Conference Report – PPP in CEE and SEE Summit

Jacob Fleming hosted more than 200 attendees at the Public Private Partnerships for CEE and SEE, taking place on the 23rd – 25th of April 2008 in Hotel InterContinental, Vienna. Governmental and municipal representatives as well as senior experts form private sectors came to meet and discuss the current PPP market in the regions, its challenges, obstacles, key priorities and outline of future steps and projects.

The meeting started off with a pre-conference workshop for the public sector. Very often lack of expertise and practical knowledge in the public sector is understood as one of the main barriers to successful realization of public private partnerships. Therefore at Jacob Fleming we decided to organize a series of practical workshops for the public sector to raise the awareness of PPP.

Three workshops focused on project planning and preparation looked at what is meant by the public sector comparator analysis in practice, risk transfer and risk assessment in PPP projects as well as financial structuring of the PPP scheme.

The plenary session followed during the following two days offered two days with plenty of networking and discussion opportunities.

Day one of the main conference program was started off with an opening discussion on Key Drivers of Successful PPPs with presenters Mr. Gacon from French PPP Taskforce, Mr. Babczynski from Erste Corporate Finance advisory from Czech Republic and Mr. Butcher a representative of law firm CMS Cameron McKenna. The audience had an opportunity to hear how France has stepped on its path towards proficiency in PPP from a formerly rather PPP reluctant country. As was highlighted in the presentation – apart from the necessary legal background, it is especially change of mentality and political will to make PPP happen. Also the UK based case studies on not always thoroughly successful projects such as the London metro, yet they were excellent lessons to be learned from.

The morning then followed by short contributions by governmental representatives all across the CEE region. As the countries with the most dynamic PPP market were highlighted Greece and Hungary, yet the situation looks very promising also in Slovakia, Bulgaria and Latvia. Other countries represented in the panel such as Lithuania, Slovenia or Czech republic are still waiting for the next move towards a more positive outcome.

Just before the networking luncheon the audience could hear an overview of the legal situation in Russia by Ms. Revzina from the Russian branch of the law firm Gide Loyrette Nouel. Also Mr. Veenenbos from the risk consultancy Aon elaborated on the risk issues related to PPPs, part of the presentation was also delivered Mr. Erik Naafs from DIF Investment fund who shard the experience from cooperating with AON.

In the afternoon the day continued with a series of panel discussion focused on the developments in the SEE region introducing the current PPP market situation in countries such as Serbia and Croatia. Mr. Mate Jurisic from the Croatian Ministry of Sea, Tourism, Transport and Development presented on Croatia’s successful though costly construction of the motorway Zagreb - Macejl. Further on Muge Tuna of Turkish Garanti Securities presented the current project pipeline in the country with focus on a number of energy projects. Last but not the least Mr. David Jarrett of the advisory Louis Berger summarized the company’s experience with international concessions from the region of South East Europe. Not for the first time it was highlighted that the governments need to understand that the PPP arrangements are about money and therefore the governments should not forget that the private sector seeks its profit in the PPP scheme in the first place.

The late afternoon brought to the audience a country focused panel on Romania – as this is one of the countries that enjoys high interest from the industry. The session brought a perspective from the Ministry of Finance, on behalf of which Ms. Livia Stan delivered a key message to the conference audience stating that things are moving in Romania. Mr. Peter Snelson from the advisory company Atkins compared the situation in Romania yesterday and today – highlighting some very important project such as the Bucharest – Brasov motorway, DN2D Focsani – Ojdula Road, Bucharest – Pitesti Concession and other, that very often failed in their first phase because of too prescriptive governmental expectations or lack of flexibility. Today Romania has got another chance to attract the investors yet the country cannot afford to fail.

As municipalities play an inevitable role in public-private partnerships, we traditionally invite also representatives of major cities across the region to deliver the more local insight on how PPPs can be done on a smaller scale level. The panel hosted representatives from the City of Budapest, Ljubljana and Riga – city that prides itself on the Northern Corridor project.

The end of the day was successfully wrapped up by a networking dinner buffet that allowed plenty of networking opportunities and the participants could catch up on a lot of topics opened during the first day.

Conference day 2 was cases study driven and focused on selected projects from the region. Sector wise the day focused mainly on transport infrastructure, nevertheless the audience had an opportunity to hear also about energy projects in SEE, highlighting especially Turkey, a whole session was dedicated to Poland and its latest updates on PPP legislation and its newly built PPP taskforce. From the healthcare sector, Mr. Gabriele Pasquini presented on the successful hospital projects in Tuscany which can truly serve as an excellent example for the Eastern European region.

From the transport sector the most remarkable projects to be highlighted were the Austrian PPP Ostregion presented by Gunther Thaler from ASFINAG – the Austrian motorway operator. The presentation described the experience from the tender on the first motorway PPP and outlined the challenges in the upcoming construction phase.

Mr. Marcos Perez Diaz of EGIS Projects looked at the pre-tender phase of the Russian mega projects Western High Speed Diameter which poses the challenge of introducing the first toll road in Russia.

A very successful example from the actual CEE is the Hungarian Road Project M6 – Phase II and the currently prepared Phase III. The case was presented by Mr.Erik Aal – external project manager of M6 II and III projects at the Hungarian Ministry of Economy and Transport and by Mr. Bela Kilyenfalvi from ING Wholesale Banking in Hungary. This interesting project prides itself with the PFI Award deal of the year 2007. The critical success factors behind this project were defined as follows: focus on time frame management, competent and able project director, communication, matrix structure and especially: “Success is possible where goals are clear ,“where at the same time the goal setting should be following a bottom-up approach.

Once again I would like to thank on behalf of the Jacob Fleming Company to all our speakers, business partners and supporting organizations as well as to all the attendees for their kind cooperation and for making this conference such a successful networking and learning opportunity. We look forward to meeting you at our 4th Annual PPP in CEE and SEE Conference in Budapest on October 16th and 17th (with a pre-conference workshop on October 15th). For more details on our traditional autumn PPP conference please visit our websites: www.jacobfleming.com and www.pppincee.com.

See you in Budapest!
Martina Kuklisova
Assistant Manager
Jacob Fleming