PPP in Brazil Case Studies

1
PPP in BrazilCase Studies

• Marcelo de Lima e Souza
• PPP Unit Economic Advisory
• Ministry of Planning, Budget and Management
• Mexico, February 24th 2010

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PPP Case Studies

• Case studies
• Datacenter Banco do Brasil
• Pontal Irrigation Project
• National Public Television Network
• General remarks

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Datacenter Banco do Brasil
4
The Project

• The construction, operation and maintenance of a
  datacer building for Banco do Brasil e Caixa
  Econômica Federal (both government controlled
  banks)
• High standards facilities

5
The Project

• Private partner provides
• Facility infrastructure, and services (security,
  cleaning, reception etc), energy, air
  conditioning
• Private partner is not responsible for the
  provision of computers
• Computers are provided by the public partners

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The Project in Numbers

• Duration 15 years
• IT area 5.000 square m
• Demand risk 0 (guaranteed by the public partners
• Additional revenues Yes. 10 sharing with the
  public partners
• Winning Bid R 880.000.000
• Price reduction through competition about 15

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Pontal Irrigation Project
8
The Project

• Located in Petrolina, a pole of irrigated fruit
  production and exportation
• Total area 33,526 ha.,
• 7,717 ha. of irrigable land

9
The Project

• Private Partner Obligations
• Finish construction, operate and maintain common
  infrastructure (70 has been built by the
  government)
• Allocate land to private agribusiness
• Run crops on the land, with total freedom to
  choose the cultures
• Integrate and provide technical assistance to
  small farmers in at least 25 of the irrigated
  area

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PPP Datasheet

• Contract Duration 25 years
• Regulation National Agency for Waters (ANA)
• Bidding weights Criteria
• Integration of small farmers (65)
• Lowest governmental payments (35), with a
  maximum value of R 202.310.135,00
• Economic Incentives
• Full occupation of the land must occur in no more
  than 06 years
• Most of the payment is due with the occupation of
  the land and not only for potential water
  provision
• Scheduled bidding date 29.03.2010

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National Public Television Network
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The Project

• Creation of the National Digital Public TV
  Network
• Private Partner will be responsible for building
  and operating the network
• Coverage will include all municipalities with
  more than 100.000 people
• Content will be provided by public TV stations
  through EBC (Empresa Brasil de Comunicação), a
  government owned company

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The Content

• Canal TV Brasil
• TV Brasil HDTV
• 1Seg TV Brasil
• Canal Multiplex Nacional 1
• TV Câmara
• TV Senado 1
• TV Senado 2
• TV Justiça
• 1Seg Mux1
• Secom/TV NBR
• Canal Multiplex Nacional 2
• TV Escola
• TV Professor
• Canal Universidade
• Canal Saúde
• TV MinC
• 1Seg Mux2

• Canal Multiplex Local
• Legislativo
• Universitário
• Comunitário
• TV Pública Local
• Serviços e.gov
• 1Seg

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The Network in Action
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The Project

• Private Partner is responsible for construct,
  operate and maintain the network
• Government payments occur only when the service
  is provided
• If the service is not provided or is provided in
  a quality below the fixed minimum standard, no
  payment is made
• Additional revenues may be obtained by the
  private partner
• 10 of these revenues will be shared with the
  public partner to lower government payments

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The Project in Numbers
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General Remarks
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Critical Issues to Consider in a PPP

• Contract specifications should be stable over
  time
• Specifications should be objective and easily
  measurable
• Dimension of investments
• Risk allocation
• Relevance of operation and maintenance
  expenditures
• Information about PPP

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Competition is Crucial

• Private sector behavior may change dramatically
  before and during a bidding procedure
• Competition reduces government expenditures and
  increases the quality of the proposals
• Open auction induces competition

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Thank You.
Marcelo de Lima e Souza Ministério do
Planejamento, Orçamento e Gestão Tel 55 61
2020-4944 Fax [phone] E-mail
marcelo.l.souza_at_planejamento.gov.br