Tramways of Barcelona: Advantages and Disadvantages of BOT (Build Operate Transfer) and Its Influence in Concession Contracts in Spain



Tramways of Barcelona: Advantages and Disadvantages of BOT (Build Operate Transfer) and Its Influence in Concession Contracts in Spain

Authors

Antonio García Pastor, Corporacion Española de Transportes, ES

Description

New tramways in Barcelona were opened in 2004, and have been developed under a particular BOT scheme. Several advantages and disadvantages of these financing systems are dicussed in the paper and the influence of these schemes in spanish contracts.

Abstract

The municipalities of the metropolitan area in Barcelona, which are closer to the central city, have a functional dependence with Barcelona, which has been stressed due to the continuous urban development that these cities have had in the second half of the XXth century.

The area surrounding the river Llobregat in its final stretch has been one of the most populated zones in Barcelona metropolitan area. The municipalities of Esplugues de Llobregat, Cornellá de Llobregat, Sant Joan Despí and Sant Just Desvern, where the tramway is implemented have a population of more than 175.000 inhabitants.

In 1987 the first feasibility studies were made and finally in 2000 under the ATM (Public Transport Authority in the area of Barcelona), the contract was awarded to a consortium, which constructed and started the operation in 2004. A twin system was developed in the zone of Trambesos at the north of the city.

The contract was awarded under a BOT scheme with a period of 25 years. Two companies were created (Tramvia Metropolità y Tramvia Metropolità del Besòs) which are cohnstituted in different proportions by Constructors and manufacturers (FCC, Acciona, Alstom, Comsa), Financing groups (Banco de Sabadell, Société Genérale) and operators (Detren ? Connex, Sarbús ).

The awarded consortium creates then basically two subcontracts: one with a construction company during the construction period, and the other with the operator company, during the rest of the concession. In this two companies the partners of the original consortium participate in different proportions, according to the specialities of the subcontracts.

The project has been developed under a Project Finance structure which makes possible that the Public sector funds at long term with a technical tariff, incorporating several commercial and industrial risks and also quality commitments. This is a major advantage of this scheme and after Barcelona it has been applied in other projects.

Nevertheless several disadvantages appear, such as:

· Different objectives between the constructors and operators which may have an influence in several issues, including the quality of the civil work
· Duplication of functions and resources in some cases in the consortium and in the subcontracting companies
· Difficulties of relations between the different parties. Particularly the assignment of responsibilities is a major issue

It is very illustrative to analyse the case of the tramways in Barcelona, since several other tenders have been made with a similar model (Metro of Sevilla, Málaga, tramway of Parla, etc.). Each case has its own problems and solutions, but in general there seems to be a tendency to leave this type of BOT contracts and develop operating contracts which can incorporate an infrastructure toll in order to get back the investment made initially. This tries also to be linked to some type of commercial or availability risks to fulfil the SEC?95 requirements

Publisher

Association for European Transport