U-Tapao International Airport
Public-Private Partnership
Market Sounding
Royal Thai Navy
15 June 2018
"เอกสารนําเสนอทั้งหมด จัดทําขึ้นเพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมดยังอยูใ่ นระหว่างการศึกษา อาจมีการเปลี่ยนแปลง ห้ามนําไปอ้างอิง
This presentation was prepared for market sounding purpose only. All contents are under preliminary study process and subject to change. It shall not be used
for any other purposes."
Contents
Topics
Project Background
PPP – Commercial Overview
Project Risk Allocation
Project Agency Status
Project Timeline
"เอกสารนําเสนอทั้งหมด จัดทําขึ้นเพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมดยังอยูใ่ นระหว่างการศึกษา อาจมีการเปลี่ยนแปลง ห้ามนําไปอ้างอิง
This presentation was prepared for market sounding purpose only. All contents are under preliminary study process and subject to change. It shall not be used
2
for any other purposes."
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
1.
Project Background
"เอกสารนําเสนอทั้งหมด จัดทําขึ้นเพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมดยังอยูใ่ นระหว่างการศึกษา อาจมีการเปลี่ยนแปลง ห้ามนําไปอ้างอิง
This presentation was prepared for market sounding purpose only. All contents are under preliminary study process and subject to change. It shall not be used
for any other purposes."
Overview of EEC Projects
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
U-Tapao International Airport is one
of five priority infrastructure projects
under the EEC scheme:
1. U-Tapao Airport
Development
2. High-Speed Rail Linking
3 Airports
3. Laem Chabang Port
Development, Phase 3
4. Map Ta Phut Industrial
Port Development, Phase 3
5. Double-Track Railway
Linking 3 Ports
U-Tapao International Airport expansion required to serve projected
traffic and enhance competitiveness/connectivity of the EEC
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
4
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Overview of the U-Tapao International Airport – Current State
Historical timeline of U-Tapao Airport
Year 1965
Council of Ministers approved
construction of U-Tapao Airport by
RTN and the Government of USA.
Aug 1966
Construction completed
Year 1979
U-Tapao Airport commenced
operations as an international
airport.
Feb 1989
RTN and Ministry of Transportation
and Communications joint
operations of the Airport
June 2015
Constructed new terminals,
facilities, aprons with current
capacity of
3.7 MPPA.
Jointly managed by RTN and Dept
of Aviation as a joint-use
military/civilian airport.
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
5
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Overcapacity at Suvarnabhumi (BKK) and DMK
— Operating above capacity since 2010.
— Currently overcapacity of 60 MPPA in
excess of capacity of 45 MPPA.
— Expansion plans to increase the airport
capacity to a target of 90 MPPA.
— Operating in excess of capacity
since 2015.
— Operating at an overcapacity of 37 MPPA
vs. capacity of 30 MPPA.
— International passenger traffic growing at
35% a year due to displaced traffic
from BKK.
— Capacity expansion limited due to site
constraints.
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
6
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
U-Tapao International Airport PPP Project will incorporate
the development and operation of the following assets
U-Tapao International Airport – PPP Project Scope
across over the 6,500 rai of development area:
PPP Project Scope
1
Passenger Terminal
3
Cargo Village/ Free Zone
2
Commercial Gateway
4
Airside Operating Assets
— Cargo Terminals
— Hotel
— Office
— Retail
— MICE
5
— Car Parking
Airside Facilities
— Apron
— Air traffic control tower
— Other airside ancillary facilities
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
7
2.
PPP – Commercial Overview
"เอกสารนําเสนอทั้งหมด จัดทําขึ้นเพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมดยังอยูใ่ นระหว่างการศึกษา อาจมีการเปลี่ยนแปลง ห้ามนําไปอ้างอิง
This presentation was prepared for market sounding purpose only. All contents are under preliminary study process and subject to change. It shall not be used
for any other purposes."
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Introduction to PPP Concept
PPPs are characterised by:
Definition
PPP is defined as a long-term contractual
arrangement between the Public Sector and the
Private Sector whereby the Private Sector provides
a service through the financing, development and
long-term operations of a public infrastructure
Development of a public infrastructure
financed by the private sector
Provision of public services using the
infrastructure developed by the
private sector
Long term contract with the private
sector responsible for maintaining and
operating the infrastructure
Key project risks are allocated to the
private sector
Performance standards set out in the
governing PPP Contract
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
9
