You are on page 1of 8

DdeB DdeB

Government-Industry Government-Industry

Collaboration Collaboration

Creating Creating Commercial Commercial Opportunities Opportunities

Silvano Silvano Casini Casini

Domaine Domaine de de Beauregard Beauregard

2nd 2nd Exploration Exploration Conference Conference

Houston, Houston, Texas Texas

5 5 December December 2006 2006

5 December 2006

1

A A Proven Proven Model: Model:

Italian Italian Motorway Motorway Network Network

DdeB DdeB

• •

• •

• •

• •

• •

The The concept concept of of a a motorway motorway as as a a road road entirely entirely dedicated dedicated to to

fast, fast, mechanised mechanised vehicles vehicles was was first first conceived conceived and and

implemented implemented in in Italy, Italy, in in the the 1920’s. 1920’s.

At At the the end end of of WW WW II, II, public public roads roads in in Italy Italy were were almost almost

completely completely disrupted. disrupted.

In In June June 1946 1946 the the National National Roads Roads Authority Authority was was established, established,

to to rebuild rebuild what what had had been been destroyed, destroyed, and and to to build build new new roads roads

and and motorways. motorways.

Facing Facing the the colossal colossal problem problem of of the the war’s war’s overall overall destruction destruction

and and national national economic economic distress, distress, the the Government Government readily readily

implemented implemented a a Public Public Private Private Partnership, Partnership, to to fully fully exploit exploit the the

nation’s nation’s entrepreneurial entrepreneurial energy. energy.

Since Since early early 50’s, 50’s, the the National National Roads Roads Authority Authority has has mainly mainly

focused focused on on improving improving and and servicing servicing the the network network of of public public

roads, roads, while while encouraging, encouraging, monitoring monitoring and and controlling, controlling,

through through the the instrument instrument of of “concessions,” “concessions,” the the expansion expansion of of

the the motorway motorway national national network. network.

5 December 2006

2

ItalianItalian MotorwayMotorway NetworkNetwork

DdeB DdeB

• •

In In a a few few years, years, a a motorway motorway

network network of of

materialized, materialized, and and stimulated stimulated

3 3 000 000 km km

the the demand demand for for a a wider wider

• •

network. network.

Today, Today, the the Italian Italian

motorway motorway network network includes includes

6500 6500 km km of of roads roads

(for (for a a tiny tiny country country of of less less than than

300 300 000 000 square square km, km, most most of of

them them mountainous). mountainous).

than than 300 300 000 000 square square km, km, most most of of them them

5 December 2006

3

HowHow WasWas ItIt Possible?Possible?

DdeB DdeB

• •

• •

• •

• •

Investors Investors from from the the private private and and public public sector sector (e.g., (e.g.,

municipalities, municipalities, local local chambers chambers of of commerce, commerce, Government- Government-

owned owned companies) companies) joined joined their their forces forces to to reach reach critical critical mass mass

(i.e., (i.e., to to constitute constitute credible credible and and reliable reliable entrepreneurial entrepreneurial

entities) entities)

On On the the basis basis of of detailed detailed technical technical projects projects and and business business

plans, plans, these these companies companies were were granted granted a a renewable renewable

Government Government concession concession for for 30 30 years years

Tolls Tolls were were fixed fixed by by the the Administration Administration on on the the basis basis of of the the

motorway motorway construction construction and and servicing servicing costs costs

Government Government contributions contributions were: were:

1. 1.

2. 2.

3. 3.

a a possible possible yearly yearly contribution contribution of of 4% 4% of of total total envisaged envisaged cost, cost,

for for 30 30 years years

exoneration exoneration of of VAT VAT and and other other taxes taxes for for all all acts acts and and

contracts contracts to to construct construct the the motorway motorway

a a national national fund fund to to stand stand 50% 50% surety surety for for all all bonds bonds issued issued

by by motorway motorway companies companies

5 December 2006

4

KeyKey FactorsFactors

• •

• •

• •

Bureaucracy Bureaucracy limited limited to to the the intervention intervention of of National National

Roads Roads Authority Authority for: for:

1. 1.

