Poland’s A2 Motorway Operational Risks Team 2: Yusuf Akkoca Tom Bloom Karen Delton Shweta Hire Eric Johnson David Mahzonni

Operational Risks Defined: “The risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events” - Basel Committee “A form of risk that summarizes the risks a company or firm undertakes when it attempts to operate within a given field or industry. Operational risk is the risk that is not inherent in financial, systematic or market-wide risk. It is the risk remaining after determining financing and systematic risk, and includes risks resulting from breakdowns in internal procedures, people and systems”. - Investopedia

Heat Map Consequence Likelihood OC Managing/Operating Motorway - Lack of Experience 2Toll Revenue - Affected by alternative routes 3Toll revenue impacted by national economy 4Poznan bypass not completed 5Can operational income fund maintenance and debt 6Toll charge too high or too low

Operational Risk # 1 Risk: -Operation Company (OC) managing and operating the motorway poorly. ID & Assessment - No, not considered Risk Bearer - Autostrada Wielkopolska, S.A. (AWSA). Mitigation - Closely monitor management of operations

Operational Risk # 2 Risk: -Toll route negatively affected by alternate transportation routes. ID & Assessment - Identified & Assessed Risk Bearer - AWSA Mitigation - Government concession agreement to not build or improve competing roadways.

Operational Risk # 3 Risk: -Toll route negatively affected by the national economy. ID & Assessment - Yes, identified & assessed. Risk Bearer - AWSA, Government & Banks. Mitigation - Insurance

Operational Risk # 4 Risk: -POZNAN bypass not completed by the government. ID & Assessment - Identified and assessed Risk Bearer - AWSA Mitigation - Concession agreement with government

Operational Risk # 5 Risk: -Will operational income fund maintenance and debt services? ID & Assessment - Identified, but do not understand full ramifications. Risk Bearer - AWSA, banks, shareholders & citizens. Mitigation - Close monitoring and management of toll prices.

Operational Risk # 6 Risk: -Toll charge priced too high or too low. ID & Assessment - Identified & assessed, but not accurately. Risk Bearer - AWSA, banks & government. Mitigation - Reiterative evaluation and flexibility of toll rates.

Cash Leakage OC income from a fee not from tolls, so tolls may not be gathered. Lost tolls, or more expensive maintenance will reduce debt service. Toll booth operators pocketing tolls money.

Thank you! Team 2: Yusuf Akkoca Tom Bloom Karen Delton Shweta Hire Eric Johnson David Mahzonni