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P3 Financial Viability Using P3-VALUE 2.1

February 22, 2018
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Pepper Santalucia: Good afternoon, everybody. On behalf of the Federal Highway Administration's Center for Innovative Finance Support, I would like to welcome you to today's webinar on Public-Private Partnership Financial Viability Assessment using P3-VALUE 2.1, part of the P3-VALUE webinar series. My name is Pepper Santalucia. I'm with the U.S. DOT's Volpe Center in Cambridge, Massachusetts, and today I will be providing technical assistance and moderating the question-and-answer session of today's webinar. Before we begin, I would like to point out a few key features of the webinar room. On the top left side of your screen you will find the audio call-in information and the link to the P3-VALUE 2.1 tool. Below the audio information is the list of attendees. Below that is a box titled File Share, where you can access a copy of today's presentation. Simply select the file, click Download Files, and follow the prompts on your screen. In the lower left corner of the screen is a chat box where you can submit questions to the presenters throughout the webinar. We will take questions at a few different spots during today's webinar. If you experience any technical difficulties, please use the chat box or send a private message to me. I'm logged in as Jordan Wainer, one of my colleagues today. Our webinar is scheduled to run until 3 p.m. Eastern, and we are recording todays' webinar so that anyone unable to join us will be able to review the material at a later time. So before our presenters get started, I would just like to ask our attendees today to take part in a brief online poll. Okay, we have respondents answering our poll questions. Okay, I'll just give people a few more seconds to answer. All right. Thank you. I will now move to the first part of the webinar. I'll turn things over to Patrick DeCorla-Souza with the Federal Highway Administration.

