BOT项目保险－挑战与机会

IMIA 16-67(97)E INSURANCE OF BOT PROJECTS a challenge and an opportunity Presented by: G. Ebner, H. Huppman, B. Jendren, H-B. Schittek, I. Zoller IMIA meeting Sun City South Africa November 1997 Introduction Summary -Key points Example - Development of a Power Plant Project Parties concerned and their Interests Project Risks Contractual Agreements Insurance Examples from the Field of Construction/Erection Insurance Management Summary This paper deals with the new trend in Infra Structure Projects where Private Companies are formed in order to Build, Own and Operate such projects and later on hand them over to Public Interests, if at all. The paper gives an example of the structure and arrangements made in respect of the development of a Power Plant Project. Furthermore it describes "new" insurance risks accentuated as a consequence of such projects and lists a number of ongoing or completed BOT projects. Introduction BOT is the terminology for a model or structure that uses private investment to undertake the infrastructure development that has historically been the preserve of the public sector. There is a growing demand for privately financed investment (PFI) capital for different developments, as the public sector is surrendering more and more of its responsibility and financing of long term investments. "Project finance" is the cornerstone of the BOT approach. It means essentially that lenders look to the project's assets and revenue stream for repayment rather than to other sources of security such as government guarantees or the assets of the project sponsors. The acronym BOT stands for "build, operate and transfer" or "build, own and transfer" (the terms are used interchangeably). There are a number of variants, please see below. However for the purpose of this paper, the acronym BOT will include all these variations. In a BOT project, a private company is given a concession to build and operate a facility that would normally be built and operated by the government. The facility might be a hospital, power plant, airport, bridge, toll road, tunnel, water treatment plant, communication systems to name a few. The company is also responsible for financing and designing the project. The shortage of public funds and lack of efficiency in the economic areas hitherto managed by the public sector has caused the latter to privatise state, regional and municipal areas and to limit its activities to licensing and controlling these areas. Since the public sector is also refusing to take over financial risks and private investors must limit their commercial risk, this trend towards easing the burden on the state has made it necessary to provide comprehensive insurance cover. In the usual structure of a BOT project, the government decides on the need for the project and its scope, requires that the design, performance and maintenance of the project be tailored to the objectives and selects the private sponsors by means of an appropriate bidding or evaluation process in order to arrive at a price that is fair to both the government and the sponsors. So called operator models have acquired outstanding importance in the realisation of privately financed infrastructure projects. These projects are financed, built and operated by private companies which, where applicable, deliver the product at a predetermined price and in predetermined volumes to a public customer; in certain cases, they finally transfer the plant to the public authority at the end of the agreed period of operation and following amortisation of the borrowed capital. A number of BOT projects have already been successfully completed and put into operation, and many others are in the "pipeline". ____________________________________________________________________ Variants include BOO (build, own and operate, i. e. without any obligation to transfer); BOR (build, operate and renewal of concession); BOOT (build, own, operate and transfer); BLT or BRT (build, lease or rent and transfer); BT (build and transfer immediately); BTO (build, transfer and operate); possibly subject to instalment payments of the purchase price); DBFO (design, build, finance and operate); DCMF (design, construct, manage and finance); MOT (Modernise, own/operate and transfer); ROO (rehabilitate, own and operate); ROT (rehabilitate, own and transfer). ______________________________________________________________________________ top of main document Summary -Key points BOT is the terminology for a model or structure that uses private investment to undertake the infrastructure development that has historically been the preserve of the public sector. Since the public sector is also refusing to take over financial risks and private investors must limit their commercial risk, this trend towards easing the burden on the state has made it necessary to provide comprehensive insurance cover. It is a typical feature of these projects that the sponsors invest relatively little equity capital in setting up a project company which then borrows funds for the specific purpose of the project without the sponsors being liable for repayment of the loan (non recourse financing). Due to the different interests of the various parties involved, this seemingly simple concept results in a convolution of complex contractual agreements in practice, all of which are variously interlinked and designed to ensure that the banks financing the project are prepared to accept the credit risk although the borrower is only a project company with relatively little equity capital and the sponsors assume little or no liability for its debts. The art of financing BOT projects lies first and foremost in drawing up a complete and realistic analysis of the risks associated with the project minimising these risks, appropriately sharing the residual risks between the parties concerned (sponsors, lenders, suppliers, purchaser, host country) or, if this proves impossible, passing them on to the insurers. The construction phase is particularly critical. § It is a particular feature of BOT schemes that the project company must bear the risks associated with the project for a very long time despite the slight financial resources available to it. It therefore requires correspondingly long term and comprehensive insurance cover which can only be offered on the basis of a careful risk appraisal: No recovery can normally be taken against the consultant as he is employed by the contractor and therefore included as an insured party. The risk relating to faulty design is therefore normally higher in a BOT project. In a BOT project the