1. Public-Private Partnership (PPP) Alstom Transport’s experience
Philippe Pegorier, Martin Vaujour
03/06/2011

2. Agenda ALSTOM GROUP ALSTOM TRANSPORT TURNKEY SYSTEMS
PPP – AT’s EXPERIENCE
CONCLUSION

3. Alstom

4. Three main activities 96 000 employees in 70 countries Power sector
Equipment & services for power generation
Grid sector
Equipment & services for power transmission
Transport sector
Equipment & services for rail transport
Alstom is a world leader in rail transport and energy infrastructures.
The Company is organised in three Sectors: Transport for rail transport, and Power for power generation and Alstom Grid for electricity transmission.
On June 8, 2010, Alstom and Schneider Electric finalised the acquisition of the transmission and distribution business of Areva. The transmission activity, named Alstom Grid, became the group’s third sector, alongside the Power and Transport sectors.
Alstom Grid supplies all the equipment and systems for transmitting electric current and managing high-voltage electricity grids (from 52 kV to 800 kV in direct current and 1200 kV in alternating current).
The Company is present in more than 70 countries and has a global workforce of 96, 000 people
Alstom is chaired by Patrick Kron.  

5. Three main activities 3.5 €bn 13.9 €bn Transport 5.8 €bn Grid Power
(2009)
19%
30%
Power
13.9 €bn
51%
Total sales 2009/10 : €23 bn*
* Proforma figures

6. Alstom Transport

7. A worldwide presence 26 000 employees in more than 60 countries
North Europe
5 800
22,1%
France
8800
33,6%
CEI 20
0,1%
North America
1 100
4,2%
Latin America
2 500
9,5%
South Europe
6700
25,5%
Asia Pacific
1 300 5%

8. Alstom Transport, the only railway multi-specialist
The only manufacturer in the world to master all businesses of rail sector
The most complete range of systems, equipements and services:
- Rolling stock
- Infrastructures
- Signalling
- Services
- Turnkey systems
N°1 in high and very high speed
N°2 in urban transport (tramways, metros)
N°2 in signaling
N°2 in maintenance
Alstom Transport’s differentiator on the market is its multi-specialist positionning.
From Rolling Stock to signalling equipment & infrastructure and maintenance, our strength – and our added value in comparison to our competitors - lies in providing our customers with global solutions designed after listening to their requirements.

9. A wide range of products and services
Rolling stock : from trams to very high speed…
DISTANCE
Locomotives
Very high speed
Regional
Suburban
Tram-Train
Metro
High speed
Alstom Transport offers a range of rolling stock that combines technology, reliability, styling and comfort, using standardised components and paying particular attention to design.
With its comprehensive range of high speed (Pendolino) and very high speed trains (AGV / Duplex) Alstom Transport is the market leader.
Alstom Transport places comfort and travellers’ accessibility at the heart of trains’ design.
Split of Rolling Stock Sales by product ( )
Very high speed : 16%
Regional* : 40%
Tramways : 6%
Metros : 32%
Locomotives : 6%
* including X'Trapolis, Coradia, Pendolino
SPEED
Tram

10. A wide range of products and services
Infrastructure, signalling, services and maintenance
SIGNALLING
SERVICES AND MAINTENANCE
Full Maintenance Management
Spare parts management
Renovation
Traintracer
INFRASTRUCTURE
Track laying
Electrification
Electric power supply
Electromechanical equipment
Atlas
Revolution in interoperable drive systems
Urbalis
Optimal and efficient monitoring of complex urban transport systems
Infrastructures
Alstom Transport proposes a complete range of sustainable solutions for track laying, electrification and electric power supply for lines, and the supply of electromechanical equipment for installation alongside tracks, in stations and in depots. Alstom Transport supplies workshops, the necessary equipment and a qualified workforce.
Information Systems
At the cutting edge of information solutions, Alstom Transport provides operators with the means to guarantee entirely safe and fluid transport of passengers or goods, thereby optimising productivity for networks.
Services
Alstom offers a range of customised services to public or private rail operators. The objective is to guarantee global, safe and optimised management of rolling stock – whether it is manufactured by Alstom or not – and equipment throughout its operating life cycle: maintenance, renovation, spare parts management, technical support and assistance…
Turnkey systems
Faced by projects’ growing complexity, operators often seek global answers to their needs. Alstom Transport combines all its transversal know-how as a multi-specialist manufacturer to manage complete rail systems: rolling stock, signalling, infrastructure, services…

11. Turnkey systems

12. Optimised turnkey engineering phase
Alstom has a large system engineering team which guarantees
Co-ordinated turnkey design team integrating each subsystem
Selection of products and solutions to optimize the Life Cycle Costs
Sophisticated RAMS (Reliability Availability Maintainability Safety) simulation team and tools
Planning optimisation reducing construction time
Our large experience allows costs optimisation
Better logistics management
Mutualisation of resources
Optimization of site organisation

