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Overview and Outlook for PPP Projects in Vilnius

Overview and Outlook for PPP Projects in Vilnius. Mrs. Ruta Vainiene Adviser to the Mayor of the City of Vilnius November 22 nd , 2006 Vilnius. Contents:. Region overview……………………………………...p. 3-5 Reasons for the PPP……….............................p. 6

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Overview and Outlook for PPP Projects in Vilnius

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  1. Overview and Outlook for PPP Projects in Vilnius Mrs. Ruta VainieneAdviser to the Mayor of the City of Vilnius November22nd, 2006 Vilnius

  2. Contents: • Region overview……………………………………...p. 3-5 • Reasons for the PPP……….............................p. 6 • Present and future projects………………..…….p. 7-13 • Conclusions.…….…………………………………....p. 15-16

  3. We are: - According to “Financial Times”: Vilnius and Kaunas Region–European Region of the Future2006/07 Vilnius– Future City of the Baltic Region 2006/07 (European Cities & Regions of the Future, “Financial Times fDi” competition) - Standard &Poors: credit ratingBBB+ / Stable(July 2006) - European Capital of Culture 2009 - Host of European Men’s Basketball Championship 2011 fDi editor Courtney Fingar, Mayor of Vilnius Arturas Zuokas and SauliusLukosius, head of strategic planning for Kaunas municipality at the award ceremony

  4. Reasons for PPP in Vilnius: • Modern way to solve old problems • Estimation of the project’s viability • A viable alternative where privatization is impossible • Out-of-budget liabilities

  5. Long term lease of Vilnius’ heating networks An urgent need to renovate City’s heating system in order to make the heat consumption more efficient - About 163 mln. EUR to be invested to the heat system of Vilnius during 15 years; - More than 195 000 flats administrated in Vilnius region; - More than 2880 heating stations renovated since 1 of February 2002, 76mln. EUR invested. - The city receives10 mln. EUR rent payment; - The lowest heat price in Republic is 0,03EUR/kWh without VAT. Residents of Vilnius city save upto1,7 mln. EURannually

  6. Vilnius Entertainment Park – the newest entertainment center Construction of Siemens Arena allowed Vilnius to host European Men’s Basketball championship in 2011 Investments in to the Park: I Stage - SIEMENS Arena (capacity upto 12000 seats): upto 19,5 mln EUR II Stage - Water entertainment park: up to13 mln. EUR III Stage “Ozas”family entertainment and shopping centre – upto40 mln. EUR Municipality has invested into infrastructure - 2 mln. EUR Planned investments for 2006-2007 period – upto 8,7 mln. EUR

  7. Concession of the health care services in two Vilnius’ clinics Project was initiated in order to reform one of the most complicated social spheres - Concession period – 25 years - Private investment –4 mln. EUR - Tenders started in August and September 2006 - Health care services remain free of charge (at current level)

  8. Renovation and long-term maintenance of Vilnius’ educational institutions 80 % of schools’ and 99 % of kindergartens’ buildings are in poor condition - 15 educational institutions in the pilot project - Expected private investment – over 30 mln. EUR - PPP scheme on public procurement basis for 25 years period

  9. Modern Tram line Solving traffic jams and ecological problems in the city centre; part of the modern European city image up to 100 mln. EUR investments, one line - 12 km length Concession period – 25 years Contribution of the City – 30-50 percent of CAPEX Availability of EU support - questionable

  10. HALĖ market-place Newly renovated old market place with a new modern equipment and an expanded parking-plot Market place leased for 20 year period Opened on 10th May, 2006 Investor: Invests over 6 mln EUR Reconstructed and installed parking-lot Operates the market Pays annual fee to Municipality – 320 thous EUR

  11. PPP in waste treatment:Site for construction waste andSite for medical waste Until 2003 there was no such modern construction waste treatment site, thus causing huge environmental problems for the city Land leased for 14 year period Investor: Invested over 1 mln EUR Operates the site Pays annual fee to Municipality – 5 percent from income (52 thous. EUR in 2005) An urgent need to solve the medical waste treatment in the region and the country Land leased for 25 year period Opening in Summer 2006 Investor: Invested over 3 mln EUR Operates the site Pays fixed annual fee to Municipality 43,5 thous. EUR

  12. Conclusions: • More than the possibility to have funds out of the balances, increase them and fit in to the debt limit • Better management – better services • Real responsibility • Risk transferred • Information asymmetries avoided • Expanding private initiative • Educational role

  13. PPP is: Best or second best solution (?)

  14. Thank you for your attention! Visit us at www.vilnius.eu

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