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P3 VALUE Webinars
Revenue Risk Sharing for Highway Public-Private Partnerships

January 26, 2017
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Jordan Wainer: We first have some questions we'd like to answer to help us better understand our audience. The first is, "what is your affiliation," the second is "how many people are participating with you today" and the last one is, "how familiar are you with P3 concepts." So I will give everyone just a couple of seconds to answer those questions.

Jordan Wainer: Okay, thank you very much. And with that, I will turn the webinar over to Patrick DeCorla-Souza. Patrick?

Patrick DeCorla-Souza: Thanks Jordan. Again, my name is Patrick DeCorla-Souza, I'm the P3 Program Manager here at the Federal Highway Administration's Center for Innovative Finance Support which is part of the Office of Innovative Program Delivery. I also work part time for the Build America Bureau which is part of the Office of the Secretary of the U.S. Department of Transportation. So I'm pleased to serve as moderator for this webinar which will introduce to you a discussion paper that we recently published on revenue risk sharing for public-private partnerships. As some of you may be aware, in the United States, currently we have two types of public-private partnerships or P3s as they are known, first is toll concessions and the second type is availability payment concessions. With toll concessions you shift the entire toll revenue risk to the private sector partner and with availability payments, if it's a toll facility, the revenue risk would be retained by the public agency and the private partner is compensated using availability payments. Now one reason we commissioned this paper is to see if there was some happy medium in between or what are the options between these two extremes and are there any options whereby the toll revenue risk could be shared between the public agency and the private partner. So the paper was authored by Sasha Page, who is going to be our main presenter today, and he will be joined by Wim Verdouw, who is also with them same firm, IMG Rebel, and they are two of the three authors of the paper. So let me first introduce Sasha Page. He is with IMG Rebel and IMG Rebel is a financial advisory firm where he has over two decades of experience in finance, project development and public-private partnerships. Sasha has advised state departments of transportation and agencies throughout the U.S. and has advised on over a dozen major U.S. and international toll road and other transportation infrastructure P3 transactions. Sasha also serves as a visiting professor at George Mason University, which is here in the Washington, D.C. Metropolitan area. Wim Verdouw is also with IMG Rebel, he has a combined background in engineering and economics with over ten years of experience in infrastructure development and project finance. At IMG Rebel he has worked on a number of transportation and P3 projects, advising clients on financial analysis and project structuring. So with that, I'm pleased to turn it over to Sasha. Sasha?

Sasha Page: Thank you very much Patrick and thank you all for joining us on this webinar. What I'd like to do today with my colleague Wim is to give you an overview of the purpose of the paper, discuss our analytical framework and approach and then dive into some of the revenue risk sharing mechanisms that could be appropriate for the U.S. context. And I think as Patrick mentioned, there'll be four times we will stop and ask for any questions you may have and you can pose those. So the purpose of the paper is to evaluate revenue risk sharing mechanisms, internationally and those that we think are relevant in the U.S. as well. Most importantly is to see how those mechanisms can work in the U.S. or work better in the U.S. given the U.S. context. And our framework looks at these in context of value for money, fiscal impacts, what it costs the public agencies, in terms of financing constraints and ease of implementation and we provide some guidance on the selection of these mechanisms as well. So the context...

<break in recording>

Jordan Wainer: Sasha, are you still there?

Patrick DeCorla-Souza: Sasha, we can't hear you.

<long pause>

Ashley: And I do apologize, it looks like Sasha's line has disconnected.

Patrick DeCorla-Souza: While waiting for Sasha, let me see if I can give a little background here. As Sasha was saying, there have been several projects, toll concession projects in the U.S. and what he's displaying here is a number of projects that have run into some kind of trouble due to toll revenues being inadequate mostly.

Sasha Page: My apologies.

Patrick DeCorla-Souza: Sasha's back. Sasha, I was just filling in for you but now you can go on with the next one, I covered this particular slide, go ahead.

Sasha Page: You're on page seven, is that right?

Patrick DeCorla-Souza: Yes.

