Transport Scotland, Scotland’s national transport agency, has awarded a £320 million (€355 million; $470 million) project to design, build, finance and operate a section of the country’s M80 motorway north of Glasgow.
Highways Management Scotland, the winning concessionaire, is a consortium comprising construction companies Bilfinger Berger and John Graham as well as construction materials provider Northstone.
Bilfinger holds an 83 percent stake in the concessionaire, with the remaining 17 percent held by the other two partners. Bilfinger said in a statement that its equity commitment totals €44 million.
Debt financing was provided by the European Investment Bank (EIB) and a syndicate comprised of Barclays, KfW Bankengruppe, National Australia Bank and Sumitomo Mitsui Banking Corporation.
The syndicate provided senior debt margins of 200 basis points on a construction term loan facility and 190 basis points to 210 basis points on an operations term loan facility. The EIB provided a margin of 60 basis points on a construction loan and 25 basis points for an operations loan.
“Whilst the cost of finance is reflective of the change in market conditions over recent months, the underlying commercial deal is materially unchanged, in defiance of received wiscom that traditional public-private partnership structures, including long-tenor finance, are no longer bankable,“ Richard Threlfall, partner at KPMG who advised Transport Scotland on the deal, said in a statment.
Construction on the 11-kilometre motorway will begin immediately. It is expected to last 2.5 years and will be followed by a 30-year operating period.