1. PPPs for East Africa
Competitiveness and Trade
Expansion Program (COMPETE)
Patricio Mansilla
Director Infrastructure
Chemonics International
Nairobi-Kenya,
April, 2009
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2. Agenda
1. Chemonics Relevant and Sucessful Experience in
Transport Multimodal Infrastructure Investment
2. Infrastructure Investment in East Africa Multimodal
Corridors
3. Main Expected Results of the Infrastructure
Investment Plan
2

3. Chemonics Relevant and
Successful Experiences in
Transport Multimodal
Infrastructure Investment
3

4. Our Approach to PPP
• Approach PPP infrastructure development as a Program rather
that ad-hoc transactions.
• Provide specialized Technical Assistance through the entire
project life-cycle
• Do not short-change project preparation costs
• Promote vigorous, open, and transparent competition
• Look for opportunities to leverage public sector funding
• Strengthen the legal/regulatory and institutional frameworks
4

5. USAID Successful PPP Program in
Peru
Chemonics PRA Project
PRA PPP Unit
Demand and
Engineering Contracts Environment
Financial
5

6. Transport PPP
Transactions
Amazon North: 960 Km.
Investments: $220 mil.
O&M: $15 mil./year
Paita Port Awarded in: April 2005
$120 mil.
Awarded:
April 2009
FBT: 480 Km.
Investments: $162 mill.
Amazon Central: 854 Km.
Investments: $115 mil.
South Container O&M: $15 mil./year
Terminal
Port of Callao
$364-$617mil.
Awarded: June 2006

7. m.o.l.s.
6000
Ticlio
Challenging Altitude
5000
Junín
DV of Peru´s Central
Cerro de
Pasco
4000
La Oroya Corridor
3000 Matucana
East
2000
West
Huánuco
Chosica
1000
DV Tingo María
Lima Pucallpa
0
0 km 100 200 300 400 500 600 700 800 km 900
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8. Project Example:
Amazon North Road
• A 25-year Concession Contract Government of Peru´s US$
to improve, rehabilitate, operate annual contributions Millions
and maintain 960 Km. of road
infrastructure between Paita Annual Payment for US$ 29
and Yurimaguas Construction for 10
• Initial investments: years
– Phase I (years 1-2): US$ 95.0
million Annual Payment for US$ 15
– Phase II (years 2-4): US$ Operation and
120.0 million Maintenance for 20
– TOTAL: years
US$ 215 million Bidders request Government
• Average annual O&M: US$ contribution as part of their
15.0 million proposals.

9. Amazon North Transaction Structure
Transport Ministry of Ministry of
Regulator Regulation Transport Finance
and
Supervision 25 year
Concession Annual O&M
Tolls Contract 15 annual Payments ($15
construction mill)
Concessionaire payments
Amazon North ($29 mill.)
Special Purpose
Road Concession
Company (SPC) Trust
Road Improvements, Bond Partial ($60 mill.)
Rehabilitation ($220 Issue Credit
Bridge Loan m), and O&M Guarantee
(Advances) ($15m/year)
International Inter-American
Development
Multilateral Bank Capital Coupon Bank
Markets Payments (i + p)

10. Results: Reduced TransportCosts/Time
BEFORE: Unpaved Road AFTER: Paved road
Yurimaguas - Tarapoto (125 km) Yurimaguas - Tarapoto (125 km)
Transport of cargo Transport of cargo
Time: 12 hours Time: 4 hours (-70%)
Cost: $53/T Cost: $30/T
Cost: T/km.= $0.50 Cost: T/km= $0.25 (-50%)
Transport of passengers Transport of passengers
Time: 6 hours Time: 3 hours (-50%)
Cost: $10/passenger Cost: $5/passenger (-50%)
Average Transport costs for RICE,
YELLOW CORN, and HARDWOOD

