Subsidiaries of German infrastructure developer Hochtief and Austrian infrastructure group Strabag have won a 30-year concession to upgrade, finance, operate and maintain 58 kilometres of highways in southern Germany.
One more road
Hochtief said the two companies will receive “start-up” financing from the government, and will also recover their investment through truck tolls.
The stretch of federal highway, known as the A8, connects the cities of Ulm and Augsburg in southern Germany. The contract also includes widening about 40 kilometres of the road from four to six lanes.
Financial close is expected in the second quarter. Hochtief says the consortium aims to start work in summer 2011 and complete construction within four years.
Both Strabag and Hochtief have previously invested in Germany’s road sector. Hochtief is already operating a 45-kilometre section of the A4 between the Hessian-Thuringian state border and Gotha, while Strabag is upgrading and operating a 60-kilometer section of the A5 in Baden-Württemberg, according to Hochtief’s statement.
Strabag is also part of the consortium that reached financial close for the €1.5 billion A15 highway contract in the Netherlands, and recently won the bid for a €106 million highway improvement project in Romania.
Hochtief’s chief executive, Herbert Lütkestratkötter, stepped down earlier this month. He is expected to be replaced by Frank Stieler, head of Hochtief’s European operations.
The company has also attracted much attention due to the potential takeover by Spanish infrastructure developer ACS. ACS now owns more than 40 percent of Hochtief’s shares, and aims to have majority control of the company by next month. ACS' ultimate goal is to increase its shareholding in Hochtief to just above 50 percent, which will allow it to consolidate Hochtief on to its balance sheet and cut debt.