13. Public-Private Partnership AT’s experience in railway projects

14. PPP & Concession : General Definition
A PPP & Concession’s Project is a project which includes through a single contract :
the construction of all or part of a railway transport system
the financing of all or part of the construction by the private sector
the operation and/or maintenance of the railway transport system
the revenue, taking into account (part of) the traffic risk and/or performance risk (availability, reliability , …)

15. PPP & Concession: Alstom Definition
A  PPP or Concession’s Project  (BOT, BOO, DBFOM, DBFM…) is a project where Alstom :
has its usual role of contractor / supplier / maintainer +
acts as shareholder of a Special Purpose Company (SPC)
mobilizes private fundings (equity, limited recourse financing) to implement the Project and secure its scope of works

16. Substitute Capex by Opex
PPP typical structure & benefits
PPP contractual scheme :
Main benefits for the customer :
Conceding Authority
Users
Risk transfer
Capital subsidy
PPP contract
Operating subsidies
Budget control
Loan contract
Lenders
Special Purpose Company
Shareholders
Debt service
On-time delivery
Engineering, Procurement and Construction (EPC) contract (turnkey)
O&M contract
Substitute Capex by Opex
Consortium
Construction
Consortium
(Exploitation) & Maintenance

17. Example: Three possible schemes for a High Speed PPP project:
Investment scope
Operational scope
Civil works
Electro-mecanic
Rolling Stock
Construction
Operation
Maintenance
Benefits
Drawbacks
Examples
1/ Global project setting up X
No interface to deal with
Private sector totally responsible
Well-adapted to tramway projects
Financial flow too important for high speed projects
TAV Brazil
2/ PPP for infrastructure only -
Facilitating multiple operation
Private sector totally responsible of the line
Possible segmentation into portions
Lead to hold a precise preliminary referential for operation by third operators
Not much adapted to tramway or metro
RFF France
California
Spain
3/ PPP for superstructure only (or for selected portions)
Multiple operation facilitated
Direct control on civil works by the customer
Private sector committment to the system
Possible segmentation into portions or trades
Reducing risk transfer (interfaces)
Not much adapated to tramway or metro
HSL Zuid Nthlds

18. Unique expertise as a railway system integrator:
Why is Alstom involved in a PPP ?
Unique expertise as a railway system integrator:
Life cycle cost: long-term performance maintening from the conception phase to the operational phase
Industrial Alstom share in a PPP, up to:
20% for high speed,
30% for metros,
80% for tramways
Being minority shareholder in the SPC, Alstom fulfils its global committment towards the Customer and the shareholders
Mid-term & long-term balance between customers’ and Alstom’s interests

19. What each one brings What each one gets PPP projects: Private sector
Risk sharing
Turnkey solution
On-time delivery commitment
Better budget control
PPP
project
Private sector
Passengers
Public sector
Design & construction Contract
Financing Contracts
Dividends
Operation & Maintenance Contract
Design & construction
Grounds
Operation & maintenance
Laws context
Subsidies
Financing Banks
Rights
Capital
Service Quality
Farebox Income

20. RISK SHARING MATRIX Alstom views – Subject to negotiation
Land acquisition
Design & Construction
Modification of standards and norms
Operation and maintenance
Exchange rate
Ticket price
Inflation
Change orders
Level of service
Traffic
Interest rate
Technology
New competition modes
Political risks
Conceding
Concessionaire

21. PPP: Major Success Factors
Sustained political support to the project
Adequacy of legal concession frame with international standards
Realistic assessment of the investment cost and/or of the revenues of the passenger traffic at the ‘feasibility’ stage
Past experience of the country for such projects
The conceding authority must have the financial capacity to support the project
Well-balanced risk sharing between the conceding authority and the concessionaire
Strong committed , experienced, international and local partners for construction, operation, and financing
Limited number of partners at Concession and EPC levels

22. Alstom’s References Arlanda Reims Barcelona
Arlanda Airport Link - Sweden year concession; 40 km line/7 EMU trains
Barcelona LRT Ph 1- Spain year concession; 16km/19 Citadis LRV’s
Barcelona LRT Ph 2 - Spain year concession; 14km/18 Citadis LRV’s
Jerusalem LRT Line 1- Israel year concession; 14km/46 Citadis LRV’s
Florence LRT Lines 2&3 – Italy year concession; infrastructure
Milan metro Line 5 – Italy year concession; infrastructure
Milan metro Line 5 extension – Italy year concession; infrastructure
Reims LRT Line 1 – France year concession; 11km/18 Citadis LRV’s
Nottingham Tramway Phase 2 - UK years concession, turnkey/22 Citadis LRVs
Arlanda
Reims
Barcelona

23. Conclusion

24. General Key Messages
The State have to create upstream adequate political and legal frame
A too complex environment does not attract investors
A direct investment from public authority is a must
Allow use of Export Credit from Supplier to leverage additional support
Part of the payment (including revenues) to be considered in strong currency (or to provide Forex guarantees)
The risk matrix should be discuss locally and take into consideration the local environment as well