With :
Jordan National Railway Network Project
And : June 8, 2010 Project rationale Technical description of project Revenue and cost projections Financial structuring of the project Next steps
DRAFT Jordan Railway 3 Existing rail network
Existing rail network comprises:
The ancient Hedjaz railway Existing Rail Network connected Syria to Saudi Arabia The more recent Aqaba Railway (ARC) connects Jordan phosphate mines to the port of Aqaba (although the Shidyia Phosphate Mine is located approximately 30 kilometers from theexistingrailline,requiringthe Abiad trucking of phosphate from the mine to the rail terminal at Aqaba Hassa Hedjaz Station )
ARC is a narrow gauge track Shidiya Legend
network with no rail connections Hedjaz Railway
to neighbouring countries Aqaba Railway Corporation
ARC connects to Aqaba Port in the Phosphate Mines south EXISTING Railway Network = Hedjaz + ARC ARC will be included in the operating concession, to ensure seamless transfer of traffic and cost synergies
Jordan Railway 4 New Railway overview
Syrian railroad to Irak Damascus and Standard gauge rail network beyond Syria Estimated total length of the system within in Jordan: 1,080km. Zarqa Links major centers, ports and Amman entry points within Jordan (Aqaba, Amman, Zarqa, Mafraq) and integrate Jordan with its neighbors
Single track running Train length ( 1,500 to 3,000 meters Saudi Arabia in length) powered by diesel locomotives.
As traffic grows, capacity is augmented by a combination of additional passing stations and longer trains.
Includes: .North-south corridor linking the Syrian border to Aqaba, via Zarqa and the loggpistics area planned West of Amman Shidiya The Southern section includes a 39 km long dual track segment .Extension to the Saudi with approx. 15 km through tunnels. Aqaba border, linking to the Saudi It is expected to be the most heavily trafficked section of the railway network network.
.Extension to Irak This segment serves 3 terminals: Aqaba Container Port, Aqaba Industrial Area, Shidiya phosphate mine.
Jordan Railway 5 Regional railway network development Key Regional Rail Linkages
Jubail
Medina Riyadh
Legend
Jeddah Planned Mecca Existing
Jordan is a key transit point for goods to Saudi Arabia and to Iraq
The new railway will support the rebuilding of Iraq (Iraq’s harbor facilities on the Gulf are insufficient to accommodate). Key traffic will include cement from sources/plants being set up in Jordan to respond to Iraq’s needs. Jordan Railway 3 Regional Railway Network Development (2)
SYRIAN ARAB REPUBLIC KINGDOM OF SAUDI ARABIA The Master Plan Study on the Development of Three lines under development: Syrian Railways in the Syrian Arab Republic, ranked the development of a standard gauge link from North-South Railway, linking Riyadh to the Damascus to the Jordan border as a high priority, Jordanian border near Haditha and Al Jalamid Final design has been completed mining area to the Arabian Gulf. Work on all 4 sections is well underway Jordan and Syria recently commenced negotiation to establish trade corridor that connect Syrian ports EtEast-WtWest line (lan d-bidbridge )extdtends the current with port of Aqaba and the GCC countries through Dammam-Riyahd line to Jeddah. BOT plans the Jordan Railway Network. Special trade have been dropped and it will be constructed by facilitation procedures will be adopted for this direct Government contract. corridor. High speed passenger train linking Medina and Jeddah
IRAQ
Iraq now connected with Syrian network
Iraq has not yet finalized plan for link to Jordanian border
Iraq has called for tenders to design a new rail link between Iraq and Iran, including a major bridge
Jordan Railway Regional railway network development
ESCWA: International Agreement on Rail Development in the Arab Mashreq
Jordan and neighbouring countries have signed the International Agreement on Rail Development in the Arab Mashreq (ESCWA: 2003) 1) Defined minimum technical standards 2) Identified priorities and routes for linking the economies of the region
The ESCWA railway network was extended to cover all the Arab countries “Arab Railway Network” within the Arab League.
The proposed network is fully consistent with the standards and priorities specified in this Agreement.
Railway Development programs are underway in neighbouring countries, including Syria, Saudi Arabia and Iraq. Intergovernmental Organization for International Carriage by Rail (OTIF):
Jordan is a an associated member of OTIF and the Convention concerning the International Carriage by Rail (COTIF) and will become a full member after the national railway network being constructed and international operations started .
Syria and Iraq are already members in this Convention,
Jordan accession to the Convention will facilitate the international transportation of passenger and goods by rail.
