Ferrovial, SNC-Lavalin bag C$1bn 407 East contract

A public-private partnership (PPP) to add an extension to the 407 Express Toll Route (407 ETR) reached financial close with a consortium teaming Ferrovial subsidiary Cintra with SNC-Lavalin Group for a C$1 billion ($980 million; €780 million) contract.

Ferrovial characterised its latest mandate as a design, build, finance and maintain (DBFM) agreement in a press statement the Madrid, Spain-headquartered company released Wednesday. The consortium had been named preferred bidder in March.

The planned extension has been dubbed the 407 ETR East project. Phase one of the project will involve a 22-kilometre stretch east from Brock Road in Pickering, Ontario to Harmony Road in Oshawa, Ontario, as well as a 10-kilometre north-south highway, east of Lake Ridge Road, connecting 407 ETR East to Highway 401.

The PPP is a 30-year concession and will provide a “seamless connection,” Ferrovial said. The government of Ontario in 2010 decided to extend 407 ETR.

Cintra, Intoll, fully owned by the Canada Pension Plan Investment Board, and SNC-Lavalin operate the 407 ETR. The trio paid $3.1 billion for a 99-year concession in 1999. The highway was the first electronically tolled road in the world.

Aside from the 407 East Development Group, Infrastructure Ontario (IO), the “crown corporation” of the government of Ontario, also shortlisted 407 Green Link Partners and 407 East Development Partners.

Consortium 407 Green Link Partners teamed Macquarie Group, Bilfinger Berger, AECON Group, Fengate Capital Management and Kiewit Corporation, while 407 East Development Partners included Borealis Infrastructure, Global Via Infraestructuras and OHL Concesiones.