to be completed faster and more cost-effectively. As with the airport holdings, our PPP projects generate income from dividends, interest from shareholder loans as well as transaction and management fees, plus any gains on market placement or disposals of ownership stakes.

HOCHTIEF PPP Solutions' portfolio of toll road contracts comprises eight projects with a total investment volume in excess of EUR 5 billion. In all, the company is responsible for nearly 800 kilometers of toll road. Some 600 kilometers are accounted for by just two Greek PPP road projects – Maliakos-Kleidi and Elefsina-Patras-Tsakona – on which HOCHTIEF reached financial close in 2008. This also brought the concession contract for the two projects into effect. Construction, operation and toll charging promptly started as a result. The 365-kilometer Elefsina-Patras-Tsakona link is one of Europe's biggest contemporary infrastructure projects.

At the end of fiscal 2008, a further indirect 3.75 percent stake in the Vespucio Norte Express (VNE) project in Chile was sold to investor M.M. Warburg & CO for a purchase price of EUR 25.3 million. HOCHTIEF PPP Solutions has now reduced its interest in the VNE toll highway in two stages from 45.45 percent to 29.2 percent. The sale formed part of our active management of the concessions portfolio and reaffirmed our portfolio valuation.

In the buildings segment, HOCHTIEF PPP Solutions was responsible at the 2008 balance sheet date for 15 projects with a total of 89 schools serving over 60,000 students in Germany, the UK and Ireland. The company's portfolio also includes Gladbeck city hall and Munich's F�rst Wrede barracks. The latter is the German government's first security- related PPP building project. HOCHTIEF PPP Solutions reached financial close on the project in March 2008. Together with its British team, the company is bidding for contracts under the UK Building Schools for the Future investment program and is making headway in the fastgrowing Greek PPP building market, where it is already involved in several bids for education, administration and security infrastructure projects.

In the renewable energy segment, HOCHTIEF PPP Solutions successfully finished drilling work in 2008 on its first geothermal power plant at D�rrnhaar in Bavaria. With the participation of a drilling team from HOCHTIEF Construction, the first phase of drilling was completed for a second plant in nearby Kirchstockach. These are the first two power plants in a series that the company and its partners are building in the southern German part of the Molasse basin.

Portfolio valuation

We value the assets of HOCHTIEF AirPort and HOCHTIEF PPP Solutions using the discounted cash flow (DCF) method.

In DCF-based valuation, we determine the cash flow between project companies and HOCHTIEF – capital paid in and withdrawn, dividends, interest and fees – and discount the future cash flows by applying a risk-adjusted discount rate. Only projects that have reached financial close are included in the valuation.

For airport holdings, HOCHTIEF applies a discount rate of 13 percent. The placement price obtained on establishment of the investment partnership in 2005 showed this to be in line with market rates.

Typical value curve for a concessions project

The net present value (NPV) established by HOCHTIEF Concessions was calculated as of December 31, 2008 on the basis of various future-looking assumptions, among others with regard to the operative and financial development of individual subsidiaries/associates as well as with regard to the applied discounting rates. In the event these assumptions change or do not materialize, this may lead to a deviation – possibly even on a significant scale – of the actual value from the value shown here.