MegaProject 426: Ferrovial close financing for 407 highway East 2
- Cintra - Ferrovial
This article is part of a daily series of MegaProjects articles. If you want to know more about PPP projects with a considerable size visit our MegaProjects section. You can receive them by email on a daily basis.
The total project investment is estimated at CAD$880 million (US$703.6 million). The project will be financed trough a CAD$372 million bond issue, which will be launched in two phases, and a CAD$241 million debt package.
Cintra Infraestructuras will develop this project with Holcim Canada Inc. while the design and construction will be undertaken by Ferrovial Agroman and Dufferin Construction Company, a division of Holcim (Canada) Inc.
The Highway 407 East Phase 2 includes a 22-kilometre extension, with 2 lanes in each direction, starting from Highway 407 East at Harmony Road, in Oshawa, to where it will connect with Highway 35/115, in Clarington. The project also includes a new 10-kilometre link to connect with Highway 401.
The 32-kilometre concession, which will be developed on a design, build, finance and maintenance (DBFM) basis, will run for 30 years from the date the first section of the project opens to traffic, expected in late 2017.
The 407 East Phase 2 project will be a toll road, and as is the case for 407 East Phase 1, the Ontario government will set the tolls and retain the revenue, while the concession company will be paid to maintain the highway on the basis of an availability formula.
In 2012, a team composed of Cintra (Ferrovial), SNC Lavalin and Intoll (Macquarie) won the tender process for Highway 407 East Phase 1.
Once complete, Highway 407 East will help ease traffic congestion in the Greater Toronto Area and improve the flow of goods, services and people in the region.
We have recently reported that Windsor Essex Mobility Group (WEMG) was fined more than CAD$100,000 a day for delays on the Windsor-Essex Parkway PPP project in Ontario. WEMG is a partnership between ACS Infrastructure Canada Inc., Acciona Concessions Canada, and Fluor Canada Limited. The Windsor-Essex Parkway is a major CAD$1.4 billion (US$1.1 billion) highway infrastructure.