INVESTMENT OPPORTUNITIES STATE of SÃO PAULO PUBLIC

INVESTMENT OPPORTUNITIES STATE of SÃO PAULO

PUBLIC PRIVATE PARTNERSHIPS PROGRAM

2012 Brazil and São Paulo

2010 Brazil São Paulo %

Territory (thousand sq. Km) 8.515 248 3%

Population (million) 191 41 22% Geography

GDP - nominal (US$ bi) 2.089 685 33%

GDPper capita (US$) 10.952 16.604 1,5x Economics

Sources: IBGE, Banco Central and SEADE Exchange rate: US$ 1 = R$ 1.76 São Paulo State Highlights

2012 2012 Revenues 2.007 2.008 2.009 2.010 2.011 Expected Expected Total Revenues 47,53 59,76 59,61 77,05 84,97 89,03 100% Tax Revenues 36,73 46,74 44,73 58,64 67,73 69,48 78% Transfers 4,60 5,40 5,13 6,61 7,29 7,38 8% Others 6,20 7,61 9,75 11,80 9,95 12,18 14%

2012 2012 Investments 2.007 2.008 2.009 2.010 2.011 Budget Budget Total Investments 4,51 7,22 9,13 9,72 8,21 10,77 100% Logistics and transportation 1,01 2,38 3,38 3,16 1,99 2,00 19% Mobility / Mass Transportation 1,01 1,47 1,69 2,26 1,83 3,30 31% Housing 0,41 0,52 0,51 0,89 0,92 1,09 10% Sewerage and Energy 0,54 0,84 1,08 1,03 1,07 1,51 14% Defense 0,20 0,20 0,33 0,36 0,40 0,38 3% Education 0,31 0,36 0,57 0,70 0,55 0,77 7% Health 0,27 0,26 0,37 0,28 0,27 0,39 4% Others 0,78 1,19 1,21 1,04 1,18 1,34 12%

Monthly Average exchange rate - Bacen 1,95 1,83 2,00 1,76 1,67 1,76

Historical Revenues and Investments 100 89.0 90 85.0 77.0 80 70 59.8 59.6 60 47.5 50 40 30 20 7.2 9.1 9.7 8.2 10.8 10 4.5 0 2.007 2.008 2.009 2.010 2.011 2012 Expected Revenues Investments

In US$ bi Sources: SIAFEM / SP State Investment Plan, including PPP potential

Projected investment 2012-2015: US$ 65 billion PPP potential 2012-2015: R$ 16.88 billion (US$ 9.59 billion)

* Submitted to State Legislature

Main Areas 2012-2015

SANITATION AND SOCIAL HOUSING HIDRIC RESOURCES US$ 4.4 billion US$ 5.5 billion

SECRETARIAT OF LOGISTICS AND METROPOLITAN TRANSPORTS TRANSPORTS (Highway Ring, Rail (Subway, Trains) Ring, Waterway, Port, Highways) US$ 17.7 billion US$ 12.2 billion

Source: State Secretariat for Planning and Regional Development Exchange rate: US$ 1 = R$ 1.80 Public Private Partnerships - Applicability

Private Coordination, Projects of induction and interest to stimulation the Regular PPP PPP Government Sponsored Administrative Concession Concession Concession or Procurement of Public Financially self-sustaining Works projects

Projects requiring government resources

Traditional public projects The flow of approval for PPP projects

Manifestation CPP Secretariats

PPP Unit Preliminary PPP Technical Proposal Steering Board Studies CPP

Executive Manifestation Secretariat PPP Unit Financial Monitoring Commission PED Steering Concession Unit Board

PPP Unit Public PPP Steering CONTRACT Bidding Board CPP

Sectoral supervision Innovative Fast Track for PPP Projects

• State Decree 57.289 dated August 30, 2011 allows interested investors to present proposals for PPPs Projects

PRELIMINARY PPP PROPOSAL APPROVAL PRIVATE SECTOR EVALUATION by INITIATIVE (MIP) State Commission REJECTION PUBLIC CALL for detailed technical studies, including alternatives

Technical studies $ Technical studies

Technical studies

PPP Project CONTRACT APPROVAL (PPP Project winner PUBLIC BIDDING Assessment by State reimburses selected for the PPP Commission technical study author) REJECTION Portfolio of Projects (USD=R$1,80)

