Vinci/BAM win €210m road contract in Germany

The Franco-Dutch consortium has been awarded a 20-year contract with no traffic risk to widen and refurbish a 46.5km section of Germany’s A9 motorway. Financial close on the availability-based contract is expected over the next couple of months.

East German transport agency DEGES has awarded a contract to design, finance, widen and refurbish a stretch of the A-Modell A9 motorway to a consortium of developers including France’s Vinci, the Netherlands’ BAM PPP and German construction firm Reinhold Meister.

The project calls on the private sector consortium to complete the refurbishment, operation and maintenance of 46.5 kilometres of the A9 highway between the Lederhose interchange and the border between Thuringia and Bavaria, in addition to widening 19 kilometres of the road to a three-lane dual carriageway, Vinci said in a statement. The A9 highway connects Berlin to Munich.

The contract will run over 20 years and is worth €210 million, Vinci stated. BAM added that construction activities will account for about €140 million of the total value. A spokesman from the Dutch firm said the road is expected to reach financial close in the next few months.

The A9 contract is notable for being the first A-Modell project in Germany that will not be exposed to traffic risk, relying instead on availability payments. That means the procurement authority will pay the winning consortium, known as A9SixLanes, a fee over the lifetime of the contract in exchange for the asset being available in good condition.

For Vinci, the A9 represents the third A-Modell contract won by the company in Germany. The first, awarded in 2007, called for construction of a 45-kilometre stretch of the A4 motorway in Thuringia, between the cities of Gotha and Eisenbach. It opened in September 2010. In 2008, Vinci won the contract to build a 60-kilometre portion of the A5 highway between the cities of Offenburg and Karlsruhe, in Baden-Wurttemberg, which is expected to be completed in 2013. German infrastructure firm Hochtief is also a shareholder in the consortia that operate the A4 and A5 motorways.

Earlier in July, Hochtief and Austrian developer Strabag reached financial close on a stretch of the A8 highway, another A-Modell project, connecting the cities of Ulm and Augsburg, to the south of the country. Unlike the A9, however, the 30-year contract for the A8 motorway will see the private partner build and operate the road, recouping its investment via a share of tolls charged to heavy vehicles. The A8 was Strabag’s first German road PPP.

Three banks – BBVA (€62 million), Unicredit (€75.8 million) and regional development bank Landeskreditbank Baden-Wurttemberg-Foerderbank (€11.2 million) together with the European Investment Bank (€149 million) – provided €298 million of debt for the €410 million project, according to Infrastructure Investor Assets, Infrastructure Investor’s companion database. The rest of the financing came in the form of equity and start-up financing from the government.