Sasha Page: Okay, thank you. Apologies. So we found that there are five mechanisms that we think are particularly appropriate for U.S. highways which we'll go through. Present Value of Revenues is one that's been used extensively in Latin American and really originated in Chile; Minimum Revenue Guarantees which are mechanisms that is really used worldwide and probably the best example of revenue risk sharing. The third one is Contingent Finance Support, kind of a subset of the MRG which is being tried now in the U.S., and then fourth is Availability Payment and Revenue Sharing, a unique combination which is also now being applied in an important transaction in Canada, and lastly, Innovative Finance Programs which would include programs in the U.S. like the TIFIA and RRIF program but other similar ones that are being used in Europe. So our analytical framework that we're applying here is that we're looking at various perspectives on risk, because we're talking about sharing risk here. We have developers' perspectives and lenders' perspectives. Lenders, that's banks, bondholders receive generally only interest when they invest or they provide debt to a project, they tend to be more conservative because they really have no upside, their focus is on preserving their invested capital, their loans. Developers on the other hand bear the full downside risk and also share an upside and therefore they would expect a commensurate return. But what's important in the context here in P3s is there's a competitive marketplace here and to win a deal, a developer is concerned about obtaining debt financing, that's actually their priority because that is usually a large funding source and having a competitive price for that debt enhances their competitiveness so they are actually aligned to a certain extent with lenders, then secondly, they want to bid the concession. And only thirdly are they worried about getting cash flows that exceed their equity return, this is not to say that this is not important but as we see it based on our interviews and our case studies, lenders do have a relative close alignment with-- developers have a close alignment with lenders when looking about risk. On the other hand, public agencies are somewhat different, there's two major issues that they're addressing, one is to obtain value for money and the other one is to access private capital, value for money is trying to find a way to best allocate risk between the agency and the developer, these are very difficult, the revenue risk is very difficult to manage for both parties. One thesis that we have is that for some public agencies, actually managing revenue risk is maybe easier because they have some control over regional development or in some instances have a toll road authority or a collection of roads so they can absorb some risk on a new road. And then for a developer, a developer will price the risk often into their bid so they pass it onto users or in some cases as we've found, developers will choose not to bid because they saw the risk is too much. So our thinking here, out thesis is that retaining revenue risk in some instances, may be to the advantage of the public agency because it may create higher value for money. Another consideration however for a public agency is to obtain private capital because capital is limited and P3s do open up avenues for new funding sources, in theory they can reduce overall funding cost. And from a legal perspective many agencies are restrained from truly borrowing all that they need or all that they could borrow by legal and other political constraints so that accessing private capital and off balance sheet financing may be to their advantage even if they could actually have the capacity to finance the project themselves. So these are some of the considerations we went through in looking at these mechanisms. As I mentioned, we put these mechanisms through this filter of these four criteria, one was value for money, as you mentioned, let's create the best value for money for the public agency, two is the fiscal impacts on the budget of the public agency, does it allow the group to off-balance sheet financing, is the obligation a direct or contingent liability which we'll discuss shortly. Thirdly, can the mechanism allow for financing, will the financial markets accept the mechanism as it is and that may vary. And last, how easy is it to implement this mechanism, is there unintended bidding behavior created, is it easy to compare bids, is there transparency and these are all a variety of considerations in evaluating these mechanisms. I guess I'll turn it over to see if there are any questions right now.

Patrick DeCorla-Souza: Yeah, so folks, if you can type in your questions in the chat box, that'll be great, we will open it up to the phones at the end of the presentation but in between after every ten minutes or so, we will stop to take any questions in the segment just presented. So we see there's one person that's typing. Well, nothing's coming through, so why don't we just move on and we'll deal with questions after the next segment? Sasha?

Sasha Page: Okay, good. Okay, so I'm going to jump into the first of the five mechanisms, it's the Present Value of Revenues. This is a mechanism that was actually developed in the UK but really expanded in Chile and then elsewhere in Latin America. And essentially the way this mechanism works is that the bidders bid on the overall value of the revenues that they want to receive in this concession over a period of time, let's say 25 years. That amount is presented in today's dollars or today's currency and then as the concession unfolds, when the revenues are received, those are accredited to this overall amount, discounted at a discount rate that is provided at the time of the bidding process. So what this means is that the actual date of the concession is flexible, because if revenues are higher than expected then the concession will end sooner, if they're less than expected then the concession would be extended with a potential cap on the overall...

