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1 PPPs in the EU and implications for the Regional Level Presented by: V. Kanakoudis, Civil Eng. Phd A. Sanopoulos, Regional Planner MSc (EUROCONSULTANTS.

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Presentation on theme: "1 PPPs in the EU and implications for the Regional Level Presented by: V. Kanakoudis, Civil Eng. Phd A. Sanopoulos, Regional Planner MSc (EUROCONSULTANTS."— Presentation transcript:

1 1 PPPs in the EU and implications for the Regional Level Presented by: V. Kanakoudis, Civil Eng. Phd A. Sanopoulos, Regional Planner MSc (EUROCONSULTANTS S.A.), International Conference & Workshops, European Commission – Regional Policy DG OPEN DAYS 2005

2 2 Introduction to PPP types of cooperation between the public & the private sector types of cooperation between the public & the private sector finance, manufacture, renovate, manage and maintenance public infrastructure and provide services finance, manufacture, renovate, manage and maintenance public infrastructure and provide services either cooperating with the implementation body, or by the form of a services Provider either cooperating with the implementation body, or by the form of a services Provider where market liberation is either impossible or undesirable where market liberation is either impossible or undesirable goal is to expand to medium-scale projects. goal is to expand to medium-scale projects. PPP Types, Categories and Forms PPP Types, Categories and Forms Concessions Concessions Joint Ventures Joint Ventures Hybrid Forms: BOT, DBFO, LRO etc. Hybrid Forms: BOT, DBFO, LRO etc.

3 3 PPP Legislation Progress in the EU Weak public sector, strong PPP interest (TR) Weak public sector, strong PPP interest (TR) Strong public sector, weak PPP interest (DK) Strong public sector, weak PPP interest (DK) Strong Public Sector, strong PPP interest (UK) Strong Public Sector, strong PPP interest (UK)Conclusions Provision of a central unit Provision of a central unit Provision of legislation Provision of legislation Results in the praxis Results in the praxis

4 4 PPP Implementation Areas in the EU Strong: Roads and Bridges, Water Supply and Sewage Strong: Roads and Bridges, Water Supply and Sewage Middle: Railways, Hospitals, Airports Middle: Railways, Hospitals, Airports Weak: Schools, Public Housing, Prisons Weak: Schools, Public Housing, Prisons Typology of PPPs: Definition of Unit of the provided good, Risk allocation, Management issues Typology of PPPs: Definition of Unit of the provided good, Risk allocation, Management issues PPP Success Factors formation of strong «partnerships» formation of strong «partnerships» public acceptance public acceptance management transfer from public to private sector management transfer from public to private sector bankability & viability of the projects bankability & viability of the projects guaranty of meritocracy & performance evaluation during the contracting procedures guaranty of meritocracy & performance evaluation during the contracting procedures

5 5 PPP and Structural Funds New Programming Period New Programming Period Remaining funds for and implementation pace Remaining funds for and implementation pace Changing Status for Objective 1 regions and financial implications Changing Status for Objective 1 regions and financial implications Two choices: Two choices: 1.develop procedures for the direct combination of private funding and EU funds 2.Pre-assess a possible PPP allocation

6 6 Case Study 1: a PPP project in urban development: the new town of ZEP Kozani Case Study 1: a PPP project in urban development: the new town of ZEP (Zone of Alternate Urban Planning) Kozani Major land uses based on urban- planning regulations: Tourism Residential Regional Administration Common Facilities Regional Trade and Recreation Central Square and Common Areas

7 7 THE 4 SELF-FINANCING PROJECTS OF THE ZEP BUSINESS PLAN Project I construction of ready-built houses for Structured Urban Development sub-division of residential use 6 blocks in m 2 (A areas), with a total built surface area of m 2 Estimated cost of the investment: 35M Project II construction of buildings for Trade & Recreation sub-division with an Urban Center land use (based on concession) 4 blocks over an area of m 2 (YELLOW areas), with a total built surface of m 2 Estimated cost of the investment: 17 M.