Patrick DeCorla-Souza: Okay, thanks Pepper, and good afternoon everybody. If you're on the West Coast, good morning to you. My name is Patrick DeCorla-Souza. I am the P3 program manager in FHWA's Office of Innovative Program Delivery in the Center for Innovative Finance Support, and I'm pleased to be presenting this webinar along with Wim Verdouw, who is with IMG Rebel, a consultant of FHWA. So just want to alert you-- and of course if you registered you saw this notice-- that we are going to actually just give only a recap of a prior webinar that was held on March 21, where we discussed in much more detail the theoretical basis of the tool, and what we are going to present today are simply the enhancements to the basic tool, P3-VALUE 2.0, and hopefully if you aren't familiar with the basic concepts, you will get an opportunity to go back and listen to the prior webinar. These are our presenters, myself and Wim Verdouw from IMG Rebel, and I might note that Wim is also the modeler who developed the P3-VALUE 2.1 model. This is an overview of what we are going to do today. We'll start with just a recap just to refresh your memory, for those of you that have listened to the prior webinar. Then we will get into the enhancements that we have made to the P3-VALUE 2.0. So this is now called P3-VALUE 2.1. And then we will demonstrate with an example the application of P3-VALUE 2.1 to a hypothetical project. So first, let me present a little bit of a recap over what we originally presented about two years ago. So just again to refresh your memory, evaluation can be at the project level. This is prior to thinking about what type of delivery method you want to use, and that is normally done using benefit-cost analysis, and the question it answers is: Is this project worth doing? Do the benefits exceed the cost? After you've determined that the benefits exceed the cost then you can go into project delivery evaluation, and what project delivery evaluation helps you do is decide what is the most appropriate method to deliver the project. Should it be conventional delivery or should it be P3 delivery? And there are two types of analysis you might undertake. First is you look at the financial viability, and that's what we are going to talk about today. Another type of analysis would look at whether a P3 option is preferable to conventional delivery, and for that you have to develop what is called a public sector comparator, and compare it to the P3 delivery option, and that again is normally done using a financial analysis, which is called value-for-money analysis, but it can also be done using benefit-cost analysis, and both of these alternatives-- value-for-money and benefit-cost analysis-- are available to you in P3-VALUE 2.1. This graphic shows you in a little more detail how these different types of evaluations relate to one another. So on the left-hand side you have financial viability and value-for-money analyses, and these are what are called cash flow analysis. They are simply looking at money. On the right-hand side, you have what's called economic efficiency evaluation, or benefit-cost evaluation, and here you're not just looking at money expenditures, but you are also looking at benefits to society as a whole. So it is a little broader than value-for-money analysis where you're only looking at monetary costs. Benefit-cost analysis basically brings in the benefit to users and non-users from the project delivery method. So to summarize, the financial evaluation is a cash flow evaluation and important perspective is that it is the procuring agency's perspective that you are looking at. You're ignoring the rest of society, in other words. You're just looking at what the impact of the P3 option or the conventional delivery option might have on the budget of the public agency that wants to procure the project. Economic efficiency evaluation can also be done, or delivery method evaluation, but it considers not just the cost to society but also the benefits, and so you're bringing in that extra type of evaluation, that is the benefits and not just the cost, and the perspective is society as a whole. Now, evaluation can be done at several steps in the process of implementing a project. In early stages and planning stages when you don't have a lot of data, you still might want to do some evaluation, and then as you have more data in the project development phase you might do much more detailed analyses, and then at the procurement level-- for example, where you have already received bids from the private sector, from a P3 consortium-- at that point you might have even more data-- actual data about what the private sector is proposing, in other words-- that you can use in your analysis. So Federal Highway has previously issued a P3 screen which helps evaluate public-private partnership options, compared to conventional delivery, but it is a qualitative assessment. In other words, no numbers. You simply look at the characteristics of a project and see if it is conducive to doing a P3 option-- for example, if there are a lot of risks that the public agency might want to transfer. You look at the legal framework: Does the state law allow you to do this type of procurement? You look at institutional capacity: Is the state well equipped? Does it have the staff, the expertise, the decision-making process to handle the P3 project. And finally, is the market interested? Are there a sufficient number of concessionaires out there that are interested in doing the project so that you can have a competitive tension and therefore get the best bid? Now of course all of this is qualitative. Once