Real Estate
Real Estate
The Largest Public Private Partnership
22.10.2007
Construction of Potniški center Ljubljana (Travelling Centre Ljubljana) – Emonika will start next year. The total cost of the project exceeds EUR 220 million and it will bring numerous advantages for all participants.
Emonika is a project of significant scale and importance and will therefore meet with a wide response of experts and general public of Ljubljana as well as of the whole Slovenia. The role and vision of individual subjects that play key part in its realization will also be assessed according to the success of the centre. The combined action of the city, Slovenske Železnice (Slovenian Railways) and as well as of the State, is a preliminary condition to effectively realize a project of this size. However, the interests of cooperating partners are certainly different and limited according to their funds.
The main aim of Slovenske Železnice, besides financial considerations, is to ensure a pleasant and well-regulated environment for railway passengers. That would increase their number and assure at least the same standards of facilities, equipment and employees in this area. Here the company does not accept any financial obligations for the realization of the project with the exception of investment in kind.
With the Project, the city of Ljubljana will gain greater connection between the north and south parts of the city and a new bus station. Moreover, the new town-planning scheme will provide the space for expansion of the Masarykova cesta into four-lane boulevard at the east section of the station. The city centre will surely revive after construction of Emonika and last but not least, the city will assure itself an annuity on the account of land tax.
They were looking for a strategic partner
Initial activities considering Emonika go back to the year 2001 when the public company Slovenske Železnice (now Holding Slovenske Železnice) and Mestna občina Ljubljana (the municipality of Ljubljana) signed an agreement on the project. This deal anticipated an urban design of the railway station of Ljubljana area, connection of the north and south parts of the city, construction of an underground passenger hall with appropriate equipment, moving the bus station and construction of business facilities with attractive city programs that should enliven the struggling city centre and make the railway station more appealing for rail passengers. The aim should be attained with a conclusion of a public-private partnership with the chosen strategic investor. The conclusion was to be made through a project company for funding, planning, constructing, trading and administrating Emonika.
In the end of 2004, the newspapers published an invitation to tender for strategic partnership and participation in funds in the construction of Emonika. The urban – architecture solution of the project company Real Engineering from Ljubljana won the international competition in 2002 and was therefore a basis for the public-private partnership. Furthermore, the readiness of the local partners, Slovenske železnice and Mestna občina Ljubljana, to contribute premises and to arrange the communal infrastructure at the site was of crucial importance. They would invest the whole or a part of the funds in kind, whereas the strategic partner would invest financial resources, acquire the majority share in the project company and take control over its operation.
Specialized for building “city-centres”
Eight interested companies applied to the invitation and four companies, TriGranit Holding Ltd. From Budapest, ECE Projektmanagement International GmbH & Co. from Hamburg, Grandi Stazioni S.p.A from Rome and Dutch company AM Development International BV, were selected into second round. In October 2005, the project board of Emonika selected TriGranit as the preferred company. The selection was made on the criteria of financial and urban planning elements of the offer, proposed architecture design, feasibility of the project (based on the common business plan) and the list of basic elements relating to the structure and function of the common company. The project should be finished in March 2010, whereas its commercial part should be completed in November 2009. At the end of May 2007, the supervisory committee of the Holding Slovenske Železnice gave its assent to the contract on common investments. The Slovenian government, who is the founder of Holding, gave its approval this year on October 4. In the same October session, the government declared the Public-Private Partnership Act as law. The Act is one of the conditions of implementation of the public – private partnership. In August 2007, the Mestna občina Ljubljana and TriGranit signed the Equipment of Project Location Contract, which is one of the provisos of the realization of the project.
EUR 222 million
The construction of the WestEnd City Center shopping and amusement centre, the WestEnd Office Complex business centre, the Polus Center trade centre in Budapest and the Polus City Center shopping and amusement centre in Bratislava are some of the reference projects of TriGranit. Furthermore, they plan to construct more of such centres, especially in central and eastern Europe.
In accordance with the contract between TriGranit and Slovenske Železnice, the project will be realized in the framework of a common company (Project Company) in which TriGranit will have a 79.6% share and Železnice a 20.4% share. Slovenske Železnice will invest 22,734.9 square metres of land in their property and in the same time, the State will confer building rights for 99 years on the part of the project that is conducted above and under the rails.
The Emonika project includes 213,885 square metres of building land that includes a shopping centre, hotel, business premises, housing and public-logistics section. That section incorporates a bus station, underground station hall, passages and accesses to railway platforms and the bus station. This section will be built to final stage including the construction of lift engines and escalators or other technical solutions suitable in all respects. The project company will finance and implement the building of the public-logistics centre in whole. The building will progress on those lands where the company will acquire building rights only for the time of construction. After construction accomplished, the whole public-logistics section becomes property of domestic partners.
Numerous advantages for local partners
Csaba Toth, Director-General of the project company TriGranit PCL, sees many opportunities in Slovenia and has a long-term interest in cooperation on Slovenian market. “Emonika is the first project of TriGranit in Slovenia and TriGranit cooperates well with its partner. Here in TriGranit, we hope that Emonika will, with its external appearance, all the benefits and contributions for the citizens of Ljubljana, become another successful project of public-private partnership that we gladly incorporate in our development portfolio,” says Toth.
Besides 20.4% participation in the planned capital of the project company and consequently the same participation in profit, local partners will also acquire minimum guaranteed financial effects and receive the public-logistics section (value: EUR 15 million). The new business and public-logistics centre will contribute to the revival of city centre and enable a substantial improvement of integrated public transport including an increase of appeal of the rail transport. Furthermore, the diversity of the project (stores and restaurants, business facilities, hotel, apartments, cultural, recreation and amusement elements) will contribute to a higher quality of life in Ljubljana. Respected foreign and domestic architects will create quality architectural solutions that will further enrich city architecture and represent the new attractive characteristics of the city. In addition, many new job and accommodation opportunities will emerge in the very centre of Ljubljana.
According to Toth, Emonika will, with all the activities it offers, with renewed public, infrastructure and accommodation possibilities undoubtedly revitalize the important and strategic city centre district that is unfortunately currently dormant.
Toth adds that “citizens of Ljubljana will be offered a centre that will enable them to perform most of their everyday activities in one place and in a quality manner. At the same time, it will facilitate journeys and travelling in Ljubljana and enable quality service to the passengers”.