Finland tenders €650m road concession

The 53km road in the south of Finland is part of European Road 18 and will require capex of €285m. Part of the concession, which will last for 15 to 25 years, will require greenfield construction with the contract to be backed by government availability payments.

Roughly two months after Finland launched its debut rail public-private partnership (PPP), the Scandinavian country has now released a tender for a 53-kilometre road concession.

The road, which is set to be built between 2011 and 2014, will connect Koskenkylä and Kotka, to the south of Finland, and is part of European Road 18, a network of roads connecting the UK to Russia. It will require capex of €285 million to construct some 37 kilometres of greenfield road and widen and refurbish 17 kilometres of existing roads.

The length of the concession contract is set to be fixed at between 15 to 25 years, according to the tender documents. It will be backed by availability payments – public contributions paid in exchange for having the asset available in good condition.

Presentation documents from a recent roadshow state the European Investment Bank will provide the majority of the project’s debt, with the Nordic Investment Bank and commercial banks to provide the remainder, split about equally.

Interested parties are expected to submit their initial qualifications by October 11 with the procuring authority set to issue requests to participate to selected candidates on November 15.