1. CONFIDENTIAL www.mcguirewoodsconsulting.com Christopher D. Lloyd NCPPP Annual Conference November 19, 2009 Changes in the P3 World – Law and Policy

2. 2 Virginia in the Vanguard Virginia PPTA (1995) and PPEA (2002) legislation seen as model statutes Maryland, Arizona, Georgia, Utah, and others have adopted similar versions North Carolina, California, Ohio, and others are taking baby steps toward Virginia model Virginia has done 100+ deals Range from $1.5 million - $5 billion+ Provides fast track to design-build, predictable process

3. 3 Evolution of Virginia’s PPEA Creation of interim agreement concept Increased public input and transparency Development of “best practices criteria” Creation of legislative oversight panel Expansion to technology projects and services

4. 4 Barriers to Public Private Partnerships - 2009 Stimulus promised diminished public sector appetite for creative approaches General distrust of Wall Street/corporate America Lack of public funds Public sector layoffs create staffing/evaluation challenges

5. 5 Support for Public Private Partnerships - 2009 Stimulus “list making” exercise shows need for infrastructure Lack of funding causing public sector to be more open to creative financing/development opportunities Construction price declines/increased competition Appetite for “asset maximization”

6. 6 Recent Transactions (post-Lehman) Several major players have exited the market (RBS, Babcock & Brown) Several major deals faltered (Midway Airport, PA Turnpike) Despite financial crisis, some deals are being done Infrastructure funds are still successfully raising money Era of cheap equity has ended (for now) Market expects major public participation – risk aversion

7. 7 I-595 Florida 10.5 mile, $1.8 billion project Creates new express lanes, BRT Financial close March 2009 ACS Dragados as equity investor with bank consortium $800 million bank debt, $600 million TIFIA, $232 million FDOT, $200 million equity First “availability payment” scheme in US - $63.98 million per year for 30 years, FDOT controls toll revenue and rates Additional information at http://www.i- 595.com/default.aspx http://www.i- 595.com/default.aspx

8. 8 SPSA Waste to Energy Sale of waste-to-energy plant to Wheelabrator/Waste Management Provides for substantial rehabilitation to neglected facility $150 million cash infusion lowers SPSA debt/tipping fees Additional proposals being considered for entire solid waste management program (region of 1.7 million)

9. 9 Recent Transactions – Market Reaction Private sector looking for more legal certainty, traffic track record, public financial participation Public sector looking for stronger parent guarantees, additional sweat equity, assistance in building public support for project Increased interest in “social” infrastructure projects Strong interest in energy-related infrastructure

10. 10 Future Opportunities and Issues How will SAFETEA-LU reauthorization impact the development of new infrastructure? Will the availability of new bond vehicles dampen desire for non-traditional financing? How much flexibility will states/feds have to raise taxes to develop/maintain crumbling infrastructure? Will governments be able to deliver on funding and matching commitments in a challenging fiscal environment? Will new environmental/safety/labor requirements restrict infrastructure development?

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