extensive senior management time - potential for lost opportunity  Spend ~1.0 – 1.5% of project value - (engineering, estimating, legal)  Does NOT include Concessionaire costs, which are typically much higher

4. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC 1) Elevated Pursuit risks - How does a risk get realized in this phase?  A project does not happen – “it melts away”  Political or public policy issues (Miami Tunnel)  Legal authority or challenges (Penn Turnpike)  Permit challenges (Foothills South, Legacy)  Funding limitations or budgets (BART’s OAC, MoDOT’s 800 Bridges)  Financial feasibility does not work (OR bridges)  Procurement completely changed (SH121)  A LONG list of such projects in the U.S.

5. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC 1) Elevated Pursuit risks - How does a contractor manage this Pursuit risk?  DON’T pursue a project where there is a reasonable chance the project will “melt away”  Pursue projects with reasonable stipends that will cover a share of these expenses

6. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC 2) Elevated Contract risks - DB type risk – and then some  LD amount – tied to financing amount (I-35W example - $200k/day)  Force Majeure – VERY limited protection  Site Conditions and Geotech  Cost escalation  Longer term warranty (latent and patent)  Cashflow matters (behind and ahead)

7. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC 2) Elevated Contract risks - How are these elevated risks evaluated & managed?  More pre-bid research  Better planning pre-bid and post-bid  Some insurance, but also some contingencies  “Survival of the Fittest” (i.e. manage it better)

8. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC 3) How does a lender or Concessionaire look at construction risks? Contractor has to guarantee their performance - period  High liability caps  Letter-of-Credit  Parent Company Guarantees

9. January 14, 2009 Transportation Research Board A HOCHTIEF Company Washington, DC Matt Girard Vice President Business Development Flatiron E-mail: mgirard@flatironcorp.com Direct: 720-494-8110 Cell: 303-994-4609 Q & A ?