Mersey Gateway bridge reaches financial close

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Mersey Gateway bridge reaches financial close 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.

Halton Borough Council (North West England) and the Merseylink consortium have reached financial close on the construction of the £450 million Mersey Gateway Project, a new six-lane toll bridge over the River Mersey.

The Merseylink consortium's equity partners are Macquarie Capital Group Limited, Bilfinger Project Investments Europe Limited and FCC Construcción. The joint venture was appointed as preferred bidder for the project in June 2013.

Kier Infrastructure, Samsung C&T Corporation and FCC Construcción S.A. are the three Merseylink construction joint venture (CJV) partners. Construction will commence immediately and the project will be operated and maintained for the next thirty years.

The project is being funded over this 30-year period by a mix of tolls paid by users and the grants from the UK Government. The Council will not make any payments to Merseylink until the road is open and toll revenue plus government grant is available to fund these payments.

To finance this delay in receiving revenue the Merseylink consortium has put in place finance arrangements, which includes making use of the new UK Government IUK Guarantee Scheme to guarantee £260 million of the senior debt required, with the balance of the finance provided by four banks (Lloyds, SMBC, KfW and Crédit Agricole) and the Merseylink sponsors.

Merseylink PLC issued a £260 million 29-year guaranteed bond with HSBC as sole arranger, and Credit Agricole, HSBC and Lloyds Bank as joint bookrunners to place the bonds.

Moody's Investors Service assigned an Aa1 rating with stable outlook to the guaranteed secured bonds.

Halton Borough Council has set up a new company - the Mersey Gateway Crossings Board - which is the special purpose vehicle with the delegated authority to deliver the Mersey Gateway Bridge project and to administer and oversee the construction and maintenance of the new tolled crossings including the tolling of the existing Silver Jubilee Bridge.

The total value of the construction phase of the project, including land, is estimated at £600m. The total project costs/revenues over the next 30 years are estimated at around £2bn.

Project features will include:

  • a 1,000m long cable stay bridge consisting of four spans supported from three towers in the estuary
  • a unique design where the 80m high central tower will be shorter than the two outer towers, which will be 110m (north tower) and 125m (south tower)
  • a total length (including the bridge and approach viaducts) of 2.13km
  • a deck carrying six lanes of traffic (three in each direction) with a speed limit of 60mph
  • up to 30 supporting piers carrying it across the approach viaducts
  • a curved approach at each end of the bridge giving varying views of its unique design and maximising its visual impact

Haydn Mursell, Kier Group Finance Director said:

"The Chancellor in his recent budget statement confirmed the Government's support for Mersey Gateway, recognising the huge economic, social and transport benefits that it will bring to the region.  This is a landmark infrastructure project which Kier and its consortium partners are proud to be involved in.  We have worked closely with Halton Borough Council over recent months to reach this position and we look forward to delivering the project with them over the coming years."

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