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Vasco da Gama Bridge,

Portugal


Prepared by team BRIDGE :






Cristbal Jos Relao Luque,University of Jaen,Spain
Maria Livia Lugoj, Constantin Brancusi University of Targu-jiu ,Romania
Marija Hristovska,University of Maribor,Slovenia

Peter Madro,Comenius University,Bratislava,Slovakia
Tadej Janar,University of Maribor,Slovenia












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Introduction 1
1 A short definition of a public-private partnership (PPP) 1
2 Description of institutional setting for PPP in Portugal 1
3 Detailed description of the Vasco da Gama Bridge project 2
4 Partners involved in the project 3
5 Financial structure of the project 4
6 The time length of the project 4
Bibliography






















INTRODUCTION
Over the last few decades, public-private partnerships have been increasingly used by governments
around the world to finance and manage complex operations. Acording to Cruz and Marques
(2010),Portugal has gained considerable experience with public-private partnerships (PPPs). These
partnerships, typically rest on long-term contracts often for a period of 30 years between a public
body and a private consortium. They require the private partner to provide a public service using an
existing public infrastructure asset or to design, construct, maintain, and operate a new
infrastructure asset. Finance for PPPs has come from private or public funds. In the beginning, PPPs
concentrated in the transport sector highways in particular but the model has began to spread to
other sectors too, notably the health sector. Portugal has been using PPP contracts to finance public
infrastructure since the 90s and currently it belongs to those countries that recur to these types of
contracts more frequently. The purpose of this essay is to describe the Portuguese experience in
PPPs, to discuss how the PPP program was organized, and to address the motives behind the
decision to use a PPP,taking as a noteworthy example the Vasco da Gama Bridge, which was
realised under tight schedule in time for the 1998 World Exhibition.


1. A short definition of a public-private partnership (PPP)
We can not go further and talk about the public-private partnership in Portugal ,before first stating
what is in fact a public-private partnership. PublicPrivate Partnerships, also known as P3 or PPP,
are contracts between government agencies and one or more private partners (which may include the
operators and the financers) according to which the private partners deliver the service in such a
manner that the service delivery objectives of the government are aligned with the profile objectives
of the private partners and where the effectiveness of the alignment depends on a sufficient transfer
of risk to the private partners (OECD, 2008, p. 17).
With other words PPP are arrangements between government and private sector entities for the
purpose of providing public infrastructure, community facilities and related services. Such
partnerships are characterized by the sharing of investment, risk, responsibility and reward between
the partners. The reasons for establishing such partnerships vary but generally involve the financing,
design, construction, operation and maintenance of public infrastructure and services.
2.Description of institutional setting for PPP in Portugal
Effective legal, regulatory and contractual conditions are crucial to PPP success but
can only exist if supported by an efficient institutional structure which both facilitates PPP
development and provides clear boundaries to protect the interests of all parties.

The first PPP law (decree-law 86/2003), established the general regime of a PPP: the definition,
concept, preparation, bid, adjudication, changes, audit and global monitoring. The PPP law was
amended in 2006 (decree-law 141/2006), with the goal to promote a better cooperation between the
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Ministry of Finance and the sectorial ministries, and improve the mechanisms of controlling the use of
public resources in PPPs. Additionally, it introduced the obligation for the inclusion of a public sector
comparator (PSC). The last amendment in 2012 (decree-law 111/2012) focused on centralizing the
PPP process in the Ministry of Finance in order to increase the transparency and control over PPPs,
and at the same time expand the central governments powers over regional and local PPPs.
Before making a decision to develop a public investment through traditional procurement or PPP, the
Portuguese government is obliged to create a task force to study and analyze the project. The task-
force report is a necessary starting point for the launching of a PPP as it comprises the main
characteristics of the technical, legal and financial issues for each project. These task forces also
have a role in evaluation of PPP projects, tender documents and bids as well as in negotiations with
private partners.
The procurement process for PPPs in Portugal follows several stages. The process starts with the
opening of a tender procedure which contains the following information and conditions: PPP
contracting procedures and specifications, analysis of the options that determine the configuration of
the project The next step is international announcement and publishes the tender in the Official
Journal of the European Community. After receiving the bidders proposals, the government makes a
first evaluation. The best-qualified bidders are shortlisted and a round of negotiations starts. At the
end of the negotiation process, two bidders are allowed to present their best and final offer. After a
final evaluation of these proposals, the Finance Minister and the Sector Minister make a joint decision
on the winning proposal. The ultimate stage is the signing of the PPP contract between the
government and the private party (Monteiro, 2005).

