PPP

DIF, John Laing team reaches financial close on Australia’s largest PPP

The Spark consortium has been awarded the A$11.1bn contract to build, operate and maintain the North East Link project.

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A consortium including DIF Capital Partners and John Laing has reached financial close on the A$11.1 billion ($8.33 billion; €7.21 billion) North East Link project in Melbourne, Australia.

The deal is the largest public-private partnership in Australia’s history. It has been agreed between the Victorian state government and the Spark consortium – which also comprises Capella Capital, Pacific Partnerships, CPB Contractors, GS Engineering & Construction, WeBuild, China Construction Oceania and Ventia. The consortium will build, operate and maintain the tunnels over a 25-year period.

The North East Link project will be the state’s longest twin road tunnel, at roughly 6.5km in length. It will have three lanes, and is designed to close the missing link in Melbourne’s freeway network to improve connectivity between the north and south-east of the city.

The project is expected to complete by 2028, with up to 135,000 vehicles predicted to use the North East Link each day. The tunnels are also expected to reduce travel times by up to 35 minutes, remove 15,000 trucks from local roads each day and create more than 10,000 jobs.

In a statement, John Laing chief executive Ben Loomes said: “The North East Link project […] will improve traffic and travel times, while growing industry and the economy. Together with our consortium partners, we are delighted to be partnering with the Victorian government in delivering this transformative piece of infrastructure.”

In a separate statement, DIF partner Gijs Voskuyl said: “The North East Link project will not only create thousands of local community jobs, it will also reduce congestion and remove significant freight transport from the existing suburban roads, and thereby significantly improving the liveability of the surrounding communities.”

Tender documents for the North East Link PPP were first issued by Victoria’s Labor government in November 2018. Procured as an availability PPP, the opportunity was estimated at the time to be worth approximately A$7 billion to $A9 billion, with a total budget of A$15.8 billion.