Dr. Eng. Sani Şener TAV Airports Group President & CEO
Secret Formula: How to Structure a PPP Model Traffic Passenger Aircraft Cargo Forecasts (done by independent advisor of lenders) Commercia l Per passenger and per aircraft revenues Non aeronautical revenues Estimation of unit costs, staff and maintenance expenditures Economics Inflation Interest Currencies Tax and Accounting Capex Initial investment costs Capex during operations Financing Optimum Debt to Euity ratio Debt sculpturing Cash sweep Results Debt coverage ratios Shareholder returns Sensitivities
Typical PPP Structure: Roles and Contracts Agents Acc. Bank Local Banks Int l Banks ECA IFIs Lenders Bond Investors Insurers Local Sponsors Loan Agreements Direct Agreement (step-in, termination) Concession Agreement/ Land Lease SHA Shareholder Loans / Euity SPV Approvals Permits BOT Grantor / Government International Sponsors O&M Contract/TSA EPC Contract Supply Contracts O&M Operator Contractor Suppliers
Governments Benefit from Airport PPPs Significantly reduce project development risk with transfer of construc<on risk to the private sector Construction Transfer the risks related to Opera<ons and Maintenance with clear KPIs, performance incen<ves alignment on best Int l prac<ces O&M Fiscal op<miza<on and access to private sector financing, freeing government budgets for social sectors Financing Reduce inefficiencies from governmental infra procurement (<ghter contrac<ng and increased rigor of execu<on) Efficiency Assets under PPPs are returned to public sector at the end of the concession Allow Gov t amor<zing the cost of ownership Transfer of assets Poten<al for new revenue streams for governments/ airport authori<es (priva<za<on proceeds, royal<es, ) Source of Revenue
Why are airports good candidates for PPP? Strong growth Forecasted growth leading to potential for significant cash flow and better margins Efficiencies Ability to foster operational efficiencies and improve financial performance Resilience Airports are proven to be uick recovery assets after an external shocks Regulation offering downward traffic protection Opportunities Opportunities to develop nonaeronautical revenues (retail, real estate, ) outside of the regulated perimeter Exchange rate risk Low FX risks as airports have substantial revenues in hard currency Fixed costs bus.
Waterfall of funds Revenue + Provides a cushion during periods of cash flow shortfall (Concession fee, Debt service, maintenance, ) ADSCR = Cash flow Before Debt Service (CFBDS) / Debt Service (Principal+Interest) EBITDA CFBDS Concession fee Opex & Maintenance expenses Taxes Debt service (Principal+ interest) Euity Redeemed and Dividends
Project and Structured Finance in TAV $ SCOPE 6 countries Regional focus PORTFOLI O $4.5 billion Deal volume PARTNERSHIP S Portfolio of 45 banks out of which 8 of which are DFIs 11 business partners INSIGTHS In house execution capabilities Historical close link with best DD advisors DELIVER 12 projects completed Completed 2 M&A, 2 refi deals
