The Wellington Gateway Partnership (WGP) today reached financial close on an availability based Public Private Partnership (PPP) with the New Zealand Transport Agency (NZTA) for delivery of the NZ$1 billion Transmission Gully Motorway.

This is the first Public Private Partnership (PPP) for a state highway project in New Zealand.

The Wellington Gateway Partnership will finance, design, construct, operate and maintain the Transmission Gully motorway for the 25 years that will follow the expected five-year period to build the highway. It aims to have the Transmission Gully highway open for traffic by 2020.

WGP is consortium led by Leighton Contractors and including HEB Construction Ltd, InfraRed Capital Partners, Bank of Tokyo-Mitsubishi UFJ (BTMU) and the Accident Compensation Corporation (ACC).

Equity investors in the project are the Leighton Group, contributing 15%, InfraRed and ACC. BTMU is financial advisor with funding provided by local and international banks.

Leighton Contractors has a majority role in the design and build subcontract with JV partner HEB Construction, and will perform 100% of the operations and maintenance subcontract.

Financial close follows WGP's selection as the preferred bidder in December 2013.

The Transmission Gully project's net present cost is NZ$850 million. This is the "whole of life" cost, for WGP to build and then operate the road for 25 years.

This is NZ$25 million less than what the contract would be expected to cost through conventional procurement, and hence meets The Treasury's value for money test for PPPs.

The cash payments will be around $125 million per year, starting only when the project is finished and open for use, and lasting for 25 years.

Leighton Holdings  Executive Chairman and Chief Executive Officer Marcelino Fernández Verdes said:

"This award evidences the strong pipeline of work we are seeing, as governments continue spending on infrastructure, underpinning an increase in PPPs.

"The Leighton Group is committed to assisting governments with solutions for expanding modern sustainable transportation infrastructure and we will seek to take on roles as an equity participant, contractor and asset manager.

"The Transmission Gully PPP project harnesses the resources and expertise of both the New Zealand government and the private sector to efficiently deliver this essential infrastructure."

Leighton Contractors Managing Director David Jurd said:

"The Transmission Gully Motorway will be an enduring asset that enhances Wellington's transport system and generates significant benefits for the community and New Zealand's economy.

"For Leighton Contractors, this is the culmination of 10 years of delivering important infrastructure for New Zealand."

In recent months WGP has consulted with the Greater Wellington Regional Council, territorial authorities and local M?ori, and continues to finalise relevant approvals and consents. At its peak the construction phase will employ approximately 700 people.