11. Amazon
IIRSA North
Deal of the
Year 2006

12. Callao Port

13. PPP Evolution in Peru
Phase PPP Projects
Arequipa-Matarani Road
Matarani Port
Phase 1 (1990-2004)
Lima Airport
Red Vial 5 (Ancón-Huacho-Pativilca) Road
IIRSA North Road
Red Vial 6 (Lima-Ica) Road
IIRSA South (Segments 2-3-4)
Phase 2 (2005-2007) South Container Terminal –Callao Port
North Group Regional Airports
Costa-Sierra Program (Buenos Aires-Canchaque Road)
IIRSA South Road (Segments 1-5)
IIRSA Central Road
Red Vial 1 Road
Phase 3 (2008-2010) Red Vial 4 Road
North South Regional Airports
Ports of Pisco, Paita, Ilo and Salaverry
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Total Investments US$3 billion

14. USAID/ Chemonics Impact in Peru
Results
1. Increase productivity of 42.000 small business generating more
than $300 million in sales and 82,000 new jobs. New
investments $20 million
2. Technical assistance to design and implement PPP
transactions with investments for around $1 billion and $40
million in direct infrastructure investment. Currently the
Peruvian government has a PPP Program for $3 billion
3. GDP(1998) $52 billion to $134 (2009). Exports (1998) $5,6
billion to $28 billion
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15. Mongolia Customs and Logistic Park
Private Min.Finance
MFFA Contributes
Min. Road, Transport
Shareholders Contributes SPC-UBTZ
Equity Land
Dividends Contributes Dividends Dividends
Tariffs Equity
Operation
Company Payment for
Regulatory Operation
Services:
Agency or Logistic Park Contract services
Parking
Regulation by Development Co. Road-Rail
contract Rail-Rail
Tariff Regulation Fee
Payment Consolidation
Warehouse
Regulation Bond Coupon
Issue Payments (i + p)
Construction Specific contract Capital
Users
Company Markets

16. USAID/South Africa PPP Unit
Program (1999-2005)
• Established the PPP Unit within the National Treasury
• Developed the policy/regulatory framework for PPP –
under Regulation 16 of PFMA
• Prepared guidelines and manuals on the regulatory
requirements
– National Treasury PPP Manual
– Companion manual on standardized provisions of
PPP/agreements
• Establish a Project Development Fund to improve
quality of PPP
• Built a portfolio of transactions
• Launched a highly effective stakeholder awareness
campaign to educate the private sector in procurement
requirements 16

17. Key Elements
1. USAID Technical Support: through the transaction life cycle
(precept/alpha-omega)
2. Credibility and Transparency: in the bidding process
3. Competition²: lowest cost reduces opportunities for corruption
4. Risk Analysis: Allocate the risk to the partie better prepared. Example:
annual minimum revenue guarantee.
5. Coherent and Consistent Technical Studies: This is Private Investment
not Public Investment. Technical studies well designed to insure private
sector buying.
6. Shadow Rating: very important to discover if the transaction business
model is attractive for the private sector and financially viable.
7. Partial Credit Guarantee: bring more credibility to the process and make
feasible the financial operation
8. Environmental Studies: promote citizen participation and need to
mitigate environmental problems in conformance of EPA section 216****

