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  • Graphical Model For Financial Simulation of Highway PPP Projects

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    Risyda Ummami
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    1) The document summarizes the assumptions for a graphical model simulating a public-private partnership highway project, including a construction cost of $170 million over 4 years, 30% subsidies, 30% equity and 40% credit financing, and a 50-year concession period. 2) It outlines traffic and toll rate assumptions, with an initial daily traffic of 20,600 vehicles growing at 5% annually and a toll of $3.7 per vehicle. 3) The model calculates key performance indicators such as a 13.02% project IRR and 23.12% equity IRR over the 50-year period.

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    toll

    Original Title

    Toll road

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    1) The document summarizes the assumptions for a graphical model simulating a public-private partnership highway project, including a construction cost of $170 million over 4 years, 30% subsidies, 30% equity and 40% credit financing, and a 50-year concession period. 2) It outlines traffic and toll rate assumptions, with an initial daily traffic of 20,600 vehicles growing at 5% annually and a toll of $3.7 per vehicle. 3) The model calculates key performance indicators such as a 13.02% project IRR and 23.12% equity IRR over the 50-year period.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    63 views5 pages

    Graphical Model For Financial Simulation of Highway PPP Projects

    Uploaded by

    Risyda Ummami
    1) The document summarizes the assumptions for a graphical model simulating a public-private partnership highway project, including a construction cost of $170 million over 4 years, 30% subsidies, 30% equity and 40% credit financing, and a 50-year concession period. 2) It outlines traffic and toll rate assumptions, with an initial daily traffic of 20,600 vehicles growing at 5% annually and a toll of $3.7 per vehicle. 3) The model calculates key performance indicators such as a 13.02% project IRR and 23.12% equity IRR over the 50-year period.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    of 5

    Graphical Model for Financial Simulation of Highway PPP Projects

    Summary of project assumptions


    Source of funds Construction costs (VAT excluded, indexed on inflation)
    Subsidies 30% Duration of works (years) 4 years
    Equity 30% Year % Amount (MUSD)
    Credit 40%
    Nominal interest rate 6.0% 1 5% 9
    Repayment period 20 years 2 35% 60
    Grace period 4 years 3 50% 85
    Capitalization 4 years 4 10% 17

    Repayment of loan P+I constant 0%

    Total in MUSD 170.00


    Amortization 46 years

    Traffic and Tariff Operation costs (indexed on inflation)


    Initial traffic 20.6 ×1000 vehicles/day Fixed part 1,000 kUSD per year
    Traffic growth 5% per year Variable part 0.1 USD per veh.
    Toll rate (VAT included) 3.7 USD per vehicle
    (VAT excluded) 3.1 USD per vehicle Economic
    (indexed on inflation) Inflation rate 4.0%
    Initial daily revenue 63.7 kUSD / day Corporate tax rate 30%
    (VAT excluded) VAT rate 19.6%
    State discount rate (real terms) 4.0%
    (nominal terms) 8.16%
    150,000
    Project IRR Equity IRR ADSCR LLCR PV (VAT +
    (real/year50) (real/year50) (min) (min) Tax-Subsidies)
    13.02% 23.12% 2.79 4.66 446,027

    100,000 Equity Revenues Interests


    Debt ² Shareholders account Taxes
    Interest during Dividends Operating costs
    construction Principal
    Subsidies
    50,000

    0
    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

    -50,000

    -100,000
    COMMENTS:

    All figures in kUSD


    -150,000

    Concession Construct. Operation Initial Daily Traffic Toll rate Investment Equity Debt Interest Grace Inflation Corporate VAT
    life cost Cost Traffic Growth VAT incl. Subsidies maturity Rate Period rate tax rate rate

    50 170,000 1,000 20.6 5.0% 3.7 30% 30% 20 6.0% 4 4.0% 30.0% 19.6%
    Project IRR Equity IRR ADSCR LLCR PV (VAT +
    (real/year50) (real/year50) (min) (min) Tax-Subsidies)
    9,000 13.02% 23.12% 2.79 4.66 446,027 10.00

    8,000 Principal 9.00


    Interests
    8.00
    7,000
    ADSCR
    LLCR 7.00
    6,000
    Limit
    6.00
    5,000

    5.00
    4,000
    4.00
    3,000
    3.00
    2,000
    All figures in kUSD 2.00

    1,000
    1.00

    0 0.00
    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
    COMMENTS:

    Concession Construct. Operation Initial Daily Traffic Toll rate Investment Equity Debt Interest Grace Inflation Corporate VAT
    life cost Cost Traffic Growth VAT incl. Subsidies maturity Rate Period rate tax rate rate

    50 170,000 1,000 20.6 5.0% 3.7 30% 30% 20 6.0% 4 4.0% 30.0% 19.6%
    Project IRR Equity IRR ADSCR LLCR PV (VAT +
    (real/year50) (real/year50) (min) (min) Tax-Subsidies)
    80,000 13.02% 23.12% 2.79 4.66 446,027 50.00%

    Dividends 0.00%
    60,000
    Equity
    project IRR (real) -50.00%
    40,000 equity IRR (real)

    -100.00%
    20,000

    -150.00%

    0
    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 -200.00%

    -20,000
    -250.00%
    All figures in kUSD

    -40,000 -300.00%
    COMMENTS:

    Concession Construct. Operation Initial Daily Traffic Toll rate Investment Equity Debt Interest Grace Inflation Corporate VAT
    life cost Cost Traffic Growth VAT incl. Subsidies maturity Rate Period rate tax rate rate

    50 170,000 1,000 20.6 5.0% 3.7 30% 30% 20 6.0% 4 4.0% 30.0% 19.6%
    Summary of Assumptions and Results
    SUMMARY OF THE MAIN ASSUMPTIONS

    GENERAL TOLL AND TRAFFIC


    Concession life 50 years Toll, VAT included 3.7 USD per vehicle
    Construction Period 4 years Initial traffic 20,600 vehicles / day
    Construction costs 170,000 kUSD Traffic growth 5.0%
    Amortization 46 years

    FINANCIAL STRUCTURE OPERATING COSTS


    Subsidy 30% of the construction costs Fixed part 1,000 kUSD per year
    Equity 30% of the construction costs Variable part 0.1 USD per vehicle
    Debt
    Maturity 20 years OTHER KEY PARAMETERS
    Interest rate 6.0% Inflation rate 4.0%
    Grace period 4 years Corporate tax 30.0%
    Repayment of loan P+I constant VAT rate 19.6%

    SUMMARY OF THE RESULTS

    FINANCING PLAN
    Uses (in kUSD) 197,297 Sources (in kUSD) 197,297
    Construction costs (nominal terms) 188,696 Investment subsidy 56,609
    Capitalised Interests 8,601 Equity 56,609
    Debt 84,079

    FINANCIAL RATIOS SHAREHOLDERS' RETURN


    Minimum ADSCR (Annual Debt Service Coverage Ratio) 2.79 Project IRR after tax (real terms) 13.02%
    Minimum LLCR (Loan Life Coverage Ratio) 4.66 Project IRR after tax (nominal terms) 17.54%
    Minimum PLCR (Project Life Coverage Ratio) 21.34 Equity IRR (real terms) 23.12%
    Equity IRR (nominal terms) 28.05%
    PUBLIC AUTHORITIES' FINANCIAL FLOWS
    PV on Subsidy (kUSD) -45,984
    PV on the VAT (kUSD) 215,519
    PV on the Coporate Taxes (kUSD) 276,492
    PV on the State revenues (kUSD) 446,027

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