PPP in the space sector C. La Rocca Italian Space Agency Roma – 2 Dicembre 2011

Summary  Premises  PPP models  PPP experiences in the European satcom projects  PPP experiences in ASI 2

A precursor: Italcable  Perhaps the first historical example of public-private cooperation in the modern telecommunication field  In Argentina,the news about the armistice at the end of the first world war reached our italian emigrants with delay, causing lot of disappointment  On the wave of that disappointment, in august 1921 Giovanni Carosio, with the economical help of the italian emigrants in Argentina, founds the Compagnia Italiana dei Cavi Telefonici Sottomarini, with the aim to reach an agreement with the Italian Government for setting up the first transatlantic cable  In september of the same year, the agreement with the Italian government is reached  In 1941, after the fusion with Società Italo Radio, this public-private company change its name in ITALCABLE  The two enablers for the first time together: the ownership of the infrastructure, and the permission to use it as a public resource 3

Premises - 1 Long duration of the relationship between the public and the private partners Amplification of the project funding capabilities Risk distribution between the partners Cooperation terms defined in the contract Responsibilities, costs and risks defined in the contract Pubic interest and commercial goals served – better results for the same cost Each party retains its own identity and responsibility 4

Premises - 2  Trends:  Increasingly used in infrastructure sectors  Governments require alternative forms of infrastructure service provision due to issues involving public funding, operational efficiency and risk  Some sectors abroad now mainly driven by PPP models (road, utilities…)  Complex contract models requiring significant coordination efforts  Some contractual models (e.g. BOOT – Build, Own, Operate and Transfer) have gained more interest than others and thus became standard models 5

6 1.Involved sectors Current and pre-tender projects Europe by Capital value Premises Involved countries

PPP models - 1 PPPs span a spectrum of models that progressively engage the expertise or capital of the private sector: At one end, there is a straight contracting out as an alternative to traditionally delivered public services, based on direct execution or labour At the other end, there are arrangements that are publicly administered but within a framework that allows for private finance, design, building, operation and possibly temporary ownership of an asset 7

PPP models - 2 Design – Build (DB) Operate and Maintain Contract (O&M) Design – Build – Finance – Operate (DBFO) Build – Own – Operate (BOO) Build – Operate – Transfer (BOT) Build – Own – Operate – Transfer (BOOT) Buy – Build – Operate (BBO) Joint – Venture Operate (JVO) Concessioning 8

PPP experiences in the European satcom projects Alphasat (UK) BO Model (BOO modified) Hylas (UK) BOO Model  Satcom commercial market  Military market Satcom BW (Germany) Service Contract Skynet 5 (UK) PFI

PPP experiences in the European satcom projects  Other satellite projects Galileo(EU) Satnav Concessione Radarsat 2 (CAN) EO Design-Build- Operate TerraSAR (GER) EO Alliance

Italsat Italsat has been the first PPP program handled by ASI: it included two Ka, regenerative and OBS telco satellites, launched in 1991 and 1996 respectively The business model was a PPP precursor, implemented by both ASI and Telecom Italia ASI was responsible for space & ground control segment development, F1 manufacturing and launch, and F2 manufacturing Telecom Italia was responsible of F2 launch and ground traffic segment development Operations and services marketing were under Telespazio / Telecom Italia responsibiity 11 PPP experiences in ASI- 1

e-geos A company between ASI (20%) and Telespazio (80%), being a leading international player in the geo-spatial business Offers a whole range of products and services in the Earth Observation and in the geo-spatial application domains, based on both optical and radar satellites as well as on aerial surveys Exclusive distribution of the Cosmo- SkyMed radar data on the commercial market 12 PPP experiences in ASI- 2

SIGMA New telco program, oriented towards networking and broadcasting services, in Ka and Ku band respectively, for the institutional customers Overcoming the digital divide: symmetrical and asymmetrical connectivity for those areas poorly (or not at all) served by the fiber network. 100% coverage for the public administration services Disaster recovery in case of major outages of the fiber network Redundancy for mission critical and life critical services Theater telcos for peace keeping and peace enforcement missions abroad 13 PPP experiences in ASI- 3

ASITEL The vehicle PPP company recently incorporated to implement the SIGMA program Currently 100% owned by ASI. The private partners will join shortly, preserving the public majority The company will be responsible for infrastructure investments (SIGMA), and will maintain the ownership of the assets The company mission will be mainly to grant first class telco services to institutional and governmental entities 14 PPP experiences in ASI- 4