18. Infrastructure Investment in East
Africa
Multimodal Corridors
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19. Northern and Central Corridors
NORTHERN
Kampala CORRIDOR
1800 kms
Kigali
Bujumbura
Mombasa
1530 kms
CENTRAL
CORRIDOR
Dar Es Salaam
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20. Northern Road Corridor
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21. Northern Rail Corridor
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22. Comparative Transport Corridors
Callao Port Paita Port Mombasa Port Dar El Salaam
Characteristics
Peru Peru Kenya Tanzania
Dubai Ports Tertir Terminais-Translei
Under (Portugal) and Cosmos Kenya Ports Authority
Container Terminal Construction (Perú) Require invest in a Hutchinson Ports
Operation $700 million in 3 Adjudicated April 1/2009 second container 10 years contract
stages (30 years $120 milion (BOT terminal
BOT contract contract 30 years)
1.1 million TEU
Demand 0.8 million TEU 0.13 million TEU 0.6 million TEU 0.3 million TEU
(at the time of
bidding)
Gantry Cranes 4 40 tons ship to shore
No Gantry Cranes No gantry cranes 2 gantry cranes
(Current situation) gantry cranes
29 million 29 million 39 million 43 million
Population
$134 bill ($44 $134 bill ($44 bill year $33 bill $22 bill
GDP (IMF forecast
year 1994 and 1994 and $60 bill year
2009)
$60 year 2003) 2003)
Trade-Exports $4,1 bill $2,3 bill
$28bill $28bill
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23. Road Management System
Long Run Road
Strategic Plan
Road Data Base HDM-III
Inventory
Multi annual
Road Program
Road HDM4
condition
Level of Project
Road Traffic
Costs
Policies and
standard
INPUTS
OUTPUTS

24. Financial Analysis
Roads Railways Ports
Revenues: Toll Roads, Port Tariffs and Equity: Capital from investors (20%-30%
Railways Tariffs of investment)
Revenues: Commercial Services in Ports Co-Funds: Governments or Donors Funds
and Railways. Real Estate and Land Use in Debt: Between 70% - 80% of total
Roads investment
Costs: Maintenance Costs and Operation
Costs
Taxes: Value Added Tax and Profit Tax
International Capital Market: Sponsors
Depreciation or Amortization of Assets must to have strong technical and financial
credentials. Partial Risk/Credit Guarantees
are highly desirable.

25. Transaction Transaction
Design Implementation
Define Objectives/ Select PPP option Draft bidding documents/contracts
Due Diligence / Technical Project Design Local/International Promotion
Demand Study /Financial Structuring Pre-qualification
Risk Allocation & Mitigation Bidder due-diligence
Shadow Rating/Credit Enhancement Interaction with Bidders “negotiation”
Environmental Studies PPP Contracts/Procurement Process
Tech/Fin/legal Transaction Design Contract Award / Financial Closure
Consultation with key stakeholders: Build consensus, political commitment, and public support

26. Main Expected Results of the
Infrastructure Investment Plan
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27. Expected Impacts
Country/Transport
Sector
Technical and Economic Appraisal of the business
Northern Corridor under PPP
Kenya Support for the Identify the Infrastructure Needs
$1 billon?
current PPP $1 billon? Attract Financing $0.5 billion?
Technical Assistance Appraisal of the business
Central Corridor under PPP
Tanzania for PPP Central Corridor Identify the Infrastructure Needs
$1 billon?
$3.5 billon? Attract Financing $0.1 billion?
PPP or Public Investment in Technical Assistance Customs Efficiency
Uganda
Central and Northern Roads for PPP Central Corridor Financing/Port Tariffs
PPP or Public Investment in Technical Assistance Customs Efficiency
Rwanda
Central and Northern Roads for PPP Central Corridor Financing/Port Tariffs
PPP or Public Investment in Technical Assistance Customs Efficiency
Burundi
Central and Northern Roads for PPP Central Corridor Financing/Port Tariffs
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28. Expected Impacts
1. Adequate understanding of the multimodal transport situation in the corridors
2. Identification of regulatory/institutional problems and lack of infrastructure
3. Promote coordination between authorities and stakeholders
4. Realistic Program to accelerate investment in infrastructure in both corridors
5. Identification and adequate implementation of the PPP opportunities
6. Promote sustainability of the Infrastructure Program
7. Reduce transaction costs for private and public investment in infrastructure
8. Motivate the expansion of the financial markets
GDP Competitiveness Competitiveness Index
Country
(2009 IMF forecast) Index Overall Infrastructure
Kenya 33.044 93 91
Tanzania 22.106 113 118
Uganda 14.863 128 115
Rwanda 4.188 - -
Burundi 1.309 132 129 28

29. Many Thanks!
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