PPP in Brazil
Case Studies
Marcelo de Lima e Souza
PPP Unit – Economic Advisory
Ministry of Planning, Budget and Management
Mexico, February 24th 2010
PPP Case Studies
• Case studies
• Datacenter Banco do Brasil
• Pontal Irrigation Project
• National Public Television Network
• General remarks
Datacenter Banco do Brasil
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
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
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%
Pontal Irrigation Project
The Project
• Located in Petrolina, a pole of irrigated fruit
production and exportation
• Total area 33,526 ha.,
• 7,717 ha. of irrigable land
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
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
National Public Television Network
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
The Content
1)
Canal TV Brasil
i.
TV Brasil HDTV
ii. 1Seg TV Brasil
2)
Canal Multiplex Nacional 1
i.
TV Câmara
ii. TV Senado 1
iii. TV Senado 2
iv. TV Justiça
v. 1Seg Mux1
vi. Secom/TV NBR
3)
Canal Multiplex Nacional 2
i.
TV Escola
ii. TV Professor
iii. Canal Universidade
iv. Canal Saúde
v. TV MinC
vi. 1Seg Mux2
4)
Canal Multiplex Local
i.
Legislativo
ii. Universitário
iii. Comunitário
iv. TV Pública Local
v. Serviços e.gov
vi. 1Seg
The Network in Action
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
The Project in Numbers
Number of Stations
Cities Covered
Population Covered
% brazilian population
Maxium Annual
Government Payments
Maximum Payment per
Person
TV Channels
General Remarks
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
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
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