principal and contractor are normally the same party or are to be found within the same project company. Therefore there may not be a formalised hand over procedure and problems can therefore occur if a loss happens during this "risk transfer phase", and in particular if partial hand over occurs. This problem can be further amplified for erection projects where the definition of commissioning and operational phases is not clear. In a BOT project major manufacturers are normally also contractors and therefore an insured party, passing the manufacturers risk to the project company. Recovery action is therefore not readily applicable in respect of manufacturers warranties. As the BOT project progresses, the viability may be in doubt due to changes in technology, economical or political environment which could provide incentive for collusion to "construct" a major loss, particularly as the set up of the project company have limited financial obligations. Inclusion of financiers amongst insured parties are frequently asked for. This should not be agreed as this provides risk increase to the insurer. However if they are to be included, the underwriter should request a copy of the risk assessment performed by the financiers. Not only is the complex nature of the construction risk an issue, but also the significant exposures, often in the hundreds of millions of dollars, which has to be addressed. However a number of BOT projects have already been successfully completed and put into operation, and many others are in the "pipeline". top of main document Example - Development of a power plant project Rapidly growing population levels in developing countries have created a large demand for new power plants and the modernisation of existing plants. This in turn demands immense capital expenditure which is increasingly being provided by private investors. It is estimated that independent power projects (IPP) will account for around 40% of the total power plant investments in the year 2000 We will explain details of the procedure using the example of power plant projects. in the case of an operator model, a public utility which is unable or unwilling to invest in building its own power plant, invites private investors to finance, build and operate the power plant from which it simply buys the electricity. The private operator uses the income earned from the sale of electricity to the utility to cover his own costs, including repayment of the loans. Operator models now come in a number of different versions. One thing common to all is that they concern individual projects which are to be operated on a private scale. If the main sponsor is a private power plant operator, they will primarily be interested in long term ownership of the plant. Such sponsors will prefer the BOO version in which the transfer of ownership to the public utility, for example, remains open and the period of independent utilisation depends on the service life of the power plant. In the case of a BOT project, it is contractually agreed from the outset that the power plant will be transferred to the public utility after 15 or 20 years, for example. Depending on the national legislation governing privatisation of the power generation industry, privately financed projects may also have to take the form of BLT, where the company that has financed and erected the power plant does not own it, but leases it back from a public utility. Once a potential project has been identified, the developer searches for partners with whom to share the risk and development costs. Together with these partners, he sets up a sponsoring group which then investigates the proposed project in detail: its feasibility is analysed in financial, technical, legal and ecological terms. If the project is found to be viable, an offer will be made to the regional utility, in fierce market competition. The most important item in the offer and the subject of negotiations will be the price at which the sponsoring group offers to supply electricity for the public grid operated by the utility. If the group is chosen as the preferred partner for the subsequent phases or if it already holds a power generating licence, then work can go ahead on actually developing the project. This stage does not yet constitute an award of contract in the classical meaning of the word, for a customer ordering construction of the power plant still does not formally exist. The traditional relationship between customer and contractor recedes into the background when a BOT project is conceived and is instead replaced by a comprehensive system of contractual agreements at the heart of which lies the project company to be founded by the sponsors independently of the public utility. When the project company is set up, the group of sponsors normally becomes an association of shareholders who must agree on their respective capital contributions with which to finance the company. The latter's liability will normally be limited. The shareholders' rights and duties with regard to erection and administration of the project company are set out in the Articles of Association, together with the specifications concerning its management. It is an essential security principle here that the capital contributions to be paid are in principle limited to the sums specified in the Articles of Association. In traditional financing schemes, the lenders insist that the project's sponsors retain permanent and unlimited liability for the borrower's liabilities. This does not apply to the financing of BOT projects. It is a typical feature of these projects that the sponsors invest relatively little equity capital in setting up a project company which then borrows funds for the specific purpose of the project without the sponsors being liable for repayment of the loan (non recourse financing). This means that the sponsors do not have to report the project company's liabilities in their own balance sheets. The interest rates and repayment instalments for the loans are taken from the project company's cash flow. In many cases, however, the banks providing the capital insist on interim models, particularly on the sponsors' liability until completion of the project. Due to the different interests of the various parties involved, this seemingly simple concept results in a convolution of complex contractual agreements in practice, all of which are variously interlinked and designed to ensure that the banks financing the project are prepared to accept the credit risk although the borrower is only a project company with relatively little equity capital and the sponsors