Project Name: Development of the financial model for the Line 15 – Silver concession of the São Paulo Metro – feasibility study and economic-financial modeling of PPPs/concessions for collective passenger transport services – tendered and signed project
Year: 2017-2019
Location: São Paulo
Client: FIPE – Fundação Instituto de Pesquisas Econômicas
Main Project Features: Advisory services in the development of the financial modeling for the Line 15-Silver concession of the São Paulo Metropolitan Rail Company (METRÔ), including the structuring of the concession bidding process and the evaluation of submitted proposals and documents.
Activities Performed:
Concession Modeling: Evaluation of assumptions used in previous monorail concession feasibility studies prepared by Companhia do Metrô; Analysis of Studies resulting from the Public Call Notice issued on February 25, 2017 for Demand Projections and Ancillary Revenues;
Analysis and Proposal of Modeling Alternatives; Economic-Financial Evaluation and Modeling aimed at developing the Concession Model for Line 15 – Silver, including among other activities: Development of the discounted cash flow; Evaluation of the funding sources composition, considering equity and debt participation (capital structure); Evaluation of Alternatives, with calculation of key economic-financial indicators compatible with national and international market practices for investment projects with similar complexity and risks, such as net present value (NPV), internal rate of return (IRR), payback, debt service coverage ratio (DSCR), and other covenants; Proposal of a Compensation Model for the concession and adjustment mechanisms to ensure economic-financial equilibrium; Risk Analysis and Mitigation; Sensitivity analysis, with the development of alternative scenarios for key variables such as fare revenues, fare policy, investment and operational/administrative costs, exchange rate devaluation, and others, applying quantitative methods to measure risk impacts on indicators; Recommendation and Support in Selecting the most suitable Alternative, consolidating the Final Concession Modeling Proposal for CDPED, including the elaboration of key economic-financial parameters; Bidding Process Structuring: Evaluation of the guarantees and insurance structure; Support in Formatting economic-financial equilibrium mechanisms; Determination of mitigation mechanisms and management strategies based on qualitative and quantitative analyses performed, along with their transposition into draft contract agreements; Advisory services in drafting concession bidding documents: bidding notice, draft contract, business plan guidelines, among others; Advisory services during public consultation and post-bidding notice publication, as well as support in evaluating proposals and Contracting the SPE.