PPP – EEC Context
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
EEC Fast Track
EEC Act B.E. 2561
• Enacted on 15 May 2018
• Governs projects in the EEC
• Provides certain privileges
to businesses operating
within Special Economic
Promotion Zone
• Provisions to facilitate and
promote investments within
the Special Economic
Promotion Zone
• Applicable to projects
selected as highly important
as determined by the EEC
Policy Committee
• Expedite overall project
approval processes
• Reduces timeline for
projects from preparation
through to partner selection
to 8-10 months
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
10
Why PPP?
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Benefits
—
Leverage private sector investment to provide upfront financing for the Airport and associated developments
—
Access private sector’s expertise and innovation to develop a world class aero city
—
Value for money proposition by private sector party assuming key project risks
—
Economic activities over the development phase and over the operating phase of the Project by:
-
Creating employment opportunities
-
Enhancing connectivity and travel efficiencies
-
Increase in-bound tourism domestic/international to the region
-
Encourage new industries and investment sectors
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
11
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
U-Tapao PPP Project – Governing Principles
Principles
—
Risks are to be allocated on a fair and balanced basis between the private sector and the Government.
Identified project risks to be allocated to the party best able to manage or mitigate that particular risk.
—
Adopted payment mechanism should ensure that the private sector is able to achieve an acceptable rate of
return on its investment given the level of risk assumed in undertaking the Project.
—
PPP Contract should provide the right level of flexibility to ensure that the private sector can innovate to ensure
the best outcomes in terms of design, construction and operations.
—
PPP model must meet the broader policy objectives for the development of the EEC region.
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
12
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
U-Tapao PPP - Contracting Model
The U-Tapao Airport PPP will be structured as a “Net Cost” PPP Contract
Share upside via revenue share, upfront
concession fee or lease payments
Aeronautical
revenues
Support in the form of:
PPP Co.
Non-aeronautical
revenues
— Capital assets such runway, taxi-way,
remote parking and ancillary
Infrastructure (utilities)
Public Sector
— Design and development of the required Airport Infrastructure
— Financing the development of each of the project components
— Operations and maintenance over the concession term
In return, the private sector party will have the right to generate revenue through operating the airport and the project
components over the concession term
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
13
PPP Contracting Structure
Government will contract with one
single party (PPP Co)
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Govt
(e.g. Treasury)
Public sector
Qualifications: Airport
Developer/Operator, Commercial
/Industrial Precinct Developer
PPP Contract governs relationship
between the public sector and
PPP Co:
— Obligations of the parties and
allocation of responsibilities
— Incorporate technical
requirements regarding capital
and operational matters
(including joint-use
arrangement)
— Define service level
requirements
PPP
Contract
Land lease agreement
Joint Use
Agreemen
t
Equity
RTN
Sponsor
EPC Contract
PPP Co.
Construction
Contractor
Lenders
Financing
agreement
O&M Contract
O&M Contractor
*Under preliminary study process to maximize benefits for commercial and military use.
To be confirmed after feedback from investors are consolidated.
Repair &
Maintenance,
Facilities
Management
— Sets out the basis of revenue
generation
Airport
Operations
Soft services
(catering,
cleaning etc)/
Retail &
Commercial
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
14
3.
Risk Allocation
"เอกสารนําเสนอทั้งหมด จัดทําขึ้นเพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมดยังอยูใ่ นระหว่างการศึกษา อาจมีการเปลี่ยนแปลง ห้ามนําไปอ้างอิง
This presentation was prepared for market sounding purpose only. All contents are under preliminary study process and subject to change. It shall not be used
for any other purposes."
Key Project Risks (1/2)
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Proposed Risk Allocation
Risk
Description
Public
Land and land use
approval
Risk of acquiring title to the project site used and the selection of
site; including risk of necessary planning permission and access
rights (i.e. acquiring the land on time and at cost)
Environmental and
social risks
Risk of damage and hazard during construction to the environment,
site conditions, or local communities.