8 8 THE 4 SELF-FINANCING PROJECTS OF THE ZEP BUSINESS PLAN Project III construction of ready-built houses for Structured Urban Development sub-division for residential use 5 blocks over an area of m 2 (the B area), with a total built area of m 2 Estimated cost of the investment: 35M Project IV construction of buildings for Tourism & Recreation use (based on concession) 1 block over a total area of m 2 (PINK areas), with a total built area of m 2 Estimated cost of the investment: 30M

9 9 DIADYMA S.A.: founded in 1996 by the Municipalities of Western Macedonia to serve the needs of Waste Management and especially to implement the Integrated Waste Management System (IWMS) of the Region (4 Prefectures, 61 Municipalities, residents, tones of MSW per year) Case Study 2: Environment Protection Project - Integrated Waste Management (DIADYMA S.A.) Financial Data: Total Budget of 65 M ( ) Mechanical Collection: 6 Μ Mechanical Collection: 6 Μ Transferring: 6,8 Μ Transferring: 6,8 Μ Recovery & Recycling: 4,1 M Recovery & Recycling: 4,1 M Mechanical Separation & Treatment: 31,5 Μ Mechanical Separation & Treatment: 31,5 Μ Sanitary Land filling & Restoration: 11,2 Μ Sanitary Land filling & Restoration: 11,2 Μ Other: 5,3 Μ Other: 5,3 Μ

10 10 Integrated Waste Management System Environmental Impact Studies Environmental Impact Studies Systems Design & Optimization Systems Design & Optimization Systems Development & Management Systems Development & Management Technical & Feasibility Studies Technical & Feasibility Studies Tenders for Study Assignments and Facility Construction Tenders for Study Assignments and Facility Construction Facilities Planning & Construction Supervision Facilities Planning & Construction Supervision Software Development & Logistics Support Software Development & Logistics Support Supporting Infrastructure co-financed by the CF ( ): Total budget (initial, 2001): 13 M Total budget (initial, 2001): 13 M Contracts (March 2004): 11 M Contracts (March 2004): 11 M Deductions (March 2004): 2 M (15%) Deductions (March 2004): 2 M (15%) Expenditure (June April 2004): 4 M Expenditure (June April 2004): 4 M Planning Implementation

11 11 Recycling Facilities: the PPP challenge The Mechanical Separation and Composting Plant is scheduled to be completed by 2007: recovery is expected to exceed 70% before the year 2010, resulting into local tax reduction and systems optimization The Mechanical Separation and Composting Plant is scheduled to be completed by 2007: recovery is expected to exceed 70% before the year 2010, resulting into local tax reduction and systems optimization The total budget for the materials recovery & treatment infrastructure is estimated at 26 M until 2007 The total budget for the materials recovery & treatment infrastructure is estimated at 26 M until 2007 Private investment is expected to exceed 10 M (energy recovery unit not included) Private investment is expected to exceed 10 M (energy recovery unit not included)

12 12 Municipal Dept of Vatsounia (Population: 520 habitants, Income sources: agriculture, cattle-raising) HYDROYLEKTRIKI S.A.: A small hydropower plant producing 600KW/h, provided to the Public Electric Power Utility Stockholders/shareholders: Municipal Dept of Vatsounia: 35% + Local population: 65% Capital stock: which is divided in nominal stocks of face value of 29,34 per item Case Study 3: Construction & Operation of a small hydropower plant by a wide public base enterprise The Public Power Corporation S.A. has undertaken the commitment to buy electric power from HYDROYLEKTRIKI S.A.

13 13 Environmental Friendly Renewable Power Source Environmental Education Landscape remains the same New Working Places Local Population stays Agro-tourist development motives E = KWh/year PROJECT DATA VIABLE PROJECT!!!

14 14 Construction Cost = Construction Duration = 2 years Economic Lifetime = 19 years VIABILITY CONTROL - EVALUATION attractiveness viability in 2000, the project was awarded by the Center of Renewable Energy Resources as the best innovative initiative among the Greek local authorities Inflation trend = 2% - 4% Maintenance Cost 1% Operation Cost 7%

15 15 PPP Conclusions 1.Legislative Framework and Empowerment of the Local and Regional Authorities 2.Capacity Development at National,Sectoral and Regional Level 3.Compatibility with Structural Funds Regulations and National Co-financing Procedures 4.Establishment of an Independent Authority for Conflict Resolution 5.Assistance in the PPP drafting phase


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