assume little or no liability for its debts. top of main document Parties concerned and their interests The project company lies at the heart of the financing for a project. It represents the legal instrument allowing the shareholders to realise their project with a very much lower risk of being called on themselves. In other words, the project company pursues the common interests of the shareholders. However, the banks are also interested in its ability to survive so that repayment of the loans and the interest payments can be guaranteed. In this respect, the banks also counteract any instrumentalisation of the project company for particular interests. This is a common risk because the shareholders in the project company are normally identical with the contractual partners of importance, except in the case of sponsors with a purely financial interest. In the case of an IPP, this applies in particular to the plant suppliers, as well as the fuel suppliers, the operator and sometimes also the energy purchaser. Although they are all interested in the project company's ability to survive, they all pursue their own personal interests when concluding the respective performance contracts. The project company's shareholders have a number of objectives. First of all, they want to develop new potential sales for their products and acquire additional experience for their own business. As shareholders, they may be able to influence the terms of the contractual agreements. They will make every effort to keep the associated risks at a manageable level, particularly in developing and threshold countries. Their own balance sheet must also remain free from notifiable risks. They also hope to receive an attractive return on equity. States, regional governments or public authorities often initiate privately financed implementation of an infrastructure project when it becomes clear that they themselves lack the competence and funds required. Their primary interest is to assure the project's realisation without surrendering their interests. Developing countries must import know how in the long term, and the employment of national forces is normally also a basic condition for precisely this reason. In many cases, the state or the authority can additionally insist on being granted the option to purchase or take over the project free of charge at the end of the time required to repay the loans. That is the concept underlying the BOT projects proper. The banks do not usually hold shares in the project company. They provide tailor made financing for the project in question. Interest payment and repayment commence when the plant is commissioned. What the banks are interested in is obtaining attractive interest rates with calculable risks. The more difficult it becomes for the banks to seek financial recourse from the sponsors and the project company, which can normally only be held liable to a very slight extent, the more important it becomes for the banks to ensure that the project company passes the existing risks on to its suppliers and customers or obtains insurance cover for these risks and that the project is implemented on schedule, otherwise the regular cash flow from which the loans are to be serviced cannot be assured. The companies doing business with the project company all wish to obtain the best possible financial conditions and assume as few risks as possible. The same also applies to the plant suppliers, the suppliers of raw materials, auxiliaries and fuel, the operator and the energy purchaser. top of main document Project risks The art of financing such projects lies first and foremost in drawing up a complete and realistic analysis of the risks associated with the project minimising these risks, appropriately sharing the residual risks between the parties concerned (sponsors, lenders, suppliers, purchaser, host country) or, if this proves impossible, passing them on to the insurers. The construction phase is particularly critical. This is a phase in which considerable own and borrowed funds are spent without the project generating any cash flow and in which its technical and economic viability have not yet been ascertained. The borrowed funds are not yet serviced during this time. As a rule, the sponsors assume direct or indirect liability in the form of a completion guarantee until the project has been implemented completely. The construction risk routinely constitutes the biggest uncertainty in project financing. In particular, it includes delays in completion, for instance due to intervention by licensing authorities, and non conforming execution of the construction work, non compliance with performance characteristics of the power plant and exceeding the budgeted investment costs. So that they can give the banks a completion guarantee, the sponsors demand corresponding warranties from the plant suppliers with whom incentives are agreed in the form of penalties or a system of credits and debits to ensure compliance. The operating risk essentially includes technical faults and operating defects resulting in non delivery or non performance to the purchaser. The operating risk commences with completion of the commissioning phase and must be precisely distinguished from the completion risk in a contractual agreement. Both these risks are also influenced by the development risk The growing competitive pressure means that more and more technological solutions are appearing on the market which have not yet been fully developed and tested thus aggravating the completion and operating risks. The development of gas turbines is a striking topical example. Commercial risks primarily involve the risk of supply and sales, as well as the associated price and currency risks. Inadequately secured buying and selling prices, as well as disparities arising between the financing currency and the currency making up the revenues from the sale of electricity are typical sources of deficits. Political risks are particularly difficult to quantify. They need not always take the form of direct state intervention, including expropriation in extreme cases. Such problems as political strikes and temporary civil commotion usually remain manageable and can be compensated. Several years of civil war or an overthrow of government in the host country, on the other hand, are almost impossible to control. top of main document Contractual agreements The Power Purchase Agreement between the project company and the energy purchaser, normally the regional public utility, lies at the heart of the contractual system in our BOT example of an IPP. This agreement go