Construction risk
Risk includes labour disputes, construction project management,
quality assurance standards, defects, subcontractor performance
and disputes, or cost overrun scenarios.

Performance risk
Risk that the project is unable to achieve the output specification
metrics, such as inability to expand, premature obsolescence of
equipment, and inability to meet asset handback requirements.

Demand risk
Risk that the air traffic demand does not materialise and is lower than
forecasted.

Non-aeronautical
revenues
Risk that the PPP Co is unable to achieve non-aeronautical revenues
as expected.


© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
Private
16
Key Project Risks (2/2)
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Proposed Risk Allocation
Risk
Description
Public
Regulatory / change
in law risk – General
Changes in general law affecting the ability of the Project to perform.
Regulatory / change
in law risk – Projectspecific
These would include changes in project-specific laws impacting
airport operations, or project specific tariffs and charges
(aeronautical revenue caps).

Force majeure risk
The risk that unexpected events (eg. floods, earthquakes) occur that
are beyond the control of the parties and results in delays or prohibit
performance of PPP Co.


© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
Private

17
4.
Project Agency Status
"เอกสารนําเสนอทั้งหมด จัดทําขึ้นเพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมดยังอยูใ่ นระหว่างการศึกษา อาจมีการเปลี่ยนแปลง ห้ามนําไปอ้างอิง
This presentation was prepared for market sounding purpose only. All contents are under preliminary study process and subject to change. It shall not be used
for any other purposes."
Project agency status
Legally
entitled to
enter into
contracts,
granting rights
and benefits,
and
concession
Clear and
effective
allocation of
authority and
responsibility
Readiness
Assessment
Capability to
implement &
monitor PPP
contract,
discharge
duties &
responsibilities
Proposed EEC
policy is clear
– Endorsed by
government
stakeholders
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
19
5.
Project Timeline
"เอกสารนําเสนอทั้งหมด จัดทําขึ้นเพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมดยังอยูใ่ นระหว่างการศึกษา อาจมีการเปลี่ยนแปลง ห้ามนําไปอ้างอิง
This presentation was prepared for market sounding purpose only. All contents are under preliminary study process and subject to change. It shall not be used
for any other purposes."
Key Project Dates
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Dates
Milestones
15 June 2018
1st Market Sounding
22 June 2018
Submission of Questionnaire
September 2018
2nd Market Sounding
4th Quarter 2018
Launch of TOR
+ 3 months
Submission of Proposal
1st Quarter 2019
Appointment and Contract
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
Document Classification: KPMG Confidential
21
"เอกสารนําเสนอทั้งหมด จัดทําขึน้ เพื่อการรับฟังความคิดเห็นจากภาคเอกชน เนื้อหาทั้งหมด
ยังอยู่ในระหว่ างการศึกษา อาจมีการเปลีย่ นแปลง ห้ ามนําไปอ้ างอิง
This presentation was prepared for market sounding purpose only. All contents are
under preliminary study process and subject to change. It shall not be used for any
other purposes."
Contact us:
David Ng
Principal, KPMG Singapore
Tel: +65 6213 2416
E mail: davidng@kpmg.com.sg
kpmg.com/socialmedia
kpmg.com/app
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.
Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is
received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a
thorough examination of the particular situation.
© 2018 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. This proposal is subject to the
satisfactory completion of our customary evaluation of prospective
clients and engagements, and the negotiation, agreement, and signing of a specific engagement letter or contract. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Document Classification: KPMG Confidential