Rommel C.

Gavieta MA (URP), MSc (Eng)

Advisor Metro Rail Transit Corporation Research Associate, York Center for Asian Research Special Lecturer IV, Far Eastern University (MBA Program)

MRT 3 PROJECT PUTRA and STAR Projects US$675million, 16 km, 13 stations Putra: US$1.5billion, 29km, 24 and 450,000 passengers a day stations and 500,000 passengers a design capacity day design capacity Underestimation of market demand STAR: US$700milion, 27km, 25 for Urban Rail Transit Services stations and 500,00 passengers a d Incomplete integration of Rail and day design capacity Non-rail business models Transparency issues related to international solicitation of proposals Overestimation issues of market demand for Urban Rail Transit Services Integration issues related to urban rail transit alignment and existing commuter corridors Integration issues of Rail and Nonrail business models

MRT3 Project Design capacity was reached even after the Asian Crisis Mismatch between Peso denominated fare and FX denominated loans No linkage between Rail and Nonrail revenues for the Public Sector

Putra and STAR Projects Design capacity was not reached after the Asian Crisis Mismatch between Ringgit denominated fare and FX denominated loans Rail and Non-rail revenues for the Public Sector was an afterthought after completion date.

MRT3 Project Indonesia, Korea, the Philippines, and Thailand have preserved their immediate post-crisis regimes in which exchange rate movements are .at least in principle. unrestricted. PUTRA and STAR Project Malaysia has made an official commitment to a fixed exchange rate, supported by extensive capital controls.

Hernandez, L (IMF) and Montiel, P.J. (Williams College); Post Crisis Foreign Exchange Rate Policy in 5 Asian Countries Filling in the Hollow Middle; High Level Seminar Exchange Rate regime Hard Peg or Free Floating ; IMF Seminar; Marcvh 19 and 20, 2001

MRT3 after 2008 Global Financial Crisis

PUTRA and Star after 1998 Asian Crisis STAR and Putra LRTs bailed out in 2001, nationalized in 2002 Takeovers by government owned Syarrikat Prasarana Negarra Berhad (National Infrastructure Company) (Yong, P.S.;Rail Transit PPPs: Strategies and Pitfalls, Plenary session on Transforming Public Transport World Urban Transport Leaders Summit; LTA Academy, Singapore 5 Nov 2008

Diokno, B. E.; Philippine Fiscal behavior in Recent History; Philippine Review of Economics, XLVII No1 June 2010 p 39 to 87

Khoon, G.S and Mah-Hui, M.l.; The Impact of the Global Financial Crisis: The Case of Malaysia; TWN Global Economy Series; 2010

Singapore and Malaysia are probably the most vulnerable. Trade and Export tend to be concentrated in highly vulnerable segments. Bhaskaran, M.; Challenging Time for South East Asian Economies; Global Asia Vol 4 Number 4;

Business Models for Urban Rail Transit Projects

Hong Kong, German Transit Models and Swedish Water Model Philippine Experience (MRT3 and LRT1 projects)
Hong Kong MTR Model MTR Hong Kong 25% to 27% from Transit Revenue and 75% to 73% from Non-Transit Revenue 25% from Transit Revenue and 75% from National Government Swedish International Development Agency Water PPP Model

Philippines

German Transit Model

Most German cities created a public works consortium combining utilities (gas, water, transit, etc.). Financial planning and transport planning are therefore integrated across the full spectrum of public services. Source: Chislom, Gwen; International Transit Studies Program Report of the Spring 2000 Mission Germanys Track-Sharing Experience: Mixed Use of Rail Corridors; Transit Cooperative Research Program RESEARCH RESULTS DIGEST March 2002Number 47

Minimum Subsidy Bidding (MSB), potential service providers compete with each other and the enterprise that quotes the lowest amount of subsidy requirement becomes eligible for subsidy payments subject to fulfilment of specified level of performance (service provision) obligations.

Her Majestys Treasury provided detailed guidance on refinancing of Private Finance Initiative (PFI otherwise referred to as PPP) Contracts (HM Treasury 2007). Specifically, the October 2008 Amended Refinancing Provisions states that the Public Sector Agency (Authority) is entitled to between 50% to70% of financing gains, depending on the amount and kind of gains generated and subject to the Authoritys approval and value for money analysis. Refinancing transactions may be warranted when there is: Reduction in interest margins Reduction in release of reserve accounts Release of contingent junior capital Extension of the maturity of debt Increase in the amount of debt Refinancing undertaken without the direct involvement of the Private Sector Partner.

Public Sector Maximize domestic debt and minimize international debt Maximize long tenor debt Minimize consumptive debt versus productive debt Adopt the policy of Refinancing Public Private Partnership Projects from HM Treasury Model when nationalizing Public Private Projects

Project Development Private Sector assumes financing risks for Electro-Mechanical Works and Rolling Public sector ciassumes vil works and financed locally. Project Financing: Public Sector assumes Material Adverse Conditions that moves FX and inflation rate risks Project Business Model Public Sector should look at blending Rail and Non-rail Revenues to minimize subsidies Private sector should assume operations and maintenance risks to public service maximize efficiency.

Font, size, and color for text have been formatted for you in the Slide Master Use the color palette shown below See next slide for additional guidelines Hyperlink color: www.microsoft.com
Sample Fill Sample Fill Sample Fill

Sample Fill

Sample Fill

Sample Fill