Cintra, Polish government ink €2.1bn toll road concession

The agreement is suspended until Cintra and its consortium partners arrange full financing for the project. The consortium also has 12 months to present adjustments to capital costs, traffic projections and other terms impacted by the economic environment.

Spanish toll road and parking garage operator Cintra has signed a concession agreement with the Polish government to build, finance and operate three sections of Poland’s A1 toll road between the cities of Strykow and Pyrzowice.

The 180-kilometre road will require a total investment of approximately €2.1 billion, €1.8 billion of which will cover construction costs. It will also be Cintra’s first toll road project in Poland, bringing its total toll road portfolio to 24 roads across eight countries.

The project is structured as a public-private partnership with a 35-year concession period from the time of the signing of the concession agreement. However, the signed agreement contains a clause suspending it until Cintra’s consortium, Autostrada Poludnie (Polish for “Highway South”), can arrange full financing for the investment, Budimex, Cintra’s local partner for the project, said in a statement.

Autostrada Poludnie will also have 12 months to propose adjustments to the capital costs, traffic projections and other terms that have been impacted due to the current economic and financial crisis conditions, Cintra said in a statement.

If the revised terms are acceptable to both the concessionaire and the government, the deal will reach financial closure. If agreement is not reached, Autostrada Poludnie will recover the costs incurred in design and construction.

Autostrada Poludnie is 90 percent owned by Cintra, 5.05 percent owned by Budimex and 4.95 percent owned by Ferrovial Agroman. Budimex and Ferrovial Agroman will design and build the road.

The sections of A1 covered under the contract include 38.5 kilometers of new toll road between Stryków and Tuszyn, 83.6 kilometers between Tuszyn and Rzasawa, which is a pre-existing road that the government will transfer for upgrading to motorway standards, and 57.9 kilometers of new road between Rzasawa and Pyrzowice in the south of the country.

Poland's toll roads: under development
Source: Fotosik

With the A1 project, Cintra will manage a total of 24 toll roads: seven in Spain, five in Chile, three in Portugal, three in the US, two in Greece, two in Ireland, one in Poland and one in Canada.

The Madrid Stock Exchange-listed company also manages car parks – a business which it is reportedly seeking to sell and has selected mid-February as the deadline for non-binding offers, according to Reuters.

Cintra valued its car park business, which in 2007 earned €143.6 million in net sales, at €466 million in June 2008 and has been seeking a buyer at least since November, Reuters reported, citing sources involved in the sale.