M A D A G A SC A R: M A D A G A SC A R: Public Private Partnership (PPP)for Public Private Partnership (PPP)for Toam asina Toam asina C ontainerTerm inal C ontainerTerm inal June 2005 June 2005
Dec 28, 2015
MADAGASCAR:MADAGASCAR:Public Private Partnership (PPP) for Public Private Partnership (PPP) for ToamasinaToamasina Container TerminalContainer Terminal
June 2005June 2005
IFC Advisory ServicesIFC Advisory Services
• Provide for fee advisory services to Provide for fee advisory services to governments for PSP and PPP governments for PSP and PPP transactionstransactions
• Focus on Infrastructure in recent Focus on Infrastructure in recent years… broadly based Africa. SE Asia, years… broadly based Africa. SE Asia, LAC, SECA, LAC, SECA,
• Power, telecom, ports, water, airlines, Power, telecom, ports, water, airlines, rural electrification, airports, private rural electrification, airports, private provision of public healthcareprovision of public healthcare
The way we operate…..The way we operate…..
• Core IFC teams supplemented by Core IFC teams supplemented by teams of consultants including teams of consultants including lawyers, engineers, regulatory lawyers, engineers, regulatory specialists, accountants, economists,specialists, accountants, economists,
• 18-24 months .. Two stages.. Due 18-24 months .. Two stages.. Due diligence and strategic stage.. diligence and strategic stage.. Implementation.Implementation.
• Fees heavily back-end loaded… donor Fees heavily back-end loaded… donor funds to pay balance of the tea,funds to pay balance of the tea,
Port of ToamasinaPort of Toamasina
Principal port of Madagascar
Accounts for 90% of containerised trade
1992 to 2004: traffic has increased from 26,500 TEU to 91,900 TEU
Until Aug. 2005: one of the worst performing ports in Africa (ie. 7 movements per hour compared to a regional avg. of 10-12 movements per hour)
Transaction Calendar Transaction Calendar
Strategic Options Prequalificatio
n
Investors Due Diligence &
Negociation of Bidding
Documents
Bid
May 26, 2005
Closing of
transaction
Mobilisation of IFC Team
Due diligence (legal, technical, social, financial, and accounting)
Expression of Interest
January 2004
Spring 2005
Summer
2005
Diagnostic Phase Implementation Phase
Information Memorandum
Summer 2004
Winter 2004-
05
Port of ToamasinaPort of Toamasina
Hutchinson Port Holdings Ltd.: #1 global container terminal operator (44 million TEU in 2004)
AP Moller Finances S.A. : # 3 global container terminal operator (22 million TEU in 2004)
International Container Terminal Services Inc. : # 7 global container terminal operator (1.9 million TEU in 2004) – Highest Bidder
Consortium of Malta Freeport – CMA CGM – Bolloré : Malta Freeport one of the leading transhipment ports in the Mediterrenean (1.3 millions TEU in 2004)
Transaction StructureTransaction Structure
20 years Concession guided by performance objectives Exclusivity of container terminal operations until level of
400,000 TEU. Concession entry fee: Initial payment of 5 million Euros by
selected operator towards (i) operating budget of Port Authority (SPAT), (ii) purchase of equipment from Port, and (iii) reimburse Government’s transaction development cost
Additional 5 million Euros to be paid by the operatorduring the first 3 years for container cranes
Mandatory rehabilitation and construction works (est. 10 million Euros)
Mandatory capitalisation of project company with minimal equity amount of 5 million Euros
Transaction StructureTransaction Structure
Hybrid concession fee: Fixed fee + Variable Fee (Euros per TEU)
Variable fee was the single financial bidding criteria
Expected returns to Madagascar over the life of the concession: efficiency gains, international best practices, investments.
Estimated financial returns to the Government in excess of US$ 300 million in investments, entry and concession fees.
Donor Support for TransactionDonor Support for Transaction
DevCo – funding from the UK’s Department for International Development (DIFD), the Dutch Ministry of Foreign Affairs and the Swedish International Development Agency (SIDA) for specialized consultants: Technical: Hamburg Port Consulting (Germany) Legal: White & Case (France) Social: FTHM (Madagascar) Audit: Delta Deloitte (Madagascar)
the Private Infrastructure Development Group's (PIDG) Technical Assistance Fund - for insitutional capacity building for Port Authority and within Ministry of Transports of Madagascar