Hochtief, Meridiam seal $1.1bn Presidio PPP

A consortium led by Hochtief PPP Solutions and Meridiam Infrastructure has reached financial close on a 30-year contract to design, build, finance, operate and maintain San Francisco’s Presidio Parkway – the first Californian PPP to result from a new statute.

The Californian Department of Transportation (Caltrans) and San Francisco County Transportation Authority have announced financial close on the $1.1 billion Presidio Parkway public-private partnership (PPP).

The deal is the first transportation PPP in California under its recently enacted statute, Streets and Highways Code section 143, and only the third highway project in the state to have an availability payment structure.

Caltrans has entered an agreement with the Golden Link Concessionaire – a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America – to design, build, finance, operate and maintain the Presidio Parkway for 30 years. Funding for the project includes a combination of equity, bank debt and Transportation Infrastructure Finance and Innovation Act (TIFIA) loans.

The Presidio Parkway replaces Doyle Drive, which is the southern access point to the Golden Gate Bridge, travelling through the Presidio of San Francisco (a recreation area) and the Golden Gate National Recreation Area. The project includes seismic upgrades, two sets of short tunnels, a wide landscaped median, enhanced pedestrian accommodation and improved traffic transitions into city streets.

Financial close marks the project’s official victory over a legal challenge at the Alameda County Superior Court, 1st District Court of Appeal and California Supreme Court,  where its opponents tried to stop the project going ahead as a PPP. The litigation ended in November last year, allowing the project to proceed to financial close.

Caltrans was advised by law firm Nossaman on procurement, financing and contracts for the project.

“This project proves that California can make needed transportation improvements using P3s [PPPs] and demonstrates the true value of a P3 delivery method,” said Geoffrey Yarema, chair of Nossaman’s infrastructure practice group, in a statement.