3.Detailed description of the Vasco da Gama Bridge project
Over the last 25 years, Portugal has undergone a major infrastructure investment program. The first
large project developed under a PPP scheme was the second bridge over Tagus River, called Vasco
da Gama Bridge

Several elements must be taken into consideration to understand the full complexity of building the
Vasco de Gama Bridge witch is a cable-stayed bridge with a 17.182 m overall length of
crossing,made up of seven sections including the Sacavem and EN10 Variant Interchanges, the
North Viaduct, the Expo Viaduct, the main bridge, the central viaduct, the South Viaduct and the
South Access.. The bridge carries six road lanes, with a speed limit of 120 km/h (75 mph), the same
as motorways, except on one section which is limited to 100 km/h. On windy, rainy, and foggy
days,the speed limit is reduced to 90 km/h.

Fifty million vehicles cross the bridge every year. The traffic on the bridge is managed in the traffic
control room, located in the Toll Plaza building,were we can find 87 video cameras, monitors and
systems that include an Automatic Incident Detector (DAI) which indicates to the operators whether
there is a traffic jam or not. There are also 73 emergency telephone posts installed in both directions
along the bridge and access 5 branches, and linked to the traffic control room; and portal fames with
traffic lights and eight variable speedpanels. To the control room staff also assists patrol vehicles, the
traffic management system and the police and emergency services, to solve any incidents occurring
on the bridge. There is also police post on the bridge and it is operated by the GNR-BT.
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Architecturally, Vasco da Gama Bridge is impressive. It was built to last for 120 years, and withstand
wind speeds of 250 km/h. It was designed to stand through earthquakes up to 4.5 times stronger than
the 8.7 on the Richter scale earthquake that shook Lisbon in 1755.
4.Partners involved in the project

How we said in the first part and how we see from the PPPs definition,Vasco da Gama project was a
contract between a public sector and a private one. When we talk about the public partners involved
in this project we refer to the Government of Portugal and partially to the European Union Cohesion
fund .The private partners are represented first by a consortium named Lusoponte and secondly by
the European Investment Bank.

The first public partner,the Government of Portugal, created an inter-ministerial agency called
GATTEL (Office for the Crossing of the Tagus of Lisbon) in 1991,formed to decide on the location of
the Crossing, as well as to co-ordinate and control the procedures necessary to promote its
construction and operation as a private concession.The agency was chaired by the Ministry of Public
Works. The Government of Portugal also gave government grants needed for the construction of the
Vasco da Gama bridge.

Regarding to the second public partner, the European Union Cohesion fund.,we must say that the
Cohesion Fund is aimed at Member States whose Gross National Income (GNI) per inhabitant is less
than 90% of the Community average. It serves to reduce their economic and social shortfall, as well
as to stabilise their economy. The Cohesion Fund finances activities under the following two
categories: Trans-European transport networks and environment. Cohesion Fund can also support
projects related to energy or transport, as long as they clearly present a benefit to the environment.

LUSOPONTE, a consortium of Portuguese (50.4 %), British(24.8 %) and French(24.8 %) companies,
won the international public tender for the concession to design, construct,overseeing the
construction,finance and operate the new crossing and maintain the existing 25 April bridge for the 33
year concession period.
The European Investment Bank (EIB) is the European Union's nonprofit long-term lending institution
established in 1958 under the Treaty of Rome. As a "policy-driven bank" whose shareholders are
the member states of the European Union,the EIB is a publicly owned international financial
institution that has its current headquarters in Luxemburg and its mission is to make a difference to
the future of Europe and its partners by supporting sound investments and encouraging private
sector development, infrastructure development, security of energy supply and environmental
sustainability.