7 Jordan Railway 8 Jordan Railway Network: Network Components
Jordan Railway 11 Preliminary Design: Contents and Deliverables
The MoT has commissioned Dar Al-Handasah (Shair and Partners) in December 2008 to carry-out preliminary design and environmental impact assessment for the Jordan rail network. The scope of work consisted of the following tasks: . Task 1: Topographic Survey
. TTaskask 2: GeoGeologicallogical mmappingapping
. Task 3: Hydrology
. Task 4: Geometric Design, Track Superstructure and Drainage
. Tk5GthilITask 5: Geotechnical Inves tititigations
. Task 6: Structural Design
. Task 7: Tunnel Design
. Task 8: Terminals and Yards
. Task 9: Specifications and Bills of Quantities
. Task 10: Utilities
. Task 11: Environmental Impact Assessment Study
Jordan Railway 12 Preliminary Design: Contents and Deliverables
The deliverables consisted of the following: . Drawings . Package 1 : From Syrian border to Saudi border . Pack age 2 : Syr ia Aqa ba line (From s ta. 63+000 to s ta. 464+000) . Package 3 : Zarqa link, Sahab link and Container port link . Package 4 : Zarqa Iraq line (From sta. 36+000 to sta. 286+347.57) . Package 5 : Mafraq Irbid and Hassan link . Package 6 : Terminals and Depots . Reports . Environmental Impact Assessment - Scoping Report (March 2009) . Evaluation of Alternative Train Configurations (October 2009) . ESIA draft final report and appendices (December 2009) . Netw ork D escpo,escription, D esgCesign Crit eaadSpeccaos(ecebe00)eria and Specifications (December 2010) . Preliminary Engineering Report – Bridges and Structures (December 2010) . Bills of Quantities (January 2010) . Drainage Report (January 2010) . Updated Operational Evaluation (January 2010) . Geotechnical Interpretive Report (January 2010) . Survey Report (January 2010) . Tunnel Report (April 2010)
Jordan Railway 13 Preliminary Design: Contents and Deliverables
Bridges
RilRailway Viad uct s & VhilVehicular VhilVehicular Wadi Brides Overpasses Vehicular Viaducts Underpasses SYRIA ‐ AQABA MAINLINE 0+000 63+000 4 4 10 63+000 464+404.743 26 20 5 12
ZARQA ‐ IRAQ 0+000 36+000 1 3 3 36+000 END 17 8 1
ZARQA ‐ IRAQ RETURN SAUDI LINK 5 3 SAUDI RETURN LINK CONTAINER PORT LINK 1 2 ZARKA LINK 7 3 1 3 ZARKA LINK RETURN 1 SAHAB LINK 4 5 1 2 SAHAB RETURN MAFRAQ IRBID 12 8 1 13 MAFRAQ IRBID RETURN 1 HASSAN INDUSTRIAL LINK 1 HASSAN LINK RETURN
72 58 8 50
Jordan Railway 18 Key Operating Assumptions
Rolling Stock Assumptions All new rolling stock purchased rather than leased Narrow gauge operations carried out using existing ARC fleet with some funds spent on rehab Standard gggauge o perations carried out usin g North American st yle six axle locomotives Trains to be operated using multiple locomotives Locomotives assumed to be 5,000 HP 6 axle locos Wagons assumed to have gross weight of 120t and tare weight of 32t Double stack container flats with 110t gross weight and 28t tare Major overhaul every 10 – 15 years
Train Operations TilTrain leng thbths base d on UICtUIC stan dddards Train lengths will increase based on traffic requirements At density of 14 million ntkm / km, 3 x UIC trains are run At density of 20 million ntkm / km, 4 x UIC trains are run Maximum train lengths: - 1 x UIC (750m): 1 loco and 32 wagons - 2 x UIC (1,500m): 2 locos and 64 wagons - 3 x UIC (2,250m): 3 locos and 96 wagons - 4 a UIC (3,000m): 4 locos and 128 wagons
Infrastructure Maintenance 20% mechanized with increases over life of concession UIC 60 rail, concrete sleepers, elastic fastenings and crushed stone ballast
Jordan Railway 23 Overview of Future Rail Traffic Flows
KEY FREIGHT TRAFFIC FLOWS RAIL TRAFFIC PROJECTIONS
The railway’s freight flows include import flows, export flows and transit flows
2008 2015 2030 Imports include containers destined for Freight Traffic Tonnage Tonnage Tonnage domestic consumer markets, cereals (000s tons) (000s, tons) (000s, tons) destined for local storage facilities, and crude o il des tine d for the JPRC refi nery in Phosphate / Sulfur / 6,430 7,600 11,000 Zarqa Phosphoric Acid Most imports enter via Aqaba Cereals 1,490 1,700 2,300
Exports include phosphate rock and Crude Oil and products 4,000 4,600 6,000 phosphoric acid Containers 3,150 7,300 17,000 Most exports exit via Aqaba Cement and Cement 2,250 6,500 6,500 FdtkFeedstock Transit flows are primarily containerized and destined for Iraq and Saudi Arabia Other 600 800 1,700 Transit flows enter both via Aqaba Total 17,920 28,500 44,500 and via Syria
2008 tonnage shown here represents traffic that railway could likely capture were it to be operational in 2008
Jordan Railway 26 Capital Cost – Summary
The length and cost of each segment is given in the table below:
Section Length (km) Land Cost Construction Cost Total Cost (()JD million) (()JD million) (()JD million)
Segment 1 : • Amman to Syria • Zarqa to Saudi Arabia 255 138 572 710 • Includes link to Sahab Industrial Area, Zarqa Refinery Segment 2 • Amman to Aqaba 399 102 1314 1416 • Includes link to Aqaba Industrial Port, Aqa ba Con ta iner Por t, Shidiya Mine Segment 3 • Zarqa to Iraq 250 25 237 262
Total 948 265 2123 2388
Segment 1 construction will begin in 2011 and requires 3 years to complete
Segment 2 will also start in 2011 and take 4 years
Segment 3 will take 2 years to implement - We have looked at alternative start dates of 2012, 2015 and 2018
Revenue and cost projections Jordan Railway 32 Rolling Stock and Other Investment
As rail traffic increases, additional investments in infrainfrastructurestructure will be required to add capacity to the network .
