Creating value through partnership Aleksander Kozłowski, Skanska Infrastructure Development; Warsaw 9th October, 2012 Autopista Central, Chile

Skanska in short − Founded 1887 in Sweden − International business since 1897 − Listed on the Stockholm Stock Exchange

− 2010 revenues: SEK 122 billion − 10 000 ongoing projects − 52,000 employees − A Fortune 500 company − Member of UN Global Compact Cooper River Bridge Płd. Karolina, USA •Älvsborgsbron, Gothenburg, Sweden 2

Skanska in Poland

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Business streams

General construction

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Housing development

Commercial real estate

Infrastructure projects

Our aims –vision „five zeros”

00000

Zero strat

Zero

zagrożeń

środowiskowych 5

Zero wypadków

Zero naruszeń etyki

Zero usterek

Północna Obwodnica Śródmiejska Wrocławia

One of the most important elements of Wrocław preparation to

EURO 2012 football games Północna Obwodnica Śródmiejska Wrocławia, Project of the Year 2010, nominacja 6

Skanska Infrastructure Developmnet Development − Leader in the development of sustainable, innovative and high quality Public-Private Partnership (PPP) projects.

− Provides capital investment and ongoing operational management to: • highways • hospitals • schools • power plants • other projects

Autopista Central, Chile 7

Integrated strength in development and delivery

− 150 employees globally, 8 offices − Develops and invests in PPP in Skanska home markets − Owns and manages 17 projects financed and constructed by Skanska

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Projects in operation Transportation − A1, Poland − Antofagasta, Chile − E18, Finland − M25, UK − Nelostie, Finland

Utilities − Surrey, Street Lighting, UK − Croydon, Street Lighting, UK − Sjisjka Wind, Sweden

Healthcare − Barts, UK − Coventry, UK − Derby, UK − Mansfield, UK − Walsall, UK − New Karolinska, Sweden Education − Bristol BSF, UK − Essex Schools, UK

Nya Karolinska sjukhuset, Stockholm 9

Autostrada A1, Poland − 152 km dual carriageway. Linking Gdansk with the city of Torun

− Operational effiency, organizational skills − Phase I – 90km. Started in 2006. Ready in October 2008 − Phase II – 62 km. Completed in 27 months, in December 2011. Well ahead of schedule. − Toll road, 95% fee with a 5% traffic driven fee for maintenance − Concession period: 42 years, until 2039 − Total construction contract: €1,282m − Skanska ID's investment: €23mSkanska's ownership: 30% 10

New Karolinska Hospital, Stockholm

Environmental story A1 - Skanska Poland and Skanska ID − Energy efficiency

− Water quality − Road Safety − Special passes for wild animals (boars, wolves, frogs)

− Extensive tree planning − Noise barriers

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New Karolinska Hospital, Solna, Sweden Design, construction, finance, operation and maintenance of a new university hospital with integrated research and educational facilities. − Client: Stockholm City Council. Skanska Ownership: 50%. Partner: Innisfree. − Transfer of risks from public to private sector − In operation: 2016 − Concession period 20-35 years − Total construction contract: SEK 14,6 bn − Skanska ID’s investment: MSEK 600 − O&M: MSEK 300/yr 12

New Karolinska Hospital, Stockholm

The

PPP concept

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PPP – a lifecycle concept − Procurement of a public service from the private sector on a longterm basis − Transfer of risks from public to private sector

− Benefit of private sector management skills − The public sector regulator rather than executor − Construction, operation, maintenance and finance − Transfer back to public sector at end of concession, normally 20-35 years Nelostie Hospital Motorway, Finland University Coventry M25, London Breitener Energetica, Brazil 14

Pros and Cons − Cost of funding − Procurement process

versus − Lower life cycle costs − Earlier realization − Known cost and time − Faster execution − Guaranteed service level − Developed construction sector

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Benefits to Users − Rapid delivery of high quality infrastructure schemes

− Life-cycle and O&M management transferred to private sector − Focus on customer satisfaction for users of infrastructure − Socio economic benefits − Strict observation of environmental requirements

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PPP summary − Need for the project/service − Clear and realistic expectations

− Long term commitment − Political stability − Strong, competent and financially reliable private partner

− Professional and experienced advisers

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Continuity of A1 investment-options − Financed in full by the State budget − Cofinaced by the EU − Financed by a private partner (traffic risk) − PPP based project (availability payment) − Other, mixed scheme…

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Finance from the State budget − Is it possible to finance, within coming years, multi billion pln motorway investement from the State budget?

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EU financing − Possible financing in budget perspective 2014-2020 − High traffic on A1 south and possible low level of EU financing, − Low toll levels for LGV

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Full traffic risk on private partner − Is it possible to transfer full traffic risk to a private partner? − Is it acceptable to a private partner to carry all traffic risks?

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PPP/availability based model, does it work? − Lets have a look on existing PPP/availability based motorways in Poland.

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Conclusion….. − Completion of motorways/express roads program asap by; − EU funding for A1 on a large scale doubtfull − Budget funds on A1, not available − Big demand for large infrastructure PPP projects on the market 23

www.skanska.com

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