<break in recording>

Patrick DeCorla-Souza: Sasha, we lost you.

Sasha Page: Okay. Can you hear me now?

Patrick DeCorla-Souza: Yes, yes.

Sasha Page: Okay. Can you see the chart on page 15?

Patrick DeCorla-Souza: Yes.

Sasha Page: Okay, great. So I'll just show you this chart and you'll see these charts several ways. The line here is the expected toll revenue line, the operating costs are in yellow, if it's the developer's responsibility, it's in dark yellow, if it's the agency's, it's lighter yellow, in green is debt service and the line above zero, this is the net cash flow to equity and in this case the equity developer receives cash flow until 2039 and then thereafter, this road is still operating, the agency receives cash flow in the remaining years of the asset life. So the advantage here is that in terms of a value for money, the developer is protected against downside revenue scenarios. So this is a relatively efficient risk pricing. In terms of fiscal impact, there's no adverse impact to the agency, however, if the concession is extended, then the agency will not receive certain amount of revenues that it may have expected but that's the price of being part of this agreement. In terms of financeability lenders are generally protected but they may need to be flexible because if the concession is extended then their repayment is also extended as well, and I'll talk about that in a second. Implementation is pretty easy because gross revenues are easily monitored, there have been some issues about the appropriate cost of capital that has been used. But I'll return to financeability, the challenge about this is that for some capital markets lenders like bond shareholders of bondholders, they are generally not very flexible whereas banks could potentially extend the concession loan for several years and because in the U.S. we do use bond financing, private activity bonds for instance, there was some concern that this cannot be directly implemented in those types of transactions. I will show what the downside looks like in this chart here, as you see here, the expected in red is the toll base case but the realized revenues are in blue and consequently the concession is extended, there's less equity in this case. On the next slide, I'll show you the impact to the agency, as I mentioned the agency received its revenues later and that's just simply the consequence of this concession. So this is a mechanism that we think from an economist's standpoint is very interesting, it applied in Chile a couple of times but frankly it has not taken off very much and partly because of the reason I mentioned has not been used in other places but we believe that it's worth considering in these kinds of examples where there is a lot of uncertainty about revenues. I'm going to shift now and turn it over to my colleague Wim Verdouw who will talk about two types of mechanisms, the Minimum Revenue Guarantee and the Contingent Financial Support which are somewhat similar. Wim?

