Financial close for NZ$1bn road PPP

The Wellington Gateway Partnership consortium will finance, design and construct New Zealand’s Transmission Gully motorway.

The Wellington Gateway Partnership (WGP) consortium has achieved financial close for the delivery of the NZ$1 billion (€630 million; $850 million) Transmission Gully motorway in New Zealand.

The project is availability-based and arises from an agreement between WGP and the New Zealand Transport Agency. WGP includes: Leighton Contractors, the Australian construction firm; HEB Construction, the New Zealand construction firm; Bank of Tokyo-Mitsubishi UFJ (BTMU), the Japanese bank; and the New Zealand Accident Compensation Corporation (ACC), a Crown entity which provides compensation for personal injuries.

InfraRed Capital Partners, the UK fund manager, is providing around NZ$55 million in equity for the project (which is about 40 percent of the total equity) while Leighton Contractors and ACC are also providing equity. BTMU is financial advisor to the project, with funding being provided by unnamed local and international banks.

The consortium – which was named preferred bidder in December last year – will finance, design and construct the project, with work set to start imminently and the project expected to employ up to 700 people at the peak of construction. The consortium will be in charge of operating and maintaining the motorway from 2020 for a period of 25 years.

Transmission Gully is the first state highway in New Zealand to be delivered as a public-private partnership (PPP). The road will run north of Wellington for 27 kilometres, bypassing the existing SH1 coastal route with the aim of improving road safety and improving reliability thanks to high levels of resistance to seismic (earthquake) activity.

WGP says it consulted with multiple stakeholders including Territorial Authorities (the second tier of local government in New Zealand), Regional Council and local Maori population “to ensure that all communities will benefit from the investment”. Final approvals and consents are currently being concluded.