you've done the qualitative assessment, you might want to do quantitative analysis; and at early stages you may not have a lot of information, so P3-VALUE 2.1 was developed expressly to help fill that need by creating a tool which has very simplified inputs-- minimal inputs that you would need to develop a quantitative assessment of value or an estimate of what it might cost to do a P3 delivery versus a conventional delivery option. Of course as you have more data later in the project development phase, you should be doing, obviously, much more thorough studies. Listed here are traffic and revenue studies, if this is a toll project; more detailed cost estimates that account for cost in more detail but also risks and potential cost those risks might cause. And then once you've done those more detailed analyses, you can do the financial viability assessment, comparing the cost with future revenues that you might have to pay for the project, and value-for-money to compare different delivery options, or benefit-cost analysis can also do the same thing. Market outreach can be more detailed at this stage. You can be having industry forums to gauge a number of teams of concessionaires out there that might be interested in bidding on the project. So in order to do financial analysis, whether it be at the detail level or at the more high level that P3-VALUE 2.1 uses, you need certain information, and information is of two types: sources of funds-- where are the monies that you're hoping to use for the project coming from-- and uses-- that's where the expenditures occur-- and the sources of funds in a P3 is equity and debt, and so you need to understand what are the financing conditions for these sources of financing. What is the rate of return requested or needed by these sources of financing? What are the interest rates? What are the coverage ratios? Things of that type. So that's the basic information that you need to provide to P3-VALUE in the simplified input sheet. If the public agency has money in its budget available to fund the project, you would provide that also, and if it's a toll project, you would input information on future traffic forecast, toll rate, so that it can calculate revenues. So P3-VALUE takes all of this information and produces what you see at the bottom here, the size of the debt-- so how much debt can be supported by these sources of funding-- how much equity would be required, and based on that, if the total cost, the total capital expenditures cannot be supported by the debt and equity that-- whose conditions can be satisfied-- then the model will calculate how much additional public funding might be needed to support delivery of the project. Now it's possible that revenues might be high enough that they're more than enough to support the entire project, and in that case, a concessionaire would provide what is called a concession fee, and that is also calculated by the model if the revenues are in excess of the capital and operating expenditure needs. Finally, if you come up short-- that is, if the public funding that is required, as estimated by the model, is not available in the public agency's budget-- the model will allow you to look at the impacts of alternative revenue sources-- for example, different toll rates, different financing conditions, maybe increasing what's called credit enhancements, and maybe even changing costs by perhaps reducing the scope of the project. The tool can be used, in other words, to do very early of alternatives to make sure your project is financially viable. So this slide shows you the key information that a public agency needs-- what might be the concession fee, if it's a revenue-positive project; and if it's revenue-negative-- that is, if the revenue is not enough to support the capital and operating expenditures-- then how much of a public contribution is needed. Now, there are some ways that you might be able to make a project that maybe is not affordable initially financially viable, and that is perhaps by increasing the concession term length. So if you have more time, in other words, to pay back the investment, then it might be more financially feasible; or, of course, increasing toll rates. That's what you do with the analytical tool. Financiers, which of course equity providers and debt providers, are looking at certain metrics, and these are shown here. Debt service coverage ratio, which is basically the ratio of the net revenue divided by the debt service. If a project is very risky, the debt service coverage ratio is going to be much higher than if the revenues are not very certain. So a toll concession, for example, which is more risky, needs a higher debt service coverage ratio-- at least the financiers would need a higher debt service coverage ratio-- and availability payment toll concession would need a much lower debt service coverage ratio. Gearing and leverage is a similar way of providing comfort to lenders by requiring higher percentages of equity. They feel more comfortable if equity investors have more skin in the game, and so they might require a certain percentage of equity to be invested in the project. And of course the equity providers are interested in receiving a certain target rate of return, which is called the equity IRR. So all of these are explained in much more detail in our primer, which is available on our website and the P3 Toolkit, and also in an accompanying guidebook on financing of highway P3 projects, which is also available in the P3 Toolkit. So let's see if there are any questions before we go any further. Pepper, do you want to read the questions?

