Road development through Public Private Partnership (PPP)

Rolf JohansenContracting Management Section

Norwegian Public Road Administration, NPRA

SEB - Nordic Infrastructure and Renewable Energy DayOslo, 8. June 2017

8. June 2017

1. Contract portfolio of the NPRA

2. Public Private Partnership PPP. Experience from the ongoing PPP contracts

3. Project review and status, upcoming projects PPP-projects- Rv.3/rv.25 Løten-Elverum, Hedmark County- Rv.555 Sotrasambandet, Hordaland- E10/rv.85 Tjeldsund-Gullesfjordbotn-Langvassbukt,

Nordland and Troms counties

The Norwegian Public Roads Administration, NPRA

8. June 2017

The Client for 50% of construction works in the country.

NPRA: Norway’s biggest Client for civil works

Photo: Geir Brekke

8. June 2017

Four main focus areas

● Mobility

● Road safety

● The environment

● Universal design

National objectives for Norwegian transport policy

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Our governing documentsNational Transport Plan

NPRA Action Programme

Budget

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Our budget breaks down as follows:Operation, maintenance and development is expensive

29.6billion

6.3billion

2017 ANNUAL BUDGET

The total budget comprises approx. NOK 36 billion, 29.6 bn is government funding and 6.3 bn comes from external funds (road tolls and advance allocations)

8. June 2017

Investments: NPRA’s contract portfolio Distribution of roughly 450 contracts

Total value of the contracts30 large contracts ( > 250 mill.)NOK 17 000 mill.

120 medium size contracts ( 20-250 mill.)NOK 4 500 mill.

300 small contracts ( < 20 mill.)NOK 4 000 mill.

Large 17 000 mill.total

Medium 4 000 mill.total

Small4 500 mill.total

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Road development through Public Private Partnership, PPP

● A long-term contract that includes construction and a subsequent operation period of 20-25 years

● Transfer of tasks, responsibilities and risks to the private sector: financing, construction and delivery of services

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Location of ongoing PPP contracts

NIB9

Oslo

Trondheim

2006: Lyngdal –Flekkefjord

2005: Klett - Orkanger

2009: Grimstad – Kristiansand

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27 km, completion 2030

38 km, completion 203438 km, completion 2031

Experience from the ongoing PPP contracts

● The current contract documents have generally workedwell in the ongoing contracts.

● Payment mechanisms have generally worked well.

● Important: Regulations in the Contract for large and unexpected workthat may be necessary in the operation period.

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Approvedzoning plans

Norwegian Public Roads Administration

PPP contract

Project stages included in the PPP contract

Landacquisition

Design and construction

Operation and maintenance

Position of the PPP company in the structure

NPRA

PPP company LendersOwners –

investors-

Operation and maintenance contracts

Turnkey contract

The PPP company’s contract collaborators

PPP contract

Funding

● The PPP company must provide equity and loans for construction of the road.

● Part of the construction costs will be paid when the road is open and available for public traffic.

● Part of the funding will be long-term loans and equity, which will remain in the company to make sure that the company delivers the agreed quality of operation and maintenance until the Government reassumes responsibility for the road.

Mechanism for compensation and payments

● Usually no payment until the road opens for public traffic

● Agreed annual amounts throughout the operation period based on the following payment elements:

1. Monthly or quarterly payments for keeping the road open and available for public travel

2. Monthly or quarterly payments for opearation and maintenance to the agreed standard

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Examples of payment profiles

PPP I

PPP II

PPP III

Payment profile, example

Payment profile, example

Payment profile, example

Examples of payment profiles(2)

PPP IV

PPP V

Payment profile, example

Payment profile, example

Opening to traffic

~ 50 %

Opening to traffic

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Payment to the PPP company

Storting/Parliament

Ministry of Transport and Communications

Norwegian Public Roads Administration

budget allocations

tollToll road operator

paymentservices

PPP company

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Obligations of the toll road operators in the PPP project

• Provide funds for part of the milestone payment.

• Continuously provide funds for the PPP company during the operation period.