LOGISTICS WATER, SEWAGE PUBLIC SECURITY MOBILITY AND AND FLOOD SOCIAL HOUSING AND PRISON ( 9 projects) TRANSPORTATION CONTROL (1 project/ 2 lots) ADMINISTRATION (5 projects) (9 projects) (1 project)

Water Production Subway (3) Highways (2) Central Area SP Prison Complex (3) Metropolitan Train Railways Sanitation (3) Coastal Risk Area (1)

Express Train (3) Port (1) Reservoirs (1)

Monorail (2) Airports (1) Tietê Channel (1)

Ferry (1) Lowland (Varzea) (1)

PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC IMPROVEMENT (2 projects) (2 projects) DEVELOPMENT (3 projects)

Digital Content for Recycling Centers Drug Plant (FURP) Technology Parks Public Schools Cars Construction and Pró-Creches (Day Care Courthouses -Forum Renovation of Hospitals Centers)

Clearing House 10 SAO PAULO – SUBWAY LINE 4 YELLOW LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT Term • 32 years

CURRENT PRIVATE STAGE Investment PROPOSAL Vila Sônia – Luz • Civil Works Provision of trains Civil works by the U$ 2.6 billion and signaling system; public sector full operation and maintenance services (metro SP) – now • PPP in phase II U$ 555 million PLANNED PUBLIC ACTIONS + PROPOSAL SPONSORED PPP Bidding (from nov 2006) • Lowest public contribution

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 9 Metropolitan rail (Line 8) DIAMOND - CPTM LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

CURRENT Term PRIVATE STAGE • 20 years PROPOSAL Provision of 36 PPP new trains (8 cars ADMINISTRATIVE Investment each) and CONCESSION • U$ 520 million maintenance services (from March/ Bidding: lowest PLANNED 2010) PUBLIC ACTIONS public payment PROPOSAL

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 10 SUBWAY LINE 6 ORANGE LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

Extension: PRIVATE CURRENT PROPOSAL STAGE • 12.8 km Term • 14 stations PPP SPONSORED • 35 years • 24 trains CONCESSION (6 cars each) Investment (proposals received • U$ 3.8 billion from the private (USD=R$1.80) PLANNED PUBLIC ACTIONS 600 thousand sector under PROPOSAL passengers/day analysis )

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 11 SUBWAY LINE 18 BRONZE MONORAIL SÃO PAULO - SÃO BERNARDO DO CAMP O LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

CURRENT PRIVATE STAGE Extension: Term PROPOSAL • 20 km • 25 years • 18 stations PPP SPONSORED • 25 trains CONCESSION Investment • U$ 2.5 billion 400 thousand (Private sector PLANNED passengers/day invited to submit PUBLIC ACTIONS proposals under PROPOSAL government guidelines)

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 12 Metropolitan rail - ABC EXPRESS LINE 10 TURQUOISE - CPTM LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

CURRENT New Line providing PRIVATE STAGE PROPOSAL express service Term between ABC • 30 years region and Sao Paulo city (25 km PPP SPONSORED from Maua to Luz) CONCESSION Investment • U$ 830 million 400 thousand PLANNED (line construction, PUBLIC ACTIONS passengers / day PROPOSAL trains, operation)

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 13 TAMOIOS HIGHWAY AND CARAGUATATUBA AND SÃO SEBASTIÃO SECTIONS

LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

Duplication of

CURRENT Tamoios Highway PRIVATE STAGE (mountain range) PROPOSAL Term and construction • 30/35 years of Caraguatatuba Phase I of civil and São works - public Total Investment Sebastião sector U$ 2.6 billion sections + + PLANNED operation and PUBLIC ACTIONS PPP SPONSORED PROPOSAL maintenance CONCESSION services (Phase II investment and services)

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 14 Water Treatment Station - TAIAÇUPEBA

LOGISTICS WATER, SEWERAGE PUBLIC SECURITY AND MOBILITY AND SOCIAL HOUSING AND FLOOD CONTROL PRISON ADMINISTRATION TRANSPORTATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

Term CURRENT PRIVATE STAGE • 15 years PROPOSAL Expansion of existing Water Investment Treatment Station PPP from 10 m³/s to 15 • U$ 172 million m³/s; construction ADMINISTRATIVE of a sludge CONCESSION Bidding treatment system SABESP PLANNED • Lowest public PUBLIC ACTIONS PROPOSAL (from jun/2008) payment

