Ferrovial receives the concession for the H407 Highway in Toronto, Canada
Ferrovial, as part of a consortium, has been awarded the concession of the H407 Highway in Toronto, Canada. The contract will be managed through Cintra, a Grupo Ferrovial company specialising in transport infrastructure bidding and management, from highways to parking lots, airports, ports, etc. The project, the largest tender for a concession in the world in the last ten years, represents an approximate investment of 400,000 million pesetas and a concession period of 99 years.
The contract includes the management of a 69 km section of pre-existing highway, the H407 Central through the acquisition of shares of the company holding the concession as well as the design, construction, maintenance, and operation of two other highway sections (the West 24 km and the East Partial 15 km) for a total of 108 km.
The section of the highway already in operation, the H407 Central, is 69 km long and forms part of Torontos second beltway. The section currently in operation has an average daily intensity (ADI) of around 49,000 vehicles/day, with peak intensities reaching 100,000 vehicles. Without taking into consideration the kilometres covered, the number of users or daily trips reaches an average of 220,000.
The most modern highway in the world
The H407 is the first free access toll highway with completely electronic tolls in use in the world. The toll system is closed, which means that it tracks the vehicle from the moment it enters the highway until it exits, and the toll collection is made according to the length of each trip.
The highway uses a combined vehicle identification system, through "transponders" (readings through an electronic card located in the car) and video (readings from digital photographs of the license plate) and later charges payment to the bank account of the vehicles owner.
Consortium led by Ferrovial
The consortium that was granted the concession of Torontos H407 Highway is made up of Ferrovial (61.29%), which also manages the concession, along with SNC Lavalin (22.58%), one of the largest Canadian engineering firms, and Caisse de Dépôt (16.13%). The name of the consortium is ETR International (Express Toll Route International).
Three other consortiums, formed by the most important companies in the area of transport infrastructure concessions, participated in the invitation to tender, from the CHIC consortium an association of the 4 construction companies that constructed the existing section and which were currently operating it to the consortium formed by the Spanish companies Dragados and FCC along with GTM, and the consortium formed by the Toronto Dominion Bank, Autoestrade, and Transroute, companies that unite the public highway concessions in Italy and France, respectively.
Investment of 400,000 million pesetas
The concession contract for Torontos H407 Highway represents an overall investment of approximately 400,000 million pesetas. Of this amount, approximately 50,000 million pesetas correspond to the creation of 39 additional kilometres that the concessionaire must build.
The scope and calendar planned for the investment, which fixes the payment of approximately 310,000 million pesetas in the next 21 days, has occasioned the creation of a consortium of banks that will provide a syndicated loan to finance 80% of the amount of the purchase and of investments to be made. The bank syndicate is made up of Citibank, Royal Bank of Canada, and the Bank of Montreal.
The long- term financing structure that will re-finance the syndicated loan is being managed by two financial consultants hired by the consortium: Nesbitt Burns (Bank of Montreal Investment Bank) and Salomon, Smith Barney (previously belonging to the firm Salomon Brothers).