A consortium of Macquarie Capital, FCC and Bilfinger Project Investments has been named preferred bidder for one of the UK’s remaining large-scale Private Finance Initiative (PFI) projects – the £2 billion (€2.3 billion; $3.1 billion) Mersey Gateway bridge.
The frontrunner beat competition from consortia comprising Balfour Beatty, Bouygues and Egis as well as Galliford Try Investments, Hochtief and Iridium.
Procuring authority Halton Borough Council and the consortium announced in a press conference today that they have “jointly identified savings amounting to ‘tens of millions of pounds’ on the public sector contribution to the £2 billion project budget”. Commercial and financial close is earmarked for later this year.
The project – which has a construction cost of £600 million – will see the private partner design, build, finance and operate a new six-lane toll bridge over the River Mersey. The new bridge will be located 1.5 miles from the existing Silver Jubilee Bridge, which will also be tolled as part of the 30-year contract. Lifecycle costs for the project had previously been estimated at £40 million, with operations and maintenance costs running at circa £12 million a year.
The Department for Transport – which had agreed to fund the project to the tune of £470 million if the council could reduce its cost – will share in any financial savings achieved by the project via a 70/30 split between the government and Halton Borough Council. The latter said it will be “ploughing” any savings back into the project, to boost its financial resilience and ease tolling for local residents.
Even though the project involves tolling, the concessionaire will be remunerated via availability payments – public contributions paid in exchange for making the bridge available in good condition.