Investment Opportunities in Portugal: Port of Sines

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Investment Opportunities in Portugal: Port of Sines Investment opportunities in Portugal: Port of Sines - «The Atlantic Gateway to Europe» 西尼什港口 - 大西洋通往欧洲的大门 The recently announced construction and operation of two new container terminals in the Portuguese port of Sines under a public private partnership represents an excellent opportunity, both for potential Chinese promoters and for financing entities that wish to play an important role in what is expected to become one of the main gateways to Europe. 近期有关于葡萄牙西尼什港口扩建两个集装箱航站的消息对于潜在的中国开发商以及希望在通往欧洲的主要通道中 担任关键的角色的银行来说都是一个绝佳的机会。此项目将通过公私合作模式来开展。 The port of Sines is a large hub port with exceptional features to host and operate all types of vessels. The port is currently equipped with five modern specialized terminals (the liquid bulk terminal; the petrochemical terminal; the multipurpose terminal; the liquefied natural gas terminal and the container terminal) and includes an industrial and logistics zone, with high strategic potential for value added services. The port of Sines is considered a landlord port, as the operations are not carried out by the port authority (Administração do Porto de Sines, S.A.), but by licensed entities or by concessionaires. In this regard, the liquid bulk terminal, the multipurpose terminal and the container terminal are operated under a public service concession by Companhia Logística de Terminais Marítimos, S.A., by Portsines - Terminal Multipurpose de Sines, S.A. and by PSA - Port Singapore Authority, respectively. The petrochemical and liquefied natural gas terminals are operated under a private use concession. Investments in infrastructure and the permanent updating of information technologies and of the safety and environmental protection systems, together with the port’s privileged geographical location, allow to offer direct services to the economic agents of the world’s most important markets, such as China, the US or Canada. As a consequence of the significant growth of the port’s activity and in view of the goal to make it one of Europe’s main distribution centres, the company managing the port has announced the construction of two additional container terminals. The first contacts with potential investors have already taken place. The new container terminals will be built and operated under a public private partnership, by means of the execution of a public service concession agreement, enabling the private sector to play an important role in the construction, financing and operation of the new terminals. Under these agreements, the private partner (the concessionaire) will be able to manage, in its own name and assuming the most important tasks, a public service activity in accordance with specific standards. The concession agreements for the new terminals will also include the construction of the infrastructures necessary for the rendering of the public service ─ the execution of the container handling operations. The project will fall under the Build, Operate and Transfer (BOT) category. However, and as in the agreement for the concession of the current container terminal, the task of constructing the infrastructures may be shared by the grantor (Administração do Porto de Sines, S.A.) and the concessionaire. The concessionaire may be remunerated by the financial results of the public service or directly by the public contractor. 1 The concessionaire is usually a special purpose vehicle incorporated by the entities that presented the successful bid. The structure may exclude any financial resources from sponsors and allow the use of project financing structures to fund the project. Pursuant to Portuguese law on public private partnerships, the contract used will be designed in a way so as to mitigate, whenever possible, the prospect of the Authority introducing unilateral variations. Nevertheless, when avoiding the unilateral variation of the contract for public interest reasons is not possible, the Public Contracts Law approved in 2008 provides mechanisms to counterbalance such extraordinary power and to guarantee economic fairness. In particular, it establishes that, in the event of a unilateral amendment of the contract, the private partner will be compensated for any increase in charges or decrease of expected returns caused by the amendment. Should the contract be terminated early, for reasons not attributable to the concessionaire, it will be entitled to compensation for damages and loss of profit, thus allowing it to recover investments made in the concession which have not yet been reimbursed. The concessionaire’s right to compensation in the event of force majeure affecting the economic financial balance of the concession contract is also foreseen by law. As regards the financing entities, the Public Contracts Law establishes certain mechanisms of intervention to safeguard their interest, especially by granting them (or the entities appointed by them) the power to step in. This gives more flexibility and a wider range of alternatives when faced by the key issues common to infrastructure financing. The construction and operation of two new terminals under a public private partnership thus represents an excellent opportunity, both for potential Chinese promoters and for financing entities that wish to play an important role in what is expected to become one of the main gateways to Europe. For further information please contact: In Lisbon In Beijing Ana Sá Couto Juan Martín Perrotto Uría Menéndez - Proença De Carvalho Uría Menéndez Edifício Rodrigo Uría 2909 China World Office 2 Rua Duque de Palmela, 23 No. 1 Jianguomenwai Avenue Lisbon 1250-097, Portugal Beijing 100004, PRC Tel: +35 121 3515639 Tel: +86 (10) 5965 0701 E-mail: [email protected] E-mail: [email protected] www.uria.com www.uria.com The information contained in this article is of a general nature and does not constitute legal advice. 2 .
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