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PPP in Brazil Case Studies

Marcelo de Lima e Souza PPP Unit – Economic Advisory Ministry of Planning, Budget and Management Mexico, February 24 th 2010. PPP in Brazil Case Studies. PPP Case Studies. Case studies Datacenter Banco do Brasil Pontal Irrigation Project National Public Television Network

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PPP in Brazil Case Studies

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  1. Marcelo de Lima e Souza PPP Unit – Economic Advisory Ministry of Planning, Budget and Management Mexico, February 24th 2010 PPP in BrazilCase Studies

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

  3. 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

  6. 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%

  7. 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

  10. 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

  11. National Public Television Network

  12. 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

  13. 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

  14. The Network in Action

  15. 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

  16. The Project in Numbers

  17. General Remarks

  18. 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

  19. 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

  20. Thank You. Marcelo de Lima e Souza Ministério do Planejamento, Orçamento e Gestão Tel: +55 61 2020-4944 Fax: + 55 61 2020-8084 E-mail: marcelo.l.souza@planejamento.gov.br

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