Hochtief Concessions enters North American PPP market

Hochtief Concessions, the public-private partnership (PPP) investment unit of German construction conglomerate Hochtief, has won its first deal in North America.

The company was awarded a contract to design, finance, build and maintain over 30 years ten schools in Canada’s Alberta province. Build to Learn, the 50 percent Hochtief-owned bidding partnership for the schools, had the lowest bid price for the project at C$253 million (€189 million; $253 million), Alberta government said in a statement announcing the award.

“With the ten schools in Alberta, we managed to enter the North American PPP market,” Dr. Herbert Lutkestratkotter, chairman of the executive board of Hochtief, said in a statement.

Hotchtief concession was already a big investor in school PPP projects in Europe, where it is responsible for 102 schools totaling more than 70,000 students in Germany, the UK, Ireland and now Canada.

Construction for the Alberta schools will take 27 months. Five of them will be located in Calgary, the province’s largest city, three in Edmonton, and the rest in the cities of Okotoks and Langdon.
The Alberta government the PPP will save taxpayers C$105 million over conventional delivery of just asking a contractor to design and build the schools. That alternative would have cost C$358 million.

The PPP marks the second phase of the Alberta Schools Alternative Procurement project. The first phase, announced in June of  2007, will result in Alberta’s first 18 PPP-delivered schools opening to Edmonton and Calgary students this fall, the province said.

International Public Partnerships, the London-listed PPP investment fund that spun out of Babcock & Brown last year, won the phase one, C$634 million contract in September 2008.