(NB: Payments are made to the NPRA, no direct payment is made form the toll operator to the PPP company)

Location, upcoming PPP projects

NIB19

Oslo

Løten - Elverum

Hålogalandsvegen (Tjeldsund-Gullesfjordbotn-Langvassbukt)

Sotrasambandet

NOK 9500 mill. project cost~ 9 km length

NOK 5100 mill. project cost~ 26 km lengthPrequalification is underway

NOK 8500 mill. project (PPP) cost~ 80 km length

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Rv.3/rv.25 Ommangsvollen – Grundset/Basthjørnet

Location Rv.3/rv.25 Ommangsvollen –Grundset/Basthjørnet

NIB21

Oslo

Trondheim

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Location Rv.3/rv.25 Ommangsvollen –Grundset/Basthjørnet

NIB22

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Objectives:● The major freight transport

between Oslo and Trondheim

● The region Hamar/Elverumis a joint residential and labour market.

● Continuous pedestrian and cycle lane between Hamarand Elverum

● Improved: mobility, traffic safety, public safety, residential environment

Project cost NOK 5100 mill (2016 NOK)

Main elementsRv.3/rv.25 Ommangsvollen – Grundset/Basthjørnet

15,2 km 4-lane road

10,4 km 2/3-lane road

9 bridges

18 flyovers/tunnel passages. 2 fauna passages

Junctions, roundabouts 7,1 km pedestrian and cycle lanes

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Estimated scheduleRv.3/rv.25 Ommangsvollen – Grundset/Basthjørnet

2016 2017 2018 2020/21

The Parlamentpassed the

Project 30. March

2017Bidding stage

June -Oct 2016Toll case

Hedmark County Administration

2018Possible

construction start

Possible road opening

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Location Rv. 555 Sotrasambandet

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Bergen Oslo

Kolltveit

Storavatnet

Bergen citycentre

Project cost NOK 9500 mill (2016 NOK)

Location Rv. 555 Sotrasambandet

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Objectives:- Connection between Bergen

and the island municipalities Fjell, Sund and Øygarden (36,500 inhabitants).

- The project objectives include improved mobility, increased traffic safety and regularity.

- AADT at 26,000 on the current two lane road gives high accident rates. (also challenging for the traffic management during construction)

- Improvements for public transport, pedestrians and cyclists.

Illustrations – new and old Sotra BridgeRv.555 Sotrasambandet

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Main elementsRv.555 Sotrasambandet

9 km 4-lane road, which includes:4 bridges (Sotra bridge 875 m plus totally 550 m of

smaller bridges 4 tunnels, tunnels totally 4,6 km (double-tube)4 major junctions

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New mainroad – tunnels, bridges, intersections(not so much regular road building)

KryssStraume

KryssBildøy

KryssValen

KryssDrotningsvik

KryssStoravatnet

KryssKolltveit

Kolltveit

Straume

Storavatnet

Tunnel

Bridge

Intersection

intersections

Rv. 555 Sotrasambandet – estimated schedule

2016 2017/2018 2018

Adoptedzoning plan

Toll caseLocal/regional government

handling

Storting/Parliamentprocessing

Start of high-voltage re-routing

2019

Possible PPP contract

construction start

High-voltage cable re-routing

2019-2024Construction period

Possible road opening summer 2024

2024

Start construction of access roads – tunnels for supply cable re-routing.Separate Bid and Build contracts in the period 2018-2019

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Hålogalandsvegen

E10/Rv. 85 Tjeldsund-Gullesfjordbotn-Langvassbukt

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Location and objectives Hålogalandsvegen

NIB32

Oslo

Narvik

Trondheim

Objectives:

• Reduce travel time for the freight transport –railway Narvik

• Reduced travel time to Evenes airport

• Improved regularity

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The scope of the PPP projectE10/ rv. 85 Tjeldsund-Gullesfjordbotn-Langvassbukt

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Project cost NOK 8500 mill PPP (2017 NOK)

Main elements

Hålogalandsvegen. E10/ rv. 85 Tjeldsund-Gullesfjordbotn-Langvassbukt

80 km of 2-lane road, which includes:

34 km along excisting road alignment

18 km new alignment

28 km of tunnels totally (single-tube)

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Estimated schedule● Governmental land-use plan adopted by the Ministry of Local

Government and Modernisation

E10/ rv. 85 Tjeldsund-Gullesfjordbotn-Langvassbukt

2016 2017 2018 2024-25

Adopted governmental land-use plan

ProcurementPPP contract

Possible completion

2019

Toll roadProcessing

Local government

Stortingprocessing

Possible PPP contract

2020

8. June 2017

Thank you for your attention!

Photo: Knut Opeide

8. June 2017 www.vegvesen.no/vegprosjekter/OPS-PPP rolf_johansen@vegvesen.no