History & Milestones 1997: TAV Group is founded with the BOT development of the Istanbul Ataturk International Airport. 2003: First overseas operations of TAV Construction begins with Regional H/Q in Dubai. TAV Airports was awarded with BOT of all major airports in Turkey including Ankara and İzmir. 2005: First overseas operations of TAV Airports begins with Tblisi and Batumi in Georgia 2006: Award of Passenger Terminal Complex of Hamad International Airport in Qatar, TAV Construction s first mega airport project. 2007: the Group was re-structured where TAV Airports Holding went public. 2012: Award of Midfield Terminal Building at Abu Dhabi International Airport and the overall portfolio of TAV exceeds USD 10 Billion and in the same year. 2015: Annual Turnover exceeded USD 3 Billion for TAV Group TAV Group is in 17 Countries and 76 Airports 8 April 2017
Global Recognition in Airport Construction TAV Construction ranks 81 st in the Top 250 International Contractors List of the Engineering News Record (ENR), construction industry s most respected publication. - ENR 2009: 102 nd ENR 2012: 106 th ENR 2015: 82 nd - ENR 2010: 100 th ENR 2013: 103 rd ENR 2016: 81 st - ENR 2011: 114 th ENR 2014: 83 rd For Airport Construction, TAV Construction is No. 1 in the World. - ENR 2009: 3 rd - ENR 2010, 2011, 2012: 4 th - ENR 2013: 2 nd - ENR 2014, 2015, 2016: 1 st
Projects Construction Performance in PPP Scheme PROJECT NAME BUILT-UP AREA CONTRACTUAL COMPLETION ACTUAL COMPLETION ATATURK INTERNATIONAL AIRPORT Istanbul, Turkey PRINCE MOHAMMED INTERNATIONAL AIRPORT Medina, KSA ESENBOGA INTERNATIONAL AIRPORT Ankara, Turkey ADNAN MENDERES DOMESTIC AIRPORT Izmir, Turkey TBILISI INTERNATIONAL AIRPORT Georgia ALEXANDER the GREAT NTERNATIONAL AIRPORT Skopje, Macedonia HAMMAMET INTERNATIONAL AIRPORT Enfidha, Tunisia 264,000 m² 30 Months 22 Months 150,000 m² 32 Months 31 Months 182,000 m² 36 Months 24 Months 250,000 m² 30 Months 24 Months 24,500 m² 12 Months 11 Months 40,000 m² 22 Months 21 Months 130,000 m² 30 Months 30 Months
ATATURK INTERNATIONAL AIRPORT Istanbul, Turkey Client: State Airports Authority (DHMI) Investor/Operator: TAV Airports Holding Main Contractor: TAV Construction Type: Airport Terminal Building (BOT) Completion Date: New International Terminal Building (Jan 2000) USD 307M Extension Works (May 2004) USD 91M Refurbishment Works (Dec 2006) USD 60M Extension & Renovation Works (Jun 2010) USD 88.7M Terminal Extension Project 3 (Mar 2016) USD 42.5M Built-up Area: 400,000 m² (Terminal Building) Yearly Capacity: 60 Million Passengers (2016)
ATATURK INTERNATIONAL AIRPORT Istanbul, Turkey
PRINCE MOHAMMAD INT. AIRPORT Medina, KSA Client: GACA (General Authority of Civil Aviation) Investor/Operator: TIBAH Consortium (TAV Airports Saudi Oger Al Rajhi) Architect: GMW Architects Independent Engineer: Halcrow Main Contractor: TAV Construction Al Arrab Joint Venture Type: Airport Terminal Building (PPP) (Design & Build) Contract Value: SAR 3.6 Billion (USD 963 Million) Completion Date: March 2015 Built-up Area: 150,000 m² (Incl. Mosue, VIP Terminal & Ancillary Facilities) Opening Day Capacity: 8 Million Passengers
NEW DOMESTIC TERMINAL BUILDING, ADNAN MENDERES INT. AIRPORT Izmir, Turkey Client: State Airports Authority (DHMI) Investor/Operator: TAV Airports Holding Architect: Yakup Kazan Engineer: Mott MacDonald Main Contractor: TAV Construction Type: Airport Terminal Building (BOT) (Design & Build) Contract Value: EUR 268,981,528 (USD 366 Million) Completion Date: March 2014 Built-up Area: 200,000 m² (Multi-Storey Car Park: 79,000 m²) Opening Day Capacity: 13 Million Passengers
NEW DOMESTIC TERMINAL BUILDING, ADNAN MENDERES INT. AIRPORT Izmir, Turkey