Wim Verdouw: Thank you Sasha. For the Minimum Revenue Guarantee, as explained by Sasha, it's going to be a bit similar to the one that we're going to present after this. As the name implies, it is about guaranteeing a minimum revenue and it's in this case the agency that guarantees that to the developers. So there is a revenue line, a minimum revenue line that the agency needs to set and should revenues, toll revenues, fall short of this amount then the agency commits to paying the difference to the developer. This mechanism has been tried in a variety of countries including Canada, Brazil and South Korea, and what we typically see is that because there is a minimum guarantee the government also feels that it has a right to get some of the upside, so we have a bit of a reciprocity in which case if the revenues are let's say higher than 125 percent of the project revenues then everything north of that number may be shared and then of course the sharing key is up for discussion. The advantage of a Minimum Revenue Guarantee is you do not require, the government, the agency is not required to pay a certain subsidy to the developer upfront but instead agrees to pay potentially additional revenues to the developer over time. From this sharing of the risk, it means that the developer can be relatively certain, or can be quite certain, there is a limit to its loss, its revenues will never fall below a certain level and as such, this takes away a significant amount of revenue risk. And as explained by Sasha earlier, our belief is that if the risks are more manageable for the developer, inefficient pricing is less likely and more developers are expected to bid resulting in higher value for money. The fiscal implications are however a little bit more difficult. So from an agency perspective, the agency does not know in advance how much it may or may not have to contribute to the developer, that's what we call a Contingent Liability. So whereas an upfront subsidy would be a direct liability to the agency, these are continued liabilities that may or may not occur. From a financeability perspective, of course for lenders, this mechanism is very attractive because the revenue risk is largely taken care of or at least the lower end which means that it should be easier to get more attractive financing, potentially even higher leverage. And from a implementation, it is not particularly difficult, it's a very transparent mechanism, revenues are relatively easy to measure, the key challenge here is defining what should be the revenue, a minimum revenue level that could be something like 50 percent, it could be something up to 80 percent. And a second complication is how do value on the government's books, on the agency's books, how to value this continued liability and I want to go a little bit deeper into that. So when we're talking about these MRGs, the Minimum Revenue Guarantee, the question now is how do we compare a direct liability such as the upfront subsidy to a continued liability? Upfront subsidy, the government, the agency knows upfront that it will pay let's say 100 million dollar subsidy. A contingent liability, the agency may or may not have to pay on an annual basis a certain amount to developer, the actual amount again is not a certain number, it depends on the actual revenues or traffic. So the contingent liability can create a significant fiscal burden if the traffic ends up being lower than expected, at the same time, it may also end up being zero burden if traffic was higher than expected. And in terms of comparing these two, it is not necessarily straightforward to compare an upfront subsidy of 100 million dollars to for example a 20 year minimum revenue guarantee of 15 million dollars per year. Here we're seeing a similar graph as to one that Sasha presented earlier. Below the X axis, we find all expenses to the developer and to the agency: in green, the debt service; in yellow, the O&M. And above the X axis we see the net revenues to first the agency up to 2049 in this case- sorry, to the developer- and from 2049 to the agency. We've also plotted two additional lines besides the expected base case, if the revenue sharing, like I mentioned earlier, if revenues are higher than expected, in this case we chose a level of 150 percent of the base case, then we would expect them to be share with the agency, but most importantly from the developer's perspective, the minimum revenue level is defined here as 70 percent of the base case. So in this particular case, the revenues are actually between those two lines, it is exactly on the projected base case and there is no payment from the government to the developer. Now looking at the extreme downside case, you see that the blue line, the realized revenues are lower than the MRG and that means that the government will have to pay a, in this case, relatively small amount to the developer. I'm going to try to point out where it is. As you can see there's a small blue dot here, those are exactly the amounts, the difference between the minimum revenue guarantee of 70 percent and the realized toll revenues. And as you'll see on the next slide, that amount is of course equal to what the agency ends up paying. So in this particular case, the agency pays a relatively minor payment every year to the developer, but should the revenues fall lower than the 70 percent that we are at right now then this payment increases. And I'd like to stop there for a second and give you the option to ask questions.

Patrick DeCorla-Souza: All right, so thanks Wim, and again, folks please feel free to send a question in the chat box. We will make the phone line available at the end of the webinar, but in the interim, if you have some questions, feel free to type them into the chat box. Now we do have one, it was from the previous segment, so Lizardo Bolianos asks, it is interesting your linkage between revenue risk and regional development, what is your evidence on how that can be shaped in particular projects particularly when value capture is not used that much? Sasha, do you want to respond?

Sasha Page: Sure. A couple of thoughts. Inasmuch as a local agency or local government coordinates with the other planning agencies in its region, agencies do have control over where new projects can occur and can shape regional development to a certain extent. Obviously MTOs in the U.S. do that. So that is where there is some control. As I mentioned there are regional toll agencies that build new toll roads, take revenue risk on a new segment but then cross subsidize that risk throughout the entire system. So there are ways from a public perspective to absorb some revenue risk that may be not a tool that private operator has in those examples. But I think that's our hypothesis but we do recognize that both public agencies and private developers have a challenge in addressing revenue risk, it's not as if public agencies can do it that much better and hence the need for these tools to help share those risks.

Patrick DeCorla-Souza: Thanks, Sasha. There's one more question from QC, how is the contingent liability managed by public agencies?

Sasha Page: Thank you. I think what I would suggest if we can is Wim will address this and it probably is a good example, the next mechanism actually deals with contingent liabilities in the contingent financial support mechanism.

Patrick DeCorla-Souza: Why don't you go forward with the next segment, thanks.