Pepper Santalucia: Yes. We have one question, Patrick. It's from Amir. He asks: Can you please explain more about institutional capacity and market interest in the P3 screen qualitative assessment. He asks if there's any examples.

Patrick DeCorla-Souza: Okay. So institutional capacity really refers to the state DOT's ability to undertake a very complex procurement process. So they need staff with the expertise; they need certain decision-making processes in place; they need procurement-- they need legislation, for example, to ensure that they have the legal ability to undertake a P3 type of procurement process-- a long-term contract, if you will. Market interest relates to the private sector side, whether-- the private sector may not be willing to enter a new market. For example, a state that has never done a P3, they might be concerned that the state may not have the ability to do or make commitments and conduct the process in a timely fashion. They also might be concerned that this is a one-off project and in order to do even a single project in the state they have to do a lot of-- they have to invest a lot of resources in understanding the legal environment in the state. And so unless they see, for example, potential for future projects-- if they're not able to get this initial project, they want to be able to have the ability to get a project in future, and so they would consider any investment they make well worth it if they know there is a pipeline of projects to come on which they would have the ability to bid. So a lot of things govern market interest, and so that's what that means. Now, so one example, I guess, is Georgia, the state DOT there. When it was doing its first P3 and it had a change in political leadership, a new governor came in, and the RFP had gone out, the procurement process had started, and then the new governor came in and said he wanted to change the type of delivery method. He didn't want to do a P3. Of course these concessionaires had already spent a lot of money, and of course that caused angst and a little bit of concern in entering the Georgia market, at least for a few years. So that's an example of how market interest can be deterred by certain events within the state. Okay, so let's go on to the second part, and what I will do is simply introduce you first to the tool and then have Wim Verdouw take over. So P3-VALUE is an analytical tool. It was originally built for educational purposes to help with the training that we conduct. We are now also, as 2.1, making it available for those who want to do quantitative screening with the simplified version. So in order to help you understand the tool better, we've got a user guide. We've got a Quick Start Guide, Frequently Asked Questions, primers and guidebooks, and there is a concept guide that goes into much more detail on the underlying concepts. This is a schematic of the tool. So the red box shows you the inputs. We have the simplified version that we're going to talk about today. There is the more detailed version, or detailed level inputs that you can do with the same analytical tool if you have more detailed information. But today we're only going to talk about the simplified inputs. So those inputs go into financial viability assessment, and we will show you the results from that financial viability assessment today. The next webinar, March 22, we will show you how the information from the inputs and the financial viability assessment is fed into the value-for-money analysis, and then in the webinar two months from now, on April 26, we will talk about the project delivery benefit-cost analysis, which is doing a more comprehensive evaluation of the P3 option relative to conventional delivery. The blue box shows the more detailed type of information on risk. That is optional, and if you have that information you can feed it into all these different analyses. So here's the enhancements we've done in 2.1: the simplified input sheet, which Wim is going to show you in a matter of minutes; the output for value-for-money analysis is not more transparent; we'll show that to you on March 22; and the benefit-cost analysis has been beefed up, and we now have more detailed analysis of the benefits of carpools and transit, and we'll show you that on April 26. So, with that, I will turn it over to Wim, who will show you the simplified input sheet and the output from the financial viability assessment.