NEW TERMINAL BUILDING, ESENBOGA INTERNATIONAL AIRPORT Ankara, Turkey Client: State Airports Authority (DHMI) Investor/Operator: TAV Airports Holding Architect: ESSA Engineer: Mott MacDonald Main Contractor: TAV Construction Type: Airport Terminal Building (BOT) Contract Value: EUR 226,802,147 (USD 312 Million) Completion Date: October 2006 Built-up Area: 182,000 m² (Multi-Storey Car Park: 108,000 m²) Opening Day Capacity: 10 Million Passengers
NEW TERMINAL BUILDING, ESENBOGA INTERNATIONAL AIRPORT Ankara, Turkey
NEW INTERNATIONAL TERMINAL BUILDING, ADNAN MENDERES INT. AIRPORT Izmir, Turkey Client: State Airports Authority (DHMI) Investor/Operator: TAV Airports Holding Architect: Yakup Kazan Engineer: Mott MacDonald Main Contractor: TAV Construction Type: Airport Terminal Building (BOT) (Design & Build) Contract Value: EUR 133,578,810 (USD 180 Million) Completion Date: September 2006 Built-up Area: 108,000 m² (Multi-Storey Car Park: 69,000 m²) Opening Day Capacity: 5 Million Passengers
NEW INTERNATIONAL TERMINAL BUILDING, ADNAN MENDERES INT. AIRPORT Izmir, Turkey
ALEXANDER the GREAT INTERNATIONAL AIRPORT Skopje, Macedonia Client: Ministry of Transport Investor/Operator: TAV Airports Holding Architect: GMW Engineer: Mott MacDonald Main Contractor: TAV Construction Type: Airport Terminal Building (BOT) (Design & Build) Contract Value: EUR 74,710,000 (USD 101.4 Million) Completion Date: October 2011 Built-up Area: 40,000 m² Opening Day Capacity: 5 Million Passengers
NEW TBILISI INTERNATIONAL AIRPORT Tbilisi, Georgia Client: JSC Tbilisi International Airport Investor/Operator: TAV Airports Holding Architect: TAV Engineer: Mott MacDonald Main Contractor: TAV Construction Type: Airport Terminal Building (BOT) (Design & Build) Contract Value: USD 62,000,000 Completion Date: January 2007 Built-up Area: 24,500 m² Opening Day Capacity: 2.8 Million Passengers
FEATURED PROJECTS in EPC
MIDFIELD TERMINAL BUILDING, ABU DHABI INTERNATIONAL AIRPORT U.A.E. Employer: Abu Dhabi Airports Company (ADAC) PJSC Architect: KPF Kohn Pedersen Fox Program Manager: PARSONS Engineer: AECOM - Hill (Construction Manager) Main Contractor: TAV Construction CCC Arabtec JV Type: Airport Terminal Building Contract Value: AED 11.7 Billion (USD 3.2 Billion) Completion Date: 2018 Built-up Area: 702,000 m² Opening Day Capacity: 27 Million Passengers/Year 23
MIDFIELD TERMINAL BUILDING, ABU DHABI INTERNATIONAL AIRPORT U.A.E.
MIDFIELD TERMINAL BUILDING, ABU DHABI INTERNATIONAL AIRPORT U.A.E.
PASSENGER TERMINAL COMPLEX, HAMAD INTERNATIONAL AIRPORT Doha, Qatar Employer: NDIA Steering Committee Architect: HOK EPCM: Overseas Bechtel Incorporated (OBI) Main Contractor: Taisei TAV JV (Sky Oryx JV) Type: Airport Terminal Building Contract Value: QAR 15 Billion (USD 4 Billion) Completion Date: February 2014 Built-up Area: 500,000 m² Opening Day Capacity: 30 Million Passengers/ Year
PASSENGER TERMINAL COMPLEX, HAMAD INTERNATIONAL AIRPORT Doha, Qatar
TERMINAL BUILDING 3, CAIRO INTERNATIONAL AIRPORT Egypt Client: Cairo Airport Company (EHCAAN) Engineer: Dar Al Handasah (Shair & Partners) Architect: ECG-NACO Main Contractor: TAV Construction Type: Airport Terminal Building & Airside/Landside Works Contract Value: EGP 2.93 Billion (USD 491 Million) Completion Date: March 2009 Opening Day Capacity: 11 Million Passengers/Year Built-up Area: 211,000 m²
MC-1, DEVELOPMENT of the MUSCAT INT. AIRPORT Muscat, Oman BAHRAIN INTERNATIONAL AIRPORT AIRPORT MODERNIZATION PROGRAM Muharra, Bahrain