Case Studies:

• MRT Jakarta (Indonesia) is a rapid transit system in Indonesia’s capital to alleviate its major road congestion issues. The first phase covers the North-South corridor and comprises of 24 km of track, seven elevated stations and six underground stations. It has used a combination of advertising and other property development mechanisms to supplement its fare revenue. The revenue stream has increased to a level that has remained resilient particularly with the challenges in commuter volumes during the Covid-19 pandemic..
• Shibuya Redevelopment (Japan) uses land value capture that is also used effectively in places such as Hong Kong SAR. By incorporating development-based revenues, a substantial portion of the funding for its transit-oriented developments can be met.
• Hyderabad Metro Rail (India) covered the construction of 72 km of metro rail and included 66 modern state-of-the-art stations under a 35-year PPP concession. It was able to use 18.5 million square feet of transit-oriented development areas to generate additional revenue such as rental revenue and advertising, helping to supplement its patronage revenue.
• LinkNYC (USA) sought to transform New York payphones into ‘smart kiosks’, providing various public services at no cost to the government. The project is being funded by revenue generated by advertisements and user data (case study from the GI Hub Innovative Funding and Financing Tool).

Case Studies:

• The Sao Paulo Lines 8 and 9 Concession (Brazil) uses a demand sharing mechanism where if demand is outside the forecast range, it triggers a financial rebalancing, based on the discrepancy between the forecast and actual figures. Due to the concession being let in 2021 amid the COVID-19 pandemic, for the first year of contract the mechanism is triggered when demand falls >5% outside the forecast. For the second year onwards it is triggered when >15% outside the forecast.
• Jakarta-Bogor-Ciawi toll road (Indonesia) a mature toll road owned by PT Jasa Marga securitised its future toll revenue over a term of five years due to issues with accessing private financing for new projects. Toll road securitisation has been considered in the business case of toll roads such as the upcoming North East Link (Melbourne, Australia) which is providing the flexibility through a State owned toll company to undertake a securitisation process in the future once traffic levels achieve forecast levels.
• Ruta del Maipo (Chile) toll road concession was originally let in 1999 to a private sector consortium who would recoup construction and operating costs from tolls over a fixed period of time. Due to financial and economic challenges in Latin America, the concession agreement was revised in 2003 to have no fixed expiry date and would only terminate once the sponsor recouped an agreed amount (case study from the GI Hub Innovative Funding and Financing Tool).

Case Studies:

• Victorian Government Department of Treasury and Finance (Australia) uses a business case process that separates the investment case from multiple delivery cases. The investment case focuses on the problems or opportunities that require attention from government backed by evidence to support the position. The delivery case demonstrates that the proposed solution can be delivered and covers aspects such as the proposed solution, procurement strategy, and detailed costings including whole of life costings. Through having the funding for the delivery case treated separately, it allows a more appropriate funding envelope to be achieved.

Case Studies:

• Chandikhole – Bhaadrak Section of NH-5 (India) deployed the Hybrid Annuity Model (HAM) to help de-risk the project for private investors. The HAM sees the government and private sector splitting the cost of financing construction, and the government retaining commercial risk while the private sector receives semi-annual annuity payments for ongoing maintenance of the road (case study from the GI Hub Innovative Funding and Financing Tool).

Resources:

• GI Hub Innovative Funding and Financing Tool provides a tool for governments to understand their options and solutions to consider.

Case Studies:

• Thames Tideway Tunnel (UK) involves the construction of a 25 km ‘super sewer’ under the Thames River to prevent its continued pollution from sewage overflows. The project owner was provided with a government support package against the backdrop of the global financial crisis, which provided mitigation against high impact but low probability scenarios during construction that would have impacted the financing of the project. This included mitigating the risk of cost overruns by the government injecting sufficient equity to complete the project or electing to discontinue and compensate debt and equity providers.