CPCS
PPP NEWSLETTER
Public-Private Partnerships Newsletter - August 2010
IN THIS ISSUE
PPP Structuring in Southwestern Ontario

Liberia Port Concession

Kenya Port Commercialisation


Sierra Leone Port Reform Update


Staff Feature - Dr. Joseph Jones
REGIONAL MANAGERS
North America
Marc-André Roy
mroy@cpcstrans.com

Asia
Miho Ihara
mihara@cpcstrans.com

West/Central Africa
Arif Mohiuddin
amohiuddin@cpcstrans.com

East Africa
Emmanuel Makoi
emakoi@cpcstrans.com

MENA Region/Eastern Europe
Carolyn Mackenzie
cmackenzie@cpcstrans.com

Australasia
Dr. Joseph Jones
jjones@cpcstrans.com

Caribbean/South America
Sean McDonnell
smcdonnell@cpcstrans.com
UPCOMING PPP EVENTS
USA Rail 2010
September 13-15, 2010
Denver, USA


UITP Light Rail Conference
October 18-20, 2010
Madrid, Spain


International Conference on Public Transport Financing
November 15-19, 2010
Hong Kong, China


Canadian Council for Public-Private Partnerships
November 22-23, 2010
Toronto, Canada
 
DEAR PROFESSIONAL
Welcome to the CPCS public-private partnership (PPP) newsletter. As an international consulting firm with over a decade of experience in PPPs, CPCS is committed to sharing knowledge on the benefits of PPP and sharing best practices with practitioners. In this issue you will find links to reports, articles, and case studies chosen to provide readers with a global perspective on PPPs.

This mid-year issue highlights recent port and multimodal project work by CPCS in Canada, Kenya, Sierra Leone, and Liberia. CPCS has been active in providing support to governments in structuring projects under a PPP framework.

As always, to inquire about our experience in a particular region, customized training solutions, or to submit a paper for a future edition, please contact one of our regional managers using the links provided.

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CPCS Develops PPP Structuring and Financing Options for Multimodal Project in SouthWestern Ontario
Further to an earlier study by CPCS in 2008/09, the Wallaceburg Community Task Force, together with private sector partners, retained CPCS to develop a strategic operating concept, and to assess related infrastructure and equipment needs for the development of a rail-water-road Multimodal Facility in Wallaceburg, Ontario. This facility would handle bulk commodities, including fertilizer in particular. As part of this assignment, CPCS developed project structuring and financing options on the basis of a public-private partnership (PPP).

At a high level, the Project has five basic components: the Multimodal Facility, related storage facilities, the railway connection, a harbour and waterway connection, and truck/road connection. Each component would require the participation of a significant number of parties.

The common thread that would align the interests of each party is traffic potential, put differently, revenue potential from the ultimate rate–payer, the shipper. The interest of shippers in using this facility, and transportation services ancillary thereto will in turn largely be determined by their ability to achieve cost advantages or other strategic benefits from moving product via Wallaceburg, vis-à-vis available alternatives.

An operating concept was developed to capitalize on potential traffic opportunities, while limiting initial investment risk, and accommodating traffic on a modular basis as it becomes committed.

The proposed PPP and financing structure includes the consolidation of infrastructure and operations into a special purpose vehicle that would be operated by a private sector group of companies. There would also a role for the public sector to support the project, vis-à-vis initial capital costs and ownership of fixed infrastructure.

The Multimodal Project was put out for expressions of interest in May 2010. Council is now considering the level of interest and related considerations in developing its decision as to how to proceed.

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CPCS Oversees 25-Year Concession of Port of Monrovia
CPCS is presently advising on transformation of the Liberian port sector from a public sector service port into a landlord port. To this end, CPCS has been providing the Government of Liberia with detailed analysis and recommendations regarding the restructuring of the Liberian port sector. CPCS implemented a public tendering process and completed a comprehensive due diligence, after which the decision was made by the President of Liberia to award a 25-year concession for the development and operation of the Port of Monrovia to APM Terminals (APMT). The Port is currently in substantial disrepair and in need of immediate rehabilitation. As part of the concession agreement, APMT will invest around $120-million (USD) over the life of the 25-year concession.