Wim Verdouw: Right, so to quickly address QC's question, it is actually one of the challenges for us. If a government commits to a direct subsidy, things are very straightforward, if you have the choice between 100 million dollars direct subsidy or 100 million dollar contingent subsidy, then most likely you will still choose a contingent subsidy because you may not have to pay it but at some point there is going to be a trade off, what about 100 million direct subsidy that you have to pay no matter what versus a 200 million dollar subsidy, you may or may not have to pay. It's one of the things I pointed out earlier, it is very difficult and economists are struggling how to properly value this given that we're talking about payments in the future uncertain, that is not straightforward and even from an accounting perspective, there's a lot of disagreement of how this should properly accounted for.

Sasha Page: And let me just add to that, there's also legal regulatory issues, certain states for instance will value a contingent liability at a 100 percent of its potential value even though that economists would argue it's much lower than that and the just reflects different standards and that becomes an issue in applying this to certain P3s.

Wim Verdouw: And actually, that is a very nice bridge to the next support mechanism, the continued national support to a CFS as we called it. Under the CFS, the government agency doesn't only guarantee a revenue level but actually it guarantees to repay debt, in other words, it takes over the risk that are associated with revenues but also those with other costs such as O&M. From a value for money perspective, if we compare this to the MRG, we believe this is sub-optimal. Right now the developer is no longer incentivized if all O&M costs are under the responsibility or being transferred effectively the risk associated with them to the agency, they are no longer incentivized to manage lifecycle costs. So therefore we're still thinking this creates a value for money compared to other mechanisms but perhaps not quite as much as the MRG that was specifically targeting the revenues. Just like before, the CFS creates continued liability and with it, the difficulties to predict how they will evolve over time and how to value them today. In terms of financeability, we would say that the CFS provides an even better protection than the MRG, in this case, not only the revenue is covered but also unexpected increases in the O&M costs would also be covered, in other words, the lenders can be very, very sure that they will be repaid in full and on time. From an implementation perspective, I think it's worth mentioning here that the DRAM, the developer ratio adjustment mechanism that was used in the I-77 is an example of a contingent finance support. In this case, the North Carolina DOT, committed to paying 12 million dollars per year up to a total of 75 million dollars in total to the developer to ensure that its debt service would always be paid or in other words, the DSCR would hit 1.0 in any given year. To come back to the point that Sasha was making earlier about how this is accounted for, in North Carolina, this is indeed in the books at 100 percent, so any potential future outflow that has not been paid yet under the DRAM is still in the books and so they are looking at this from an accounting perspective as if this is a direct subsidy even though they may end up paying less or may end up paying zero. But from an accounting perspective, it's interesting and so it also goes back to QC's question from earlier. Again, a very similar graph as earlier, here in the dotted line, we see the level of support that is being guaranteed by the agency. In this case, and that's just an assumption that we're making this particular case study, we're saying that it runs all the way to 2034 which is assumed to be the period for a debt service, and earlier of course if the agency says we'll provide up to ten years, then that means that the debt finances would be at risk in the remaining couple of years. Again, under this mechanism it would make sense mostly like to have an upper level over which revenues would again be shared with the agency in this case. In a downside scenario here, very similar as before, we now see that the actual revenues, the blue line are slightly below the guarantees revenues and that means that the remainder will need to be compensated by the agency and that's what we'll see in the next slide is exactly that, we see that little triangle, a triangular shape running between the blue line and the dotted red line being replicated below the X axis, that is the payment from the agency to the developer. Again, should the revenues come even lower, it means that the payments will be higher, and again as we saw before from 2050 onwards, revenues and cost are both flowing through the agency as we assume the concession to be finished. And with that, I would like to hand it back to Sasha.

