Favourite named for $1bn Highway 407 project

A consortium pairing Ferrovial company Cintra with SNC-Lavalin is the preferred bidder to add an extension to Highway 407 in Canada. A contract should be finalised in the first quarter.

A preferred bidder for a $1 billion contract to design, build, finance and maintain a 50-mile extension of the 407 Express Toll Route (ETR) in Ontario has been made official.

Infrastructure Ontario (IO) selected 407 East Development Group, a consortium teaming Madrid, Spain-headquartered Cintra Infrastructueras with SNC-Lavalin Group and toll road operator Intoll Group, for a public-private partnership (PPP) from a shortlist approved in November.

IO and the Ministry of Transportation plan to finalise a contract with the consortium in the first quarter. IO spokeswoman Paulette den Elzen told Infrastructure Investor that she expected a commercial and financial close to conclude in the spring.

IO, a “crown corporation,” or federal or provincial government-managed entity, said the cost of the project would be revealed when the contract is wrapped up. Cintra indicated compensation would come via an availability payment structure, adding the contract would entail a 30-year concession.

Phase one of the project will extend Highway 407 east from Brock Road in Pickering to Harmony Road in Ottawa, linking Highway 407 to Highway 401, with construction anticipated to reach completion by 2015.

Cintra, SNC-Lavalin and Intoll, formerly Macquarie Infrastructure Group, won a 99-year concession for the original 1999-vintage Highway 407 PPP with a $3.1 billion offer. Cintra is a 42.3 percent owner of the road, with publicly-traded engineering concern SNC-Lavalin owning 16.77 percent and Intoll a 30 percent stake.

The highway is widely recognised as the first-ever electronic toll system in the world.

According to Cintra, Montreal-based SNC-Lavalin will share construction work with Ferrovial Agroman.