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5.Financial structure of the project
The Vasco da Gama Bridge funding project, with a total value of 897 million Euros, was mostly
funded by the private sector under a "Build, Operate, Transfer" ("BOT") scheme,a combination of
private equity, through bank loans, shareholders, and public grants as well.
To be more specific, the detailed financial resources for this scheme have been:
European Union Cohesion Fund: 319 million Euros (35%);
European Investment Bank Loan: 299 million Euros;
Toll revenues from the 25 Abril Bridge: 50 million Euros (6.0%);
Others: (shareholders, government grants etc.): 229 million Euros (26%).
According to Lusopontes official web page,Portugal government signed an Agreement, on 3rd July
2000, which established and extended the duration of the concession until 24 March 2030. By means
of this contract, the company obtained the permission to design, construct, finance and operate the
new crossing.

The section tariffs of the aforementioned web page concludes that nowadays the toll price varies
from 2.60 Euros to 11.60 Euros, depending on factors such as size, height, and type of vehicle. The
amount of this funding resource is very significant.

6.The time length of the project
In 1991, the Portuguese government launched an international call for tenders for the design,
financing, construction, and operation of Vasco da Gama bridge crossing the Tagus at its widest point
as the previous structure (the April 25 Bridge) was no longer adequate. In 1994, the Lusoponte
concessionary consortium was selected from among all bidders.

The contract stipulated that the bridge must be completed in time for the 1998 Lisbon World
Exhibition, the World's Fair that celebrated the 500th anniversary of the discovery by Vasco da Gama
of the sea route from Europe to India..Work began in January 1995, three months prior to the signing
of the concession agreement. The bridge was inaugurated on time three years later, on 29 March
1998, what means that the exact time period for the length of the project,completed in a very tight
schedule,is February 1995 29 March 1998. The concession contract it is supposed to end in 2027
at the latest.

The construction of Vasco da Gama Bridge over the river Tagus by Lusoponte has passed into the
annals of the history of civil engineering as one of the largest and most successful projects of the 20th
century.









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BIBLIOGRAPHY


Joaquim Miranda Sarmento : Do Public-Private Partnerships Create Value for Money for
the Public Sector?The Portuguese Experience
http://www.oecd.org/portugal/48168959.pdf


Canadian Public Private Partnership: A Guide for Local Government
http://www.cscd.gov.bc.ca/lgd/policy_research/library/public_private_partnerships.pdf

Cruz, C. O. & Marques, R. C. (2010). Revisiting the Portuguese experience with public-
private partnerships
http://www.academicjournals.org/ajbm/pdf/pdf2011/4June/Cruz%20and%20Marques.pdf

Levison D., Garcia C. R. & Carlson K. (2006). A Framework for Assessing Public-Private
Partnerships.
http://nexus.umn.edu/papers/PPP.pdf

Monteiro, R. S. (2005). Public-private partnerships: Some lessons from Portugal. EIB
Papers, 72-81
http://www.econstor.eu/bitstream/10419/44845/1/494495332.pdf

LUSOPONTE official website of consortium.
http://www.lusoponte.pt/uk/pvg_tarifas.asp
http://www.lusoponte.pt/uk/pvg_projecto_financiamento.htm
http://www.lusoponte.pt/uk/pvg_projecto_tracado.htm
http://www.lusoponte.pt/uk/pvg_projecto_tracado.htm

Lisbon's Bridges and Aqueduct
http://www.luso.u-net.com/bridges.htm

Portugal,Vasco da Gama Bridge
http://www.vinci-construction-projects.com/projets.nsf/en/type-of-
works.htm?openagent&f=Vasco+de+Gama+Bridge

Lisbon,Portugal Guide
http://lisbon-portugal-guide.com/lisbon-sights/Ponte-Vasco-Gama.php

Vasco da Gama Bridge in Lisbon, Portugal
http://lookbridges.com/vasco-da-gama-bridge-in-lisbon-portugal

Vasco da Gama Bridge, Lisbon, Portugal
http://www.roadtraffic-technology.com/projects/vasco-da-gama/

European Investment Bank
http://en.wikipedia.org/wiki/European_Investment_Bank