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 15 SABESP SÃO LOURENÇO PRODUCTION SYSTEM

CURRENT Construction of Sao PRIVATE STAGE PROPOSAL Lourenço Water Term Supply and • 25 years Distribution System PPP and maintenance ADMINISTRATIVE services – Sao Investment CONCESSION Paulo Metropolitan • U$ 865 million Area PLANNED SABESP PUBLIC ACTIONS PROPOSAL (final review of documents)

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 16 RESERVOIRS FOR FLOOD CONTROL SYSTEM – SÃO PAULO METROPOLITAN AREA LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

CURRENT PRIVATE STAGE PROPOSAL Expansion (26 new Term reservoirs), Recovery • 30/35 years (30), Maintenance and PPP Operation (73) of the ADMINISTRATIVE reservoirs for flood CONCESSION Investment control network • U$ 980 million PLANNED PUBLIC ACTIONS (final review of PROPOSAL documents)

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 17 50,000 SOCIAL HOUSING UNITS

CURRENT PRIVATE STAGE PROPOSAL Term Construction, financing and • 30 years maintenance of 50 PROCUREMENT thousand housing MODEL UNDER Total Investment units for low ANALYSIS • U$ 4.0 billion income families Phase I – Sao PLANNED PUBLIC ACTIONS Paulo central area PROPOSAL (10.000 units)

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 18 PRISON COMPLEX FOR 10,500 INTERNS PUBLIC SECURITY AND LOGISTICS WATER, SEWERAGE PRISON MOBILITY AND SOCIAL HOUSING AND FLOOD CONTROL ADMINISTRATION TRANSPORTATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

CURRENT PRIVATE STAGE PROPOSAL Construction, Term operation and • 20/25 years maintenance of 3 PPP prison complexes ADMINISTRATIVE Investment (3,500 interns CONCESSION each) in Sao Paulo • U$ 420 million Metropolitan area PLANNED PUBLIC ACTIONS PROPOSAL

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 19 NEW PRODUCTION PLANT OF AMÉRICO BRASILIENSE PUBLIC SECURITY AND LOGISTICS AND WATER, SEWERAGE MOBILITY HOUSING PRISON TRANSPORTATION AND FLOOD CONTROL ADMINISTRATION PLANNING AND ECONOMIC MANAGEMENT HEALTH EDUCATION DEVELOPMENT IMPROVEMENT

Additional CURRENT PRIVATE STAGE construction, PROPOSAL operation and Term PPP maintenance of the • 20 years new FURP (Health ADMINISTRATIVE Secretariat) CONCESSION Investment pharmaceuticals facility in Americo (private sector • U$ 80 million Brasiliense + R&D PLANNED invited to submit PUBLIC ACTIONS investment and proposals under PROPOSAL partnership government guidelines )

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 20 INTERACTIVE DIGITAL CONTENT FOR STATE SCHOOLS LOGISTICS PUBLIC SECURITY AND WATER, SEWERAGE MOBILITY AND SOCIAL HOUSING PRISON AND FLOOD CONTROL TRANSPORTATION ADMINISTRATION PLANNING AND MANAGEMENT HEALTH EDUCATION ECONOMIC DEVELOPMENT IMPROVEMENT

CURRENT Provision of PRIVATE STAGE technical services PROPOSAL for teachers use at Term classroom and for PPP • 10 years training, with ADMINISTRATIVE development and implementation of CONCESSION Investment interactive digital • U$ 530 million

PLANNED content for 5,000 PUBLIC ACTIONS state schools PROPOSAL

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 21 COURTHOUSES-FORUM

CURRENT PRIVATE MIP STAGE Construction, PROPOSAL recovery and Term maintenance of 06 • 25 years Courthouses: PPP ADMINISTRATIVE Barueri, Bauru, CONCESSIONS Guarulhos, Investment Itaquera, Lapa and (Private sector to • U$ 140 million Presidente submit proposals under PLANNED government guidelines) PUBLIC ACTIONS Prudente PROPOSAL

MODELING OBJECT OF PPP BUSINESS MODEL PARAMETERS 22 Tomas Bruginski [email protected]