1 MINUTES OF PIARC TECHNICAL COMMITTEE 1.2 FINANCING ...

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OPENING SESSION Mr. Gavilanes warmly welcomed everyone to the first Committee meeting and expressed his thanks to those members in attendance for their commitment to the work of the technical committee. First he apologized on behalf of Mrs. Rallo. Due to the recent elections held in Spain and consequently new Government, she has been nominated as chief of cabinet of the Secretary of Transport so, unfortunately, she is no longer available for the post of chairwoman of the committee. Mr Gavilanes pointed out that, for this meeting, he will be acting Chairman. It is very likely that, at PIARC´s next meeting in Iceland, he will be officially nominated as Chairman of TC 1.2 and replaced as Spanish Speaking Secretary by Mrs. Paloma Alonso. No objections were made. He also thanked PIARC for organizing these first meetings. Mr. Caso Florez, representing PIARC, extended a welcome on behalf of PIARC and also outlined the agenda for the next 3 days. Mr. Gavilanes introduced Mrs. Lévesque and Mrs. Pluvinage-Nierengarten as English and French speaking secretaries of the committee, respectively. TERMS OF REFERNCE FOR TC1.2 Mr. Gavilanes presented the terms of reference, as established by PIARC. A brief discussion ensued about what is in the scope and what is out of scope for this committee. The terms were accepted with no changes. Issue 1.2.1 Funding strategies for a sustainable road system Strategies Outputs Investigate the new developments in funding State of practice including lessons learned. strategies. Catalogue these new developments. Analyse their objectives, implementation processes and challenges (including acceptability by payers), collection costs, evolution of revenues raised (including fuel / energy / carbon taxation measures), proportion of collected revenues going to the road sector, and sustainability. Examine whether these new funding streams are additional or substitutional to prior funding strategies for the road sector. Issue 1.2.2 Private sector financing Strategies Outputs Investigate how key contractual aspects (i.e. Report and case studies, where appropriate, 2
isk allocation and transfer, risk mitigation and management, contract flexibility during concession period, rules of anticipated ending of concession, traffic and revenue risks, financing risk, etc) have changed through time (differentiating pre- and post-global financial crisis) and their impact on project structure in order to reach financial closure and value for money. Establish the costs of private financing, i.e. expected equity rate of return and debt interest rate, by payment mechanism and by geography and how these have changed through time (differentiating between pre- and post-global financial crisis). Benchmark capital costs of similar infrastructure services (e.g. railways, and power and water utilities) and identify reasons for variances between these different sectors and the road sector. TC STRATEGY FOR THE PERIOD adopted by countries at different development stages, illustrating their evolutions and achievements. Report on costs of private financing in comparison with public financing. Review of benchmark results in comparison with different infrastructure services. It was agreed that the members of TC will create 2 subgroups each one devoted to each of the Issues of the Terms of reference. After a presentation and a brief discussion, it was agreed a draft list of outputs for the coming years. Of course it will have to be fine tuned as a result of the work of the subgroups during the coming months. Mr. Gavilanes pointed out that it was very advisable for the members of the committee to peruse the report produced by former committee A.2., especially to avoid duplicating the work of this committee. There are versions available in English, French and Spanish. Future TC Meetings and seminars It was reported that PIARC wanted the committee to held at least 3 international seminars, one in India, one in Romania and one in Latin America. The committee members discussed the location options for those meetings. As a result, it was proposed that meetings will take place twice a year following a spring-fall schedule. So there was proposed, of course depending on what PIARC will suggest in relation to seminars, that meetings will be held as follows: 1. Fall 2012 in Rome. 2. Spring 2013 in Morocco (maybe with a seminar) 3
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1 MINUTES OF PIARC TECHNICAL COMMITTEE 1.2 FINANCING ...

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