1. PPP in Brazil Procedures & Methodology Marcelo de Lima e Souza PPP Unit – Economic Advisory Ministry of Planning, Budget and Management Mexico, February 23 rd 2010

2. Brazilian PPP Institutional Framework PPP Project Selection and Development Methodology & Capacity Building Summary

3. PPP Institutional Framework

4. PPP in Brazil: a narrow definition In many countries Almost any kind of long-term relationship between public and private sectors Joint ventures, leases, franchises, concessions, PFI (UK), privatization... In Brazil PPP are special kinds of concessions Common Concession – a concession of a public service in which revenues come exclusively from user tariffs PPP and Common Concessions have similar economic structures

5. PPP in Brazil: a narrow definition Concessão patrocinada (Sponsored Concession) Common concession of public services Origin of revenue: tariff + public payments Concessão administrativa (Administrative Concession) Direct or indirect services to the Public Administration Public services Economic activities not listed as public services Origin of revenue: public payments

6. Revenue Generation and Type of Contract PPP Law 11.079/04 Concessions 8.987/95 9.074/95 PPP 11.079/04 and Public Tendering Law 8.666/93 Sustainable projects Traditional projects of public investments and public procurement Partially sustainable projects by means of public resources Independent Revenue Generation Capacity

7. Legal Requirements Law 11.079/2004: Contract duration from 5 to 35 years Contract Value: at least R$ 20mi (US$ 11mi) Contract Object can’t exclusively be restricted to: Hiring personnel Providing and/or installing equipments Providing Civil works

8. PPP Project Selection and Development

9. Key Players CGP - PPP Council Members: Ministry of Planning (coordinator) Ministry of Finance Presidency Chief of Staff Responsibilities: Establishes contracting procedures Defines PPP priority projects Authorizes tendering processes

10. Key Players PPP Unit / Economic Advisory M. Planning Technical support to the CGP Administrative support to the CGP Advisory to third parties TCU – National Audit Office Oversees the proceedings on various levels STN – National Treasury Fiscal controls

11. PPP Projects Portfolio PHASE 1 Identification of PPP projects from the Multi-Year Plan PHASE 1 Identification of PPP projects from the Multi-Year Plan PHASE 3 Structuring of PPP projects PHASE 3 Structuring of PPP projects PHASE 2 Preliminary analysis and prioritization of PPP projects PHASE 2 Preliminary analysis and prioritization of PPP projects Multi-Year Plan …………… PPP Projects 1 2 3 4 - PPP Structuring Team Development of PPP Projects

12. 3 Development Strategy of the Federal Government Level of project development Interest by the private sector Revenue generation capacity …………… PPP Projects 1 2 3 4 Projects prioritization criteria

13. Legal Studies Technical Studies Economic and financial feasibility Engineering Project and Investment Program Determine and project demand Economic/Fina ncial Model Risk Analysis Legal Model and documents Financing Structure Business Model Environmental Studies Convenience and Opportunity Operational Project and Performance Indicators Studies on Fiscal Impact Required Studies for a PPP

14. Methodology & Capacity Building

15. Project ATN/MT 9587-BR Cooperation Agreement with IADB/MIF Consolidate the PPP Unit and provide support to sector units and to other government levels Institutionalize PPP methodology Structure and develop projects

16. Consolidation and Support (2009 activities) 01 National Training Course II Course on PPP Development 300 participants 01 Regional Seminar I Seminar on PPP 270 Participants 05 Local Training Courses (Aracaju, Fortaleza, Natal, São Luis, Teresina) About 50 participants on each session

17. Methodology Development Development of a Value for Money Methodology Selection of external consultants in a competitive process Comparison of foreign methodology and best practices UK, Ireland, Australia, Netherlands, South Africa and Canada Creation of a quantitave and qualitative method fo Publishing a PPP Project Analysis Manual Creation of an Analysis Model for PPP Projects Development of an illustrative applied model on eight projects on different economy sectors Public officials training program Expected conclusion date: November 2010

18. Project Structuring Technical Cooperation Agreements signed with states and municipalities: Agreements with Bahia, Ceará, Manaus, Maranhão, Piauí,Rio Grande do Norte Development of projects: Highway (Piauí) Logistics Plataform (Bahia) Administrative Center (Rio Grande do Norte)

19. Project Structuring Technical Cooperation Agreements signed with federal organizations: Brazilian Space Agency: geostationary satellite Ad hoc cooperation

20. Thank You. Marcelo de Lima e Souza Ministério do Planejamento, Orçamento e Gestão Tel: +55 61 2020-4944 Fax: + 55 61 2020-8084 E-mail: marcelo.l.souza@planejamento.gov.br