Wim Verdouw: Thank you, Patrick, and just give me one second here to open the model, and hopefully it is appearing now on your screen.

Patrick DeCorla-Souza: Yes.

Wim Verdouw: Perfect. So as Patrick as already mentioned, P3-VALUE 2.1 has a few improvements. Patrick mentioned a different input sheet, and you already see some of that right now on your screen, and there's the value-for-money presentation that we will not be discussing today but next month, and then there's the additional to the benefit-cost framework that we will discuss in two months from now. Besides that, 2.1 has some other changes. One of them is that we've revised or refined the calculations regarding tax based on FHWA's recent work on that. There was a white paper that was published and we improved P3-VALUE, taking into consideration some of the recommendations in that paper. There's some under-the-hood improvements with regards to calculations, and then there's a new coat of paint-- in other words, there's some quantity changes to make it all a little bit more accessible and hopefully better. What I would like to show you now is the input, the simplified input sheet, as well as the outputs that go with financial viability assessment. If you open P3-VALUE 2.1, you will get the navigator selection screen, which is the same or very similar to what you had before, and then you can choose between the model navigator and the training navigator. The training navigator brings us to four different training modules that FHWA developed when they developed this tool. Right now we'll just stick to the normal model navigator, and in the model navigator something that changed from before is that we now have, as before, a view type-- so a high-level view and a detail-level view. Under the detail-level view, for example, we can find all the calculation sheets, versus the high-level view focuses on input and output sheets. But besides that, there's now the simplified inputs option and the detailed inputs option, and Patrick already alluded to some of the simplifications that are included in the simplified inputs. And so if we go to the simplified inputs, we can now see that all the inputs have been brought to a single sheet. We're saying "simplified"-- of course this is still relatively complex analysis, so we still need quite a few inputs, but substantially fewer than before, in particular with regards to risk and some of the benefit-cost calculations. What we've also tried to do is show more clearly, or contrast more clearly, the P3 versus the PSC. So for example, if you look here in Column E, F, and G, we see clearly that under left side we have all the PSC numbers, and on the right side we have the P3 options. We've also tried to reorganize these inputs in a way that people can find themselves slightly more easily, and so on the left side we have the definition of delivery model, timing and cost and financing, and that is really most of what the financial viability evaluation focuses on, and then of course also the toll and traffic revenues. On the right side-- sorry. Below we've also included some instructions and acronyms. So if you're asking what GPL stands for, it's the General Purpose Lane, and whereas before that may have not been 100 percent clear. On the far right there's some guidance regarding risks. As Patrick already mentioned, risks are not considered in the simplified inputs, and that's really risk and uncertainty in terms of pure risks, but we still are giving the user the option to value long-term risks that are being transferred to the P3, and that is covered in rows 37 to 42. So here in this selection here we can decide how to value those risks, and again, the guidance here on the right side, and the concept guide provides much more details as to how this is calculated and what the tool does with this; and the tool has an addition that you can simply ignore those risks. So if the user decides that it's better to ignore long-term performance risk, then it can choose to do so. So these are the inputs. Of course we can make any changes, and here in cell E3, just like before, we have a check. Those are any errors that may occur. So if I change a number in the model and I do not optimize the model, then I would expect some errors to occur because the model hasn't been optimized yet. Let's say for a second if I were to enter a different cost number, you see there's an error that occurs here, and if I want the error to go away, then I would optimize the model, and the optimization does a few things; it makes sure that the financing structure is optimal, which in this case means that all the financing requirements are met, and those are the ones that Patrick mentioned earlier-- so a minimum DSCR is met, the minimum leverage is met, and the equity return is met, and we make sure the debt is repaid on time. Rather than optimizing right now, which can take a little bit of time, I'm just changing back the input, and I'm going to navigate to the outputs for the financial feasibility analysis. And here we see two sets of outputs-- one if the product were to be delivered as a conventional project, and the second option on the lower half of the screen is the P3 option, where most of the risks have been transferred to the private sector. Some of the numbers that Patrick mentioned earlier are listed here. Of course you've got the DSCR, the debt service coverage ratio, and as you can see, the row 9 says the minimum required-- the calculated minimum DSCR-- and it checks whether this is equal or exceeds the minimum required DSCR that was inputted in the input sheet. It also provides an overview of the sources of funding and financing. In this case, there's debt, there's a subsidy up front that was provided as the input, and there's the additional subsidy to make the project work, and the same thing is provided here below for the P3, with some additional parameters regarding the returns for the P3, which you can find here in row 36 through 39. And as you see here on the left, the graphs, they indicate how the debt is repaid. So as before, P3-VALUE allows for an annuity-style repayment or a sculpted repayment-- sculpted meaning that the debt repayment follows the availability of cash flows-- and in both the conventional delivery and the P3, in the current scenarios, it is showing sculpted, which can be recognized by the fact that the debt service isn't flat over time. So that's very briefly the simplified inputs. Again, the main difference with the earlier version was we brought it all to a single sheet and were able to eliminate some of the inputs mainly with regards to risk and the benefit-cost assessments, and here you see the updated output sheet, which shows us what the additional subsidy would be required to make the project feasible; or, if a project generates enough revenues, what is the concession fee that developers may be willing to pay. And with that, I would like to hand it back to you, Patrick.