Sasha Page: Great. Thank you, Wim. We're going to go into the third mechanism that is not quite as extensively used worldwide but I think is intriguing. As Patrick said, the two general approaches to toll road P3s in the U.S. are revenue risk and the other one's our availability payment. In one example, a very good example, in Canada, in Quebec, there's a combination of availability payment with a revenue sharing in the A25 concession and there are also some smaller examples of that as well. Essentially the developer receives an availability payment after respective performance deductions sized at a certain percentage of the forecasted revenues. In the case in the A25, I think it was 60 percent of projected revenues. So there's a base rate that the developer is comfortable with receiving. And then between 60 and 120 percent, the developer takes full revenue risk and thereafter, above 120 percent similar to the Minimum Revenue Guarantee, there's a sharing mechanism between the developer and the agency. So this reduces inefficient risk pricing in terms of value for money, developers have greater certainty and therefore they bid in a more competitive way but the risk, revenue risk exposure does incentivize the developer as well. Fiscally, it creates long term liabilities but also future revenues for the agency, so the agency can receive some toll revenues, it's not completely handing over all that to a third party. In terms of financeability, it depends on how this is structured and it was successfully financed in Quebec. I think the challenge that we found is when you approach a rating agency who are the major gatekeepers to the bond financial markets in the U.S., the question is, is this an availability payment transaction with different risks but generally fewer or really no revenue risk but other project delivery risks, or is it a toll concession with all of the above plus of course revenue risks which are of much, much greater import here. I think it's a doable solution but nevertheless these are two different views of risk and combining them two does create at the least a lot of documentation, perhaps some more legal work that has to be carried out. In terms of implementation, this also requires a very coherent procurement strategy because again, there are two different ways to approach revenue risk. I'll show you a similar chart here, this is a bit more complex chart but essentially the developer is receiving revenue in this red line here, there is a availability payment which are these payments here, the developer also receives, these are outflows from the agency. The agency benefits over time in these shaded columns here but then of course they benefit when the concession is over. The developer benefits significantly once the debt service has been repaid. In a downside, in a similar way, there's basically no equity payments and in this case there is some simply availability payments that are made and some losses for the agency because they do not receive any additional monies, or net monies, until the concession is over. So this is I think a very intriguing example, but one that needs to be well thought out because it does really combine two separate regimes. Let me just stop here for a second to see if there are any questions.

Patrick DeCorla-Souza: All right, Ahmed Abdel Aziz has a question, what is a form of AP plus realized revenues? Is it AP plus tolls? Is this in reference to a total performance payment to the private developer?

Sasha Page: Yeah. I think the answer is it is AP plus tolls, so in this case, in the A25 case, the developer is subject to performance requirements, if they don't maintain lanes, if there are maintenance issues then they have a performance penalty imposed upon them similar to availability payment transactions elsewhere. The tolls however are shared as well beyond a certain level, so the developer has some certainty but then beyond that then they share tolls.

Patrick DeCorla-Souza: All right, thanks Sasha. So let's move on so that we can stay on schedule.

Sasha Page: Sure. I think the final mechanism or mechanisms really are innovative finance programs, this is a category that includes a number of similar mechanisms, the ones that probably some folks on the call are most familiar with are the TIFIA program which is administered by the Build America Bureau and the RRIF program which is also now administered by the bureau and that is for commuter rail and freight rail. The former, TIFIA covers roads, transit and some high speed rail as well. These mechanisms provide borrowers, essentially there is some subsidization, these are in the case of TIFIA, lenders receive a treasury like rate which is clearly an advantage to the current market. In Spain there is a similar mechanism offered by public agencies whereby the operator can change their toll rates. So these are all ways to improve the financial structure of the P3, they absorb some risk so they do create some value for money but they generally are not as extensive risk transfer mechanisms as previous mechanisms like the MRG as we've mentioned. In terms of the fiscal impact, they do require essentially a subsidy, in fact we see that in the U.S. with the RRIF program which actually requires an upfront payment. In the TIFIA program, the subsidy is essentially paid for as part of the program. In terms of financeability, these generally are financeable, again, the example, the TIFIA program, it works very well with other instruments and TIFIA has finance projects on its own. In terms of implementation, these generally do not create major implementation challenges. We have some similar charts as earlier, in a normal case this is what you would see with again the net inflows for equity in a period of time until the concession is over and then thereafter flows go to the agency. In a downside case, obviously there's less revenue to share and that's a burden to the equity and will also burden the public agency as well. And as you can see in this chart, this is really the subsidy, the implied subsidy that occurs with this mechanism. As I said, this is a relatively easy mechanism to implement and with the TIFIA program in the U.S., it's fairly extensively used in many of P3s, many states also have infrastructure banks or similar programs where they lend in a similar way to other infrastructure transportation ports, at airports in a similar manner as a similar mechanism. I guess I'd like to conclude here with a broad summary of our views on these mechanisms on this next chart. We think that the first four provide good value for money, present value of revenues, the two mechanisms, the minimum revenue guarantee and the CFS and availability payment, revenue sharing, innovative finance programs are helpful but not as strong. The fiscal impact, it can vary among these, the fiscal impact could be larger with the present value of revenues and the minimum revenue guarantee in the contingent financial support, CFS are similar. In terms of financeability, it really depends on the nature of a specific program, we feel that the minimum revenue guarantee and contingent financial support are similar but really depends as I said on the actual legals here, minimum revenue guarantees as we mentioned in South Korea and in other places, were very, very generous and so it's easy to finance with them and in fact there was a backlash in some of these because they were too generous, they created a major liability for the government and were pulled back. In the U.S., the I-77 financing could be accepted by the financial markets. In terms of ease of implementation, we have some reservations about the PVR, again the Minimum Revenue Guarantee and Contingent Financial Support are probably very similar, there's not that much experience with the minimum revenue guarantee in the U.S., with the CFS there is experience and we believe that can be implemented fairly easily, it does take more legal work however. I think we'd like to end it there and look forward to any additional questions or a bit of discussion.

