1

WATER AND WASTEWATER PUBLIC-PRIVATE PARTNERSHIPS

Project Making In Developing Countries5th Annual Forum on PPPs

November 30, 2010

INTRODUCTION

2

Market forPublic-PrivatePartnerships

(PPPs)

Top Marketsfor PPP

opportunities

Competing forand

Winning PPPs

Presentation Topics

INTRODUCTION

3

Provide Insight to a Growing Market Discuss Market Opportunities Discuss What It Takes to Be Successful Strategic Considerations for Japanese Companies to Advance in the

PPP Market

Presentation Goals

4

Market forPublic-Private Partnerships

5

STATE OF GLOBAL WATER

The world’s waster supply is constant, the world’s population will increase from 6 billion today to 10 billion by the year 2050

350 million people in 17 countries (Middle East & Africa) full into water scarce conditions

Economic development – greater industrial demand

6

STATE OF GLOBAL WATER

2.3 billion people suffer from diseases linked to dirty water

Annualized investments $300 billion each year alone in Asia needed

Worldwide annual expenditures for water/wastewater O&M is $400 billion

Public funds limited

Inadequate asset management and poorly trained resources

7

“Asia must be creative in finding ways to tap its multi-trillion dollarsavings to mobilize private sector support for new infrastructureneeded in the coming years”

Haruhiko KurodaPresident

ADB

Leading agencies and governments ALL incorporating PPPs as a strategy for the future

8

“Public-private partnerships can bring about increased operationalefficiency and higher quality service”

Arjun Thapan, Special Advisor to the President, ADB

Growing consensus and surging momentum for PPPs in Asia and Middle East

“So much could be gained from tapping private sector participation ininfrastructure development. Public-private partnership schemes cancombine the strengths of government with the strengths of the privatesector – in particular, its ability to move swiftly and deliver high-qualityservices on time”

Margarito Teves, Finance Secretary of the Philippines

MARKETS AND COMPETITORS

9

PPPs continue to gain acceptance around the globe Financial pressures and reduced revenues for government Government alone cannot meet the needs for water/wastewater

infrastructure Highest growth regions for water/wastewater PPPs will be the

Middle East and Asia PPPs are a huge growth market for the private sector

Market Trends

MARKETS AND COMPETITORS

10

Improve theefficiency and

management ofsystems we have

Build the newwater and

wastewatersystems we need

Global Water Solutions

PARTNERSHIPS OR P3s COME IN A VARIETY OF FORMS

11

AssetOwnership

Build-Own-Operate-Transfer Concession

orLease

ContractO&M Design-Build-

Operate

Design-Build

Public-PrivatePartnerships

PRIVATISATION vs. PUBLIC-PRIVATE PARTNERSHIP

12

Term that is loosely used to describe almost any form of private sector involvement

The term privatisation more precisely describes the ownership of assets by the private sector

More Synonymous with all forms of partnerships – excluding asset ownership

Applies to design-build-operate, concession-lease, and build-operate-transfer

PRIVATISATION

PUBLIC-PRIVATEPRIVATISATION

BENEFITS OFPUBLIC-PRIVATE PARTNERSHIP

13

KEY BENEFITS FORTHE GOVERNEMENT

AND RATE PAYERS

Lower costs Allows government focus on policy Access to technology and capital Access to world-class capabilities Experience and knowledge Economies of scale Share risks Performance guarantees Employee training and opportunities Backup and support resources

14

Top Markets forPPP opportunities

15

TOP GEOGRAPHIC AREAS FOR PPPs –MIDDLE EAST AND ASIA

Strong economic growth and development will create substantial opportunity for the private sector

Middle East Asia

16

STATUS OF PUBLIC-PRIVATE PARTNERSHIPS IN THE MIDDLE EAST

UAE

Oman

Qatar

Saudi Arabia

Bahrain

Kuwait

Egypt

Country Using PPPs

Yes No

17

MENA O&M MARKET

IN NUMBERS

$30bn – $50bnMENA O&M market size

$10bnServices outsourced by 2012

Source: MEED

18

COUNTRIES THAT MAKE ‘MENA’

19

MARKET DEMOGRAPHICS –ARABIAN PENINSULAR

ARABIAN PENINSULA POPULATION AND GDP

POP = POPULATIONGDP = GROSS DOMESTIC PRODUCTSOURCE: IMF

20

TOP MARKETS IN ASIA FOR PPP OPPORTUNITIES

Country Status on PPPs

Emerging PPP markets with strong potential as a solution to debt crisis

Japan

India

China

Vietnam

Philippines

Deploying PPP schemes throughout country

PPP schemes in progress

Emerging market promoting PPPs

Continuing demand and use of PPPs

Cambodia Water strategy and use of PPPs

Thailand PPPs re-emerging in form of service contracts

21

Competing for andWinning PPPs

22

Estimated total market size – annually for next 5 years in the Middle East and Asia

$300b - $500b Utility Infrastructure Water Supply and Treatment Desalination Wastewater Collection and Treatment Wastewater Reuse and Recycling Systems O&M

Source: MEED

23

The Competitive Landscape In The Water/Wastewater Market Firms competing in specific market segments Specialty contractors and consultants Technology firms focused on desalination Wastewater recycling emerging as next opportunity Sustainable green solutions becoming a market Few firms offering truly integrated solutions

INTEGRATED SALES AND MARKETING

24

The Water/Wastewater PPP market is very competitive Success requires understanding of clients, competition,

solutions, and client relationship development Winning requires innovation and creativity at each

step in the sales cycle Strategies that win require skill, experience, teamwork

and a long-term commitment

Developing Winning Strategies

8 KEY STEPS TO BUILDING A WINNING AND SUCCESSFUL PPP BUSINESS

25

Japanese firms can be successful in project making

1. Assess Markets

2. Develop a business plan

4. Secure financial resources

3. Acquire strategicresources

8. Focus, compete and win

7. Be creative and innovative

5. Determine marketposition and targets

6. Build relationships

DEVELOP A WINNING FORMULAKEY TIPS TO HELP YOU WIN PPPs

26

Develop a winning and inspiring presentation

Capture the highlights of your proposal in a 5 – 7 page executive summary

Write a customized proposal for your client

Quantify a value proposition – that sets you apart from the competition

Define proposal themes, strategies, and messages

Establish a proposal compliance plan

Crea

ting

a W

inni

ng P

ropo

sal

6

5

4

3

2

1

SUMMARY

27

Japanese Companies can compete and capture their share of the PPP market

The time to act is now before market penetration is taken by others

Focus on increasing competitive knowledge and know how

Develop great proposals, presentations with clear messaging and value propositions

Creation of an industry organization like the Asia Public-Private Partnership Institute will help grow the market and industry

Summary Conclusions

SUMMARY

28

Public-private partnerships is a solution for the future and a huge opportunity

Opportunities Await Us….

SUMMARY

29

THANK YOU.

SUMMARY

30