Commercial, financial close on $880m Ontario highway

The Blackbird Infrastructure Group, a 50-50 consortium comprising Ferrovial subsidiary Cintra Infraestructuras International and the Canadian arm of Swiss-based Holcim, has reached commercial and financial close on the second phase of Ontario's Highway 407 East public-private partnership project.

The contract was signed after Infrastructure Ontario and the Ontario Ministry of Transportation selected the consortium as preferred bidder in January.

Cintra and Holcim will be responsible for the project’s development, while Ferrovial Agroman will join Dufferin Construction – a division of Holcim – to design and build the road. The concession will run for 30 years from the end of 2017.

Included in its scope is a 22-kilometre extension of the Highway 407 Phase 1 project – with two lanes in each direction from Harmony Road in Oshwa to Highway 35/115 in Clarington – as well as a 10-kilometre link to Highway 401. Total estimated investment is CAD$880 million ($705 million; €642 million).

The consortium has issued two bonds to cover project costs, including a short-term CAD$264 million bond along with a long-term bond amounting to CAD$108 million which will mature in June 2047. The consortium also structured a CAD$241 million senior revolving construction facility that will mature at the end of construction.

During the 30-year concession, the Ontario government will set the tolls and collect revenue on the roadway. The concession company will be paid on the basis of an availability formula for performing maintenance and lifestyle costs.

Cintra also led the consortium responsible for executing the Highway 407 Phase 1 project, valued at CAD$1 billion, which the company also won through competitive concession three years ago. Cintras currently manages 2,232 kilometres of toll roads via 28 concessions in Canada, the US and Europe.

Portions of the roadway will be open for traffic in 2017, with the remainder scheduled to open in 2020.