Press release is available here

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CPCS ADVISING on THE commercialization of Kenya Ports Authority assets
CPCS has been engaged to advise the Government of Kenya (GOK) on the most suitable method of privatization with regard to the transactions of three important port sector assets. This project is in line with the GOK’s Vision 2030 program, which intends to expand infrastructure capacity to enhance the country’s regional and global competitiveness, facilitate investment and promote economic growth. The program encourages substantial investment in key infrastructure facilities, which is to be partly achieved through the mobilization of resources through Public Private Partnerships (PPP). In line with the Government’s roadmap, Kenya Ports Authority’s (KPA) vision is to be rated amongst the top 20 ports in the world, in terms of reputation and performance. As part of KPA’s reforms agenda, three projects were included and approved in the initial commercialization programme. The projects are as follows: (1) Container Berth Nos. 11-14 rehabilitation and expansion; (2) provision of Stevedoring services for loading and unloading cargo; and (3) Eldoret Inland Container Terminal operation.

CPCS has been engaged to provide transaction advisory services to enable the GOK’s Privatization Commission to prepare a detailed commercialization proposal in regards to each of the three transactions. The project is being implemented in two phases: (1) Preparatory, where all due diligence and planning work will be undertaken; and (2) Implementation, where the transactions will be executed. Among other services, CPCS will advise the Commission on how to structure and implement each transaction, taking into account that each operation is part of the KPA’s current function.

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Sierra Leone Ports Reform Restructuring

On Monday, August 8, 2010, Bolloré was announced as the preferred bidder for both the container terminal concession and bulk/break-bulk handling license at the Sierra Leone Port Authority (SLPA). The announcement was made ten months after the international competitive bidding process began in October 2009. The two-envelope process began with interested parties responding to the request for expressions of interest. Upon pre-qualification, the parties were invited to submit full technical and financial proposals. The final handover is expected to be completed by November 1, 2010.


CPCS was engaged by the Government of Sierra Leone in June 2009 as Transaction Advisors to implement the recommendations made earlier by our team during the reform and restructuring study carried out between 2006 and 2008 (Phase 1). Based on the recommendations made at the conclusion of Phase 1, the Government of Sierra Leone agreed that the best way forward would be to convert the SLPA from its status as a “Full Service Port” into a “Landlord” port and concession the container terminal and license the break-bulk operations.

Further information regarding the transaction can be found on the dedicated website:

www.slpatransaction.com

On the restructuring side, CPCS has been working with National Commission for Privatisation NCP to assist the Inter-Ministerial Committee, which has commenced discussions with the labour unions. Moreover, the Sierra Leone Ports and Harbour Authority Bill, drafted by CPCS, has recently been approved by the Sierra Leone cabinet and is on its way to the parliament.

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CPCS Staff Feature

Dr. Joseph Jones

Dr. Joseph Jones is an expert on transport economics and policy. He has consulted extensively in the rail, marine and road sectors in North America, Africa, Asia and Latin America. His areas of practice include: Business Planning, Cost and Operations Analysis, and Investment Appraisal.

Over the past decade, he has focused primarily on restructuring assignments in the rail, port and inland waterway sectors. He has participated, as a Financial/Transaction Advisor in rail restructuring/privatization projects in the Republic of Congo, Ghana, Kenya, Madagascar, Malawi, Mali, Senegal, Tanzania, Uganda, Bangladesh, Pakistan, and Chile. His roles have included: diagnosis of current performance; concession design; preparation of financial models and business plans to help governments assess strategic options and put a value on the entity to be privatized; design of track access regimes; marketing of privatization opportunities to private sector investors; evaluation of investor proposals; and performance of due diligence analyses of the business plans of privatized railways. He was transaction advisor for the concessioning of port terminals in Nigeria, with a value of approximately $2 billion. He has also led major marine projects in Vietnam and Papua New Guinea.

Dr. Jones holds a PhD and an MBA from Queen's University.

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