2. 2.

3. 3.

Project Project Approval Approval

Monitoring Monitoring and and control control of of legal legal compliance compliance by by motorway motorway

companies companies

Monitoring Monitoring and and control control of of motorway motorway companies companies financial financial

results results and and related related fee fee payments payments to to the the Government Government

Risks Risks allocated allocated to to the the Administration: Administration:

– –

Force Force Majeure Majeure

Risks Risks allocated allocated to to motorway motorway companies: companies:

– –

– –

– –

Construction Construction risks risks (time (time delay delay and and cost cost overrun) overrun)

Liabilities Liabilities

Market Market risk risk (traffic (traffic volume) volume)

5 December 2006

DdeB DdeB

5

TheThe ResultsResults

DdeB DdeB

• •

• •

• •

• •

• •

The The “decentralised “decentralised approach” approach” favoured favoured the the mobilization mobilization of of local local

and and regional regional authorities, authorities, and and entrepreneurial/financial entrepreneurial/financial resources. resources.

This This helped helped speed-up speed-up the the red red tape tape process, process, and and implement implement

simultaneous simultaneous construction construction of of motorways. motorways. (A (A good good dose dose of of local local

pride pride was was injected injected into into the the system.) system.)

The The motorway motorway network network unified unified Italy Italy more more than than any any other other factor factor in in

its its modern modern history. history.

The The impact impact on on the the Italian Italian economy economy has has been been enormous, enormous, in in all all

sectors sectors (e.g., (e.g., agriculture, agriculture, industry, industry, tourism). tourism).

Nearly Nearly half half of of the the network network was was in in concession concession to to a a Government- Government-

owned owned company company (Autostrade (Autostrade SpA). SpA). When When privatized, privatized, five five years years

ago, ago, the the cash-in cash-in for for the the Government Government was was much much higher higher (in (in

constant constant terms) terms) than than the the Government Government amount amount invested invested for for the the

realization realization of of the the entire entire network. network.

Motorways Motorways developed developed their their own own economy economy (e.g., (e.g., gas gas stations; stations;

restaurants restaurants and and shops; shops; breakdown breakdown services; services; maintenance maintenance and and

upgrading, upgrading, including including research research & & development development activities activities for for new new

techniques techniques and and technologies; technologies; optical optical fibers fibers telecommunications; telecommunications;

radio radio broadcasting broadcasting and and related related advertising). advertising).

5 December 2006

6

Lessons Lessons Learned Learned - -

Applicable Applicable to to VSE VSE

DdeB DdeB

• •

• •

• •

• •

• •

• •

• •

Clear-cut Clear-cut legislation legislation (for (for subsidies, subsidies, rights, rights, liabilities-both liabilities-both for for

States/Governments States/Governments and and Private Private Partners). Partners).

One One single single entity entity to to grant grant concessions concessions and and monitor/control monitor/control

project project implementations implementations (for (for VSE: VSE: International International Legal/Technical Legal/Technical

Secretariat? Secretariat? How How do do railroads railroads companies companies coordinate coordinate in in

Europe?). Europe?).

Moderate Moderate (affordable, (affordable, for for VSE) VSE) but but sure sure Government Government

contributions. contributions.

Government Government guarantee guarantee for for up up 50% 50% of of issued issued bonds. bonds.

Fiscal Fiscal alleviations alleviations (fiscal (fiscal incentives, incentives, for for VSE). VSE).

Multiple Multiple and and parallel parallel entrepreneurial entrepreneurial entities, entities, with with a a mix mix in in equity equity

participation participation (public (public and/or and/or private private partners) partners) as as appropriate appropriate to to

circumstances. circumstances.

Clear Clear and and simple simple rules rules for for users. users.

5 December 2006

7

DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8

DdeB DdeB

DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8

Implementing the Vision

DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8

Space Exploration Conference

2006

DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8
DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8

5 December 2006

DdeB DdeB Implementing the Vision Space Exploration Conference 2006 5 December 2006 8

8