Patrick DeCorla-Souza: All right, thanks Wim. Can we get the PowerPoint back on? All right. So, let's see. So there are no more questions, so let me proceed, and illustrate a specific hypothetical project and how we use the tool for that project. So this is a state that has done an analysis already, and so we have input the data into the P3-VALUE 2.1 spreadsheet model. It's a 20-mile highway and they're adding two managed lanes in each direction, and the original highway was three lanes in each direction, so now we have five lanes total in each direction, two of which are a managed lane. So we've got different costs for the public sector comparator-- that's the public delivery option-- and then we've got information on timing, and you see all of that there, and one thing we are told is there's a delay in the start of the conventional delivery of five years. Now that will be important not today, but for the value-for-money analysis next month. So here is just a blowup of what you already saw Wim presenting to you in the spreadsheet. So you give it basic information. It's a toll concession, so you check that off, and then you put in information on timing. Now what you can see here is that the construction time is a little different. So it's four years in the public sector comparator and three years in the P3 option, and so we have more years of operation within the 46-year concession period than under the PSC. If it's delayed, of course-- it's delayed by five years-- means that would be that would be 2023 instead of 2018. So the capital costs are input. There are also procurement costs that are required, and those are input. That last column there shows you the percentage of those costs in the P3 column that are borne by the concessionaire. So you see the public procurement cost, the first line in the capital cost column-- the first row. Zero percent in that last column is borne by the concessionaire, because that's the public cost of hiring advisors and developing the agreement and things like that. So then you have operational cost inputs that are also input, and again you see in the P3 situation 100 percent of those costs are borne by the concessionaire. However, there are some efficiencies under P3 which are assumed, at least in this-- it's a user input, and the user would have to estimate the P3 cost difference externally. Now we are just-- want to alert you-- we are developing something called a P3 Effects Model that will help a user calculate how much of efficiency they could get using a P3 delivery method relative to a design-bid-build method. So we then go to the financing parameters-- public funding contribution, if the public sector has some money in its budget available, toll rates, and different financing conditions. And so here's what you see. There's 100 million dollars available in the agency's budget. You have information on the equity rate of return, the gearing, which is the same as the debt-to-equity ratio, so this means 75 percent of the financing will be debt and 25 percent would be equity. Information on the debt maturity, the period of repayment of the debt, interest rate, debt service coverage ratio, and then interest rates on reserve. So the reserves that are held back for debt service or for operations and maintenance are put in a bank, presumably, and that's the interest rate that they would get form the short-term investment. And then debt issuance fees. If it's an availability payment concession, this simply shows you that the main difference is the equity rate of return might be lower-- so it's 10 percent instead of 12 percent-- and the gearing-- that is, the debt-to-equity ratio-- is higher, so it's 85 percent debt. And then debt service coverage is lower because, again, the revenue stream is more certain than under a toll concession. So this shows you some of the inputs to calculate revenue. So you input traffic forecast, and these are the forecasts for the base case, that's the No Build and the managed lanes and the general purpose lanes under the Build case. And then you put in certain information that takes that data, the daily traffic volumes on a weekday, and breaks it down by weekday versus weekend, and then the weekday traffic is broken down by peak period versus off-peak, and this is important because in several cases, especially managed lanes, you have different toll rates in the peak period versus the off-peak. And then different types of vehicles also pay a different rate. So the traffic volumes in these various time periods need to be broken down by type of vehicle so that the toll rates and the toll revenue can be calculated. So this is all the information you see at the top. You see the traffic inputs that you provide, and these are daily volumes, and then you have toll rates by different times of day versus weekends, and then these are the shares of traffic in each of the categories, just like I showed you, broken down by peak versus off-peak and passenger cars versus trucks, and then you have something called a ramp-up factor, which is something that you tell the model that when you first open up the managed lanes, you won't get all the traffic you were expecting because there is a certain ramp-up period. You tell it how long that ramp-up period will be, and all of this is factored into the model to get you your revenue forecast. Now, tax information is important, especially for the value-for-money analysis, which we will talk about next time, but this is a financial input. Of course all of these are in base year dollars to begin with, so we need indexation factors to translate all of these costs and revenues into nominal values in the year in which they occur. So all of these factors are provided as inputs in the model to do those calculations. So I'm going to show you the outputs in the financial assessment results sheet for conventional delivery, and then I will show you the toll concession and availability payment concession for the P3 delivery options. So here we provided DSCR of 1.3, and it has calculated-- the model spits out the 1.3 factor. In other words, it's been able to utilize the entire amount of debt that is available to it with that DSCR of 1.3, and what that translates is to a present value of 363 million dollars. That's the amount of debt that can be supported based on the revenue stream that we calculated. We also had a subsidy available of 100 million dollars, but since the subsidy is not necessarily paid in the first year-- you pay it as construction proceeds-- so the 103 million subsidy may, for example, be paid throughout the construction period. So in the meantime, it's collecting interest, and so that's why the 103 is nominal dollars. That's why it's higher than the 100 million that you input. And finally what we find is that the amount of debt that we can support with the revenue stream isn't sufficient, even after we added the 103 million dollars in subsidies, and the agency would need to provide an additional amount of 38 million dollars in order to make the project financially feasible. So let's go to the toll concession. Here you see that we actually said the DSCR required by the lenders was 1.3. However, the model has spit out 1.63, which is more than the lenders need-- so it's a bigger cushion for the lenders, but why does that happen? It happens because of the other condition the lender put on, which is that the debt-to-equity ratio gearing should be 75 percent. And so we find that if you're going to satisfy that condition, we can't also have a DSCR of 1.3, and so we end up with a smaller debt amount of 260 million dollars. The subsidy is the same but it shows up in nominal dollars. The concessionaire builds the project faster, so that's why it's only 102 million dollars. And we see the equity contribution, that fourth row there under Sources of Funding, is 87 million, and you will notice that it's 25 percent of the total cost of 260 plus 87 million in investment cost. So fortunately here the subsidy required, the additional subsidy required, is only 1 million, so the public agency is better off in terms of its budget than under the conventional delivery option. Now below that in Financial Outputs, it just shows you that it satisfied all the conditions you asked for. So in other words, the equity is getting their 12 percent required targeted internal rate of return, equity rate of return. Then you see the additional subsidy required is 1 million. And so other factors about these are simply based on inputs to the model, whether you need to capitalize interest during operations; if it's a toll concession, you don't have a lot of revenue coming in during the ramp-up period, so yes, you need to capitalize interest. So all of these outputs are simply related to what the model had to do. If you have an availability payment concession, you see that we're getting pretty close to the debt service coverage ratio that the lenders were asking for, so it's the model is able to get a more efficient solution, so to speak, and so they have 1.22 debt service coverage ratio satisfied. Now if you look at the sources of funding, you will see the 304 million debt versus the equity contribution-- that would be the 85 percent to 15 percent requirement of the debt providers. The subsidy is 102 million. That was what we said was available. And then you look at the financial outputs and you see that you have satisfied the equity IRR requirement. As you recall, for the availability payment, we only required 10 percent equity IRR because it's less risky. And then you go further down and you see availability payment-- that's the annual payment that the public agency would have to pay to the concessionaire-- and of course that's in-- the payment in the first year, that would obviously increase based on the rate of indexation in future years, and the model does give you-- if you go into the details, you can see all of the availability payments as they increase in future. No capitalized interest required, and as you can see, the debt-to-equity ratio of 85 percent has been satisfied. So that I think concludes the presentation. All I have here is information on if you want to sign up and register for these future webinars, there's a website that you can go to. You may have already done so. When you signed up for this webinar, you may have already signed up for these two upcoming webinars. There's a dropdown menu in that registration screen that will allow you to register for March 22 and April 26, if you haven't done so already. So preregistration is required, and I encourage you to do so. So with that, here's my information. If you need further information, feel free to call me or email me at this email address. So with that, I turn it over to you, Pepper, and open it up for questions.

