Infrastructure Investment in Ireland Presentation by Brian Murphy, Chief Executive, NDFA IPFA, UK London, 5th March 2014 Agenda • • • • • • • • NTMA/NDFA Irish Economy PPP Track Record in Ireland Stimulus Package Project Pipeline Delivery Timelines Challenges/Opportunities Future Developments? NTMA/NDFA • National Treasury Management Agency (NTMA) – Ireland’s National Debt Office • National Development Finance Agency – One of 6 Business Units under the NTMA umbrella • NDFA is one of a portfolio of finance/commercial activities • Also New Era¹, NPRF/ISIF², NAMA³, State Claims Agency • • • 1 2 3 NewEra – Shareholder Executive NPRF – Pension/Asset Management, being restructured as ISIF NAMA – ‘Bad’ Bank workout unit NDFA – Set up in 2002 as Financial & Risk Management Advisor to Public Capital Investment – 2007 mandate extended to PPP Procurement (Accommodation Projects) – An integrated, professional approach to PPP Procurement Irish Economy Emerged from Bailout Unemployment dropping Growth Returning Market Access re-established But • Challenges remaining • • • • Track Record in Ireland of successful PPPs • Historic      9 major inter-urban motorways/by-passes 5 education PPPs, including 15 schools International Convention Centre Major criminal courts complex Motorway Services Stations contract • And more recently….  N11 roads contract (April 2013) and Schools Bundle 3 (November 2012) - both under construction  A further roads contract is scheduled to close in Q1 2014 6 Stimulus Package • Announced in July 2012 • In response to • Weak Indigenous Economy/High Unemployment • Continuing Infra Deficits But • Policy Response restricted in many respects • €2.25 Billion including €1.40 billion in PPP Projects Constraints • Balance Sheet/Affordability • Recent PPP History/Reputation • Stakeholder/Market Reluctance (less so now) • IMF (less so now) Response • Listened to Market Concerns - Open engagement with sponsors, equity, debt funders, contractors, FM, professional service providers • Approved Market Activation Measures - Focus on encouraging participants to re-enter Irish PPP market in light of previous project cancellations, sovereign credit rating constraints etc. - NDFA seeking to optimise PPP process (cost and duration) and provide some compensation for bid costs – refer overleaf • Off Balance Sheet - All PPPs so as to be “off balance sheet” in accordance with EuroStat rules - Standard availability based payment mechanism proposed for all schemes Response • Reduce Bid Costs/Bid Timelines - Overall objective to reduce bid costs for private sector partners Development of specimen/exemplar designs for repeat building types (schools, primary care) Target reduced of procurement schedule to between 15 months and 18 months (from OJEU Notice to financial close/contract award) Reduced submissions and no draft tender submissions Certain PPP Contract requirements removed (e.g. Authority Bond, Change In Law) • Reimbursement of Bid Costs (accommodation projects) - Policy decision agreed by Government in December 2012 Reimbursement of part-bid costs for bidders/PT in event of PPP project cancellation Reimbursement of part-bid costs to unsuccessful bidders (with a compliant bid) Pipeline • Education - 3 Projects • Health - 1 Project • Justice - 2 Projects • Roads (NRA) - 3 Projects Education PPPs 1. Schools Bundle 4 • Continuation of successful programme • 4 schools (all post primary) • Capex c. €50m (ex. VAT) • Tender phase (Tenders due Q1 2014) • Financial close target Q4 2014, following debt funding competition 12 Education PPPs 2. Schools Bundle 5 • 6 facilities; 4 post primary, 1 primary & 1 further education • Capex c. €65m (ex. VAT) • Pre-qualification phase • Financial close target Q2 2015, following debt funding competition 13 Education PPPs 3. Grangegorman • Development is part consolidation of Dublin Institute of Technology (DIT) onto a new campus • Capex c. €200m (ex. VAT) • PQQ phase nearing completion • Financial close target Q2 2015, following debt funding competition • EIB funding approved in principle 14 Justice PPPs 1. Courthouses • 7 locations identified (Cork, Drogheda, Letterkenny, Mullingar, Wexford & Waterford) • Capex c. €120m (ex. VAT) • 1 PPP bundle envisaged • OJEU expected H1 2014 • Financial close target Q2 2015, following debt funding competition 15 Justice PPPs 2. Garda (Police) HQs • 3 locations identified (Dublin, Galway & Wexford) • Capex c. €65-75m (ex. VAT) • OJEU expected H1 2014 • Financial close target Q1 2016, following debt funding competition 16 Health PPPs 1. Primary Care • C. 12 sites to be developed nationwide • Does not involve GP or healthcare related services • Capex c. €100m (ex. VAT) • OJEU issued in Dec 2013 • Financial close target Q3 2015, following debt funding competition 17 Roads PPPs 1. N17 N18 Gort to Tuam • 57 km new build road • Capex c. €250m (ex. VAT) • Preferred Tenderer stage • Financial close target Q1, 2014 18 Roads PPPs 2. N25 New Ross Bypass • 14.6km of dual carriageway, 1.2km of single carriageway including an extrados bridge of c. 900m • Capex c. €120m (ex. VAT) • Tender phase (Tenders due Q2 2014) • Financial close target Q1 2015, following debt funding competition 19 Roads PPPs 3. M11 Gorey Enniscorthy • 28 km new build motorway • Capex c. €200m (ex. VAT) • Pre-qualification phase complete. Tender documentation to issue shortly • Financial close target Q2 2015, following debt funding competition 20 Challenges/Opportunities • Funding – transformation in appetite for Irish Assets • Construction Sector – recovering but sector much smaller than 6 years ago • Program provides financing, equity and construction (JV) opportunities Future Developments? • Review of multiannual Government CAPEX being embarked upon to cover the period 2015 – 2019/20 • Government have made it clear PPP will form critical part of future project delivery • In education and health, demographics strongly underpin the need for social infrastructure – areas where PPPs have a good track record