The Aberdeen Roads consortium (known previously as Connect Roads) has announced financial close on the £550 million (€695 million; $865 million) Aberdeen Western Peripheral Route / Balmedie-Tipperty road project.
The consortium – comprising UK developers Balfour Beatty, Carillion and Galliford Try – was selected as preferred bidder in June for the design, build, finance and operate (DBFO) contract to deliver the project for Transport Scotland in partnership with Aberdeen City and Aberdeenshire Councils.
The three developers are all investing up to £20 million, representing one-third each of the sponsors’ investment requirement. The project is being procured under the Scottish government’s Non-Profit Distributing (NPD) model – which caps private sector returns – and is expected to be completed ahead of schedule in winter 2017.
The debt financing includes a combination of privately placed bonds, commercial bank debt and European Union lending.
Allianz Global Investors (AllianzGI) is putting £200 million into the project on behalf of its infrastructure debt platform clients. Listed project bonds were privately placed by AllianzGI with domestic and international investors including The Anglian Water Group Pension Scheme.
The project is the first ‘new-build’ investment made by AllianzGI’s UK Infrastructure Debt Fund, which launched in June this year. The London Borough of Haringey Pension Fund and Nippon Life, the Japanese insurer, have invested in the Scottish road through their commitments to the fund.
The project comprises: the design and construction of 58 kilometres (km) of new dual carriageway; the construction of 40km of new side roads; 30km of new access tracks; and more than 100 new structures including two bridges over the rivers Dee and Don.
Construction will be conducted by the UK construction businesses of Balfour Beatty, Carillion and Galliford Try in an equal joint venture. Once construction is complete, the trunk road assets will be managed and maintained by Aberdeen Roads Limited for 30 years.