Pepper Santalucia: Thank you, Patrick. I did see a gentleman typing in the chat pod, but the question hasn't surfaced. I don't have any additional questions. Okay, so Pablo's question just popped up: In the P3 case, shouldn't there have been an alert for the DSCR for being 1.22, which is less than the 1.3?

Patrick DeCorla-Souza: So the 1.22, if you go back-- let's go back and look at the slide. You see the availability payment-- sorry, conventional delivery-- did we show the inputs? We have to go all the way back to the inputs. Where are the financing inputs? Okay, here. You see the financing inputs for availability payment, we had reduced it to 1.20. The lenders feel more comfortable with the lower DSCR than in the case of a toll concession, and so that's why the model is only trying to satisfy 1.20, but as you recall, at the same time, it has to satisfy this 85 percent debt requirement. So it's trying to get the best solution, and if it's trying to satisfy 85 percent debt, it cannot satisfy the 1.20 at the same time, and this is a more hard requirement because they definitely-- the lenders want the 15 percent equity in there, so they won't want anything less than 15 percent. And so that's why the DSCR is more than what the lender has required, simply because the two have-- of the two in this case, the 85 percent is more important to the lenders. They don't mind, of course, if there's a higher cushion in the debt service coverage ratio, because that's to their advantage. They wouldn't want it less than 1.20. Okay, any other questions? You can open up the lines and see if there are any questions, Pepper.

Pepper Santalucia: Sure, I'll go ahead and do so.

Recorded Voice: All participants are now in interactive talk mode.

Pepper Santalucia: So at this time, the lines are open, so if any of the participants have a question they want to ask our presenters directly, they can do so at this time. Okay, Patrick, I'm thinking that we--

Patrick DeCorla-Souza: Is there--

Pepper Santalucia: I was just going to say, Patrick, that I believe we have some polls-- a short poll question, just an evaluation for those still with us on the webinar. If they could give us an evaluation, that would be very helpful, and we hope that you will join us again for those future webinars on March 22 and April 26. Any final words, Patrick?

Patrick DeCorla-Souza: No, thank you. Thanks to Wim, and thank you, Pepper, for coordinating the webinar, and I look forward to talking to everyone March 22.

Pepper Santalucia: Very good.

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