Patrick DeCorla-Souza: All right, so here's your chance if you would like to ask a question over the phone. Operator, Ashley can you explain how they might ask a question over the phone?

Ashley: Yes, thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad, a voice prompt on the phone line will indicate when your line has been opened. You may remove yourself from the queue at any time by pressing the star key followed by the digit two. If you are on a speaker phone, please make sure your mute button is turned off to allow your signal to reach our equipment. Once again, it is star one. I'll pause for just a moment to allow everyone an opportunity to signal for a question.

Patrick DeCorla-Souza: Okay, so while waiting for the phone calls, Ahmed Abdel Aziz has another question, can we combine some of these mechanisms similar to those utilized in British Columbia P3s? Sasha?

Sasha Page: Yes, indeed they can be, I'm not acquainted with the specific British Columbia example, but innovative finance programs for instance have been used in combination with Minimum Revenue Guarantees, in Chile PVR has been used in conjunction with minimum revenue guarantees as well. In the U.S., the I-77 included a contingent finance support and a TIFIA alone. So yes, they can be used together and obviously we are giving, providing you sort of stylized examples here, each of these mechanisms comes in different ways and different packages and so lend themselves to adaptation with each other or within themselves, there's a number of changes that can be made.

Patrick DeCorla-Souza: All right. Operator, Ashley, is there any question over the phone?

Ashley: There are no questions at this time.

Patrick DeCorla-Souza: All right, so I don't see any in the chat box so let's move on and wrap up. So I just want to let everybody know that this is the first of four webinars, we will be having a webinar on three different reports that we published earlier this month, the first report is on P3 project financing, it's a guide. Then we have on February 9th, a webinar on discussion paper on the use of performance measures in design and construction phases of public-private partnerships and that's on February 9th. And on February 16th, we will have a webinar on an informational report that provides an overview of P3 projects in the highway sector that have been implemented in the U.S. So you may of course download these reports, they're already on our website, the P3 Toolkit and it you'd like to register for the webinars, we show on this slide the URL which will get you to our website and from there you can then register for each of these webinars, upcoming webinars. So I just want to say thank you to Sasha Page and his colleague Wim Verdouw, they were two of the authors on the paper and there was a third author, Marcel Ham who also contributed and all three are with IMG Rebel. Here's my contact information, I am part time with the USDOT's Build America Bureau as well as here at the Center for Innovative Finance Support at FHWA. And I think that's it. So if you'd like to download the report, you can download it right here on the right hand side in the box that says, "File share" so the report is there as well as the slides from this presentation. And Jordan has put up the evaluation form, please fill that out before you leave the webinar. And in conclusion, I want to thank all of those who contributed to this webinar, in particular Sasha and Wim Verdouw, our speakers and Jordan Wainer who was our host and Ashley our operator. So with that, I want to thank you all for attending this webinar and I look forward to your attendance at our future webinars.

Wim Verdouw: Thank you very much.

Sasha Page: Thank you.

Ashley: And that concludes our conference for today. Thank you for your participation and for using the AT&T Teleconference service, you may now disconnect.

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