These include:
Expansion of freight terminals Extension of sidings to accommodate longer trains Expansion of rolling stock maintenance facilities Double tracking of portions of the network
Rolling stock will be added over the life of the operating concession. This cost will be borne by the concessionaire, with the potential that some of the costs will be borne by third parties. The following fleet quantities and costs are indicative, since they vary over a broad range according to traffic assumptions:
Description 2015 2020 2025 2030
Locomotives (quantity - cumulative 57 / 129 62 / 140 69 / 156 80 / 181 investment JD million) Wagons (quantity - cumulative 1545 / 96 1595 / 99 1755 / 109 1995 / 124 Investment JD million) Total cumulative investment (JD 225 239 265 305 million)
Revenue and cost projections Jordan Railway 33 Network Scenarios Considered for Development
Phase 1 Scenario 1 of Jordan Rail Network includes Segment 1, which is Amman described as:
Abiad Hassa • Amman to Syria
Shidiya Legend • Zarqa to Saudi Arabia Proposed Aqaba Phosphate Mines • Includes link to Sahab Industrial Area, Zarqa Refinery
Phase 2
Amman Scenario 2 of Jordan Rail Network includes Segment 1 (outlined above) +Phase 2 which is described as:
Abiad Hassa • Amman to Aqaba
Shidiya
Legend
Proposed Phosphate Mines • Includes link to Aqaba Industrial Port, Aqaba Container Port, Shidiya Aqaba Mine • MfMafraq t o I Ibidrbid
Phase 3
Scenario 3 of Jordan Rail Network includes Segments 1 and 2 Amman (()g,outlined above) + Segment 3, which includes:
Abiad
Hassa
Shidiya • Zarqa to Iraq
Legend
Proposed Phosphate Mines
Aqaba
Revenue and cost projections Jordan Railway 34 Transaction Structure OPTIONS
None of the network scenario allow the project to be financed by the private sector Alternatives are: 1) the state financing of the project, and the state operating it or delegating the operation under a management contract, or 2) combining the state financing of the infrastructure, with the private sector ownership and management of the operation. This structure is detailed below.
DUAL STRUCTURE OPTION Most European countries which have introduced the private sector in railway transports, have adopted a model where (i) private companies operate the railway services, and where (ii) a dedicated state-owned company owns the infrastructure. This is because: Infrastructure is a natural monopoly Infrastructure is capital intensive and requires long-term financing, on durations which are usually longer than what banks are ready to lend Infrastructure building and operating requires typically state type rights of passage and is a heavy regulated activity In contrast, the railway services require less capital investment, need to be customer oriented, and can (in theory) be open to competition In addition, because of the financing environment today, such structure would allow to combine the low financing cost, which a state-owned structure can enjoy, with the market discipline and efficiency brought by the private sector on the operations side
PROJECT STRUCTURE
OPERATOR INFRASTRUCTURE (PRIVATE COMPANY COMPANY) (STATE-OWNED) Debt : Debt : State bonds • Operates the Corporate bonds or direct bank financing • Owns and finances Or direct bank financing railway the railway services (60%) infrastructure Lease Equity : • Maintains the • Debt amount is a infrastructure Equity : function of the lease State private investors, payment which is (Cou ld b e multi -stt)tate) industrial partners feasible (40%)
Jordan Railway Network Project Jordan Railway 41 Time line
Step Date
Approve transaction structure principle at GoJ level Feb 30, 2010
Discuss transaction structure and model with International lenders May 2010
Approve and Freeze Transaction structure June 30, 2010
Prepare offering :
Legal & regulatory environment Parameters of lease contract Summer 2010 Information memorandum Transaction documents Engage formal marketing
Circulate updated teaser September 2010 Road show Request Expressions of Interest/Prequalify September 30, 2010
Initiate Investors’ due diligence and Q & A October-November 2010
Finalize transaction documents November 30, 2010
Request formal offers January 2011
Select preferred bidder January 30, 2011
Conclude negotiations and close transaction February 2011
Next steps Jordan Railway 51 This presentation has been prepared by BNP PARIBAS for informational purposes only. Although the information contained in this presentation has been obtained from sources which BNP PARIBAS believes to be reliable, it has not been independently verified and no representation or warranty, express or implied, is made and no responsibility is or will be accepted by BNP PARIBAS as to or in relation to the accuracy, reliability or completeness of any such information.
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Jordan Railway 52