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Westlink M7, a consortium comprising Canada Pension Plan Investment Board (CPPIB), Transurban Group and Queensland Investment Corporation (QIC), has achieved financial close on the NorthConnex PPP project in Sydney, NSW.
The tolled tunnel motorway will connect the southern end of the M1 Pacific highway at Wahroonga to the Hills M2 motorway at the Pennant Hills road interchange, reducing freight traffic congestion on an existing arterial road and improving traffic flow. Spanning 9 km, this will be the longest road tunnel project in Australia.The total project investment is estimated at A$2.9 billion (US$2.24 billion).
The project will be funded by the consortium partners and by the New South Wales and Australian Governments. CPPIB will invest A$525 million in the project, which represents a 25% ownership interest. Transurban will own 50% of the project while QIC will own the remaining 25%. The Combined Federal and NSW Government contribution will be A$800 million.Construction of the tunnel will begin in early 2015 and is expected to be completed in 2019. The concession contract will run from 2015 to 2048.Cressida Hogg, Managing Director, Head of Infrastructure, CPPIB, stated:
Transurban Chief Executive Officer, Scott Charlton, said;
"We are excited to be part of this important motorway development project which is in line with our strategy to invest in attractive global infrastructure opportunities. The NorthConnex tunnel will create a vital link in Sydney that will play a significant role in alleviating traffic congestion. We look forward to working together with an experienced toll road operator in Transurban and a well-aligned, long-term investor in QIC."
We have recently reported about several transport PPP projects in Australia:
"The NorthConnex project is a prime example of how the public and private sectors can work together collaboratively to deliver major transport infrastructure. This project has been accelerated by a decade, delivering clear benefits to the residents of Sydney well in advance of the timelines previously estimated for this project. When completed, NorthConnex will take up to 5,000 trucks a day."
"The NorthConnex tunnel will be flatter, wider and higher than other similar tunnels in Sydney thereby minimising incidents in the tunnel and improving air quality generally. Trucks using the NorthConnex tunnel instead of the current route of Pennant Hills Road will produce 80% fewer emissions as a result of the design, lack of congestion and the elimination of stop-starting at traffic lights."