News from Wellington Gateway Partnership
The Wellington Gateway Partnership (WGP) and the New Zealand Transport Agency (NZTA) have reached financial close completing contract negotiations and financial arrangements for the NZ$1b Transmission Gully Motorway.
The project is New Zealand’s first state highway to be delivered as a Public Private Partnership (PPP).
Under the PPP arrangement WGP will finance, design and construct the project, and then operate and maintain the Transmission Gully Motorway from 2020 for 25 years.
WGP Chairman Brian Roche said: “The WGP is proud to be delivering the Transmission Gully Motorway. Working with NZTA through the selection and financial close process has been constructive and endorsed WGP’s solution for funding, delivering and operating the motorway, and in providing value for money.”
WGP includes Leighton Contractors Pty Limited, HEB Construction Ltd, InfraRed Capital Partners, Bank of Tokyo-Mitsubishi UFJ (BTMU) and the Accident Compensation Corporation (ACC).
•is the special purpose vehicle manager for WGP,
•has a majority role in the design and construct subcontract with JV partner HEB Construction,
•will perform 100% of the operations and maintenance subcontract.
Equity investors in the project are the Leighton Group, InfraRed and ACC. BTMU is financial advisor with funding provided by local and international banks.
Leighton Contractors Managing Director David Jurd, said: “The Transmission Gully Motorway will be an enduring asset that enhances Wellington’s transport system and generates significant benefits for the community and New Zealand’s economy.”
HEB Construction Chief Executive Derrick Adams, said: “The WGP has integrated local and international experience to successfully address the challenges of constructing 27 kilometres of motorway through steep terrain including 28 bridges.”
InfraRed Head of Australasia Sebastien Pochon, said: “We are looking forward to working with our partners and delivering the project on time and on budget to NZTA. The Transmission Gully Motorway is a high quality project and complements our existing involvement in the PPP market in New Zealand.”
ACC Chief Financial Officer Mark Dossor, said: “This is a strong investment for ACC which will deliver stable, long-term cashflows. The motorway design embeds high standards of safety for commuters and freight movers, and we see a natural alignment between our injury prevention responsibilities and a project that will strengthen the quality of New Zealand’s road network”.
In recent months WGP has consulted with the Greater Wellington Regional Council, territorial authorities and local iwi, and continues to finalise relevant approvals and consents. At its peak the construction phase will employ approximately 700 people.
The Transmission Gully PPP Project includes the financing, design and construction of a 27 km long expressway standard motorway just north of Wellington, with a 25 year operations and maintenance contract. The new motorway will bypass the existing SH1 coastal route, increase road safety and improve network reliability with high levels of seismic resilience. It will also be a catalyst for economic growth in the Wellington region.
Leighton Contractors, a wholly-owned subsidiary of Leighton Holdings Limited, is one of Australia’s leading contracting and project development groups, with over $13 billion work in hand and employing more than 14,000 people across Australia, New Zealand, Papua New Guinea and Africa. The company delivers projects for clients across the infrastructure, telecommunications, civil construction, industrial, energy, health and services sectors.
HEB Construction Ltd (HEB)
HEB Construction is one of the largest and most successful privately-owned civil construction companies in New Zealand, currently employing more than 700 people nationwide. Founded more than 35 years ago, HEB brings a range of essential services to the Transmission Gully project such as structures, roading, drainage, landscaping, temporary traffic management, surfacing and precast concrete element capability. HEB’s current roading projects include Wellington’s Memorial Park Alliance, the Waikato Expressway – Cambridge Section, Tauranga Eastern Link JV, and Auckland’s Greville Road Interchange.
InfraRed Capital Partners
InfraRed Capital Partners Limited is a leading global investment manager focused on infrastructure and real estate, creating real value for its investors, project partners, communities and end users. It manages US$7 billion of equity capital in specialist funds that invest into infrastructure and real estate assets which InfraRed develops and operates across the globe. It has invested in over 50 development project with capital expenditure of c. US$25bn. Its 100 staff are deployed across offices in London, Hong Kong, New York, Paris and Sydney.
The Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU)
BTMU is Japan’s largest bank and one of the world’s largest, with offices throughout Japan and in 40 other countries. BTMU is co-Sponsor and Financial Advisor within the WGP team. The group has been in New Zealand since 1972 and is one of the global leaders in project financing.
Accident Compensation Corporation (ACC)
ACC provides comprehensive, no fault personal injury cover for all New Zealanders and visitors. In providing this role ACC maintains one of NZ’s largest investment funds in order to cover the full future costs of all accepted claims. ACC is an equity and debt partner in Wellington Gateway Partnership. Its interests are fully aligned with WGP in ensuring that the new highway will be built on time and to the highest quality and standard of safety.
News release from Bank of New Zealand
BNZ announced today that it has funded New Zealand’s third and most significant public private partnership (PPP) to date. The 27 kilometre, four lane Transmission Gully motorway from MacKays to Linden was highlighted as a road of national significance by the government. The funding will ensure the key piece of public infrastructure will progress with the highway expected to be open for traffic in 2020.
As lead bank to successful bidder, Wellington Gateway Partnership, BNZ has provided 20% of the senior bank debt facility which will be used to construct the motorway. The long-awaited Transmission Gully motorway will be built by Leightons Contractors Pty Limited and HEB Construction Limited, and will be operated by Leightons.
BNZ head of Institutional Banking, Paul Blair says the funding is a landmark transaction for PPPs in New Zealand.
“Well-executed public private partnerships can ensure that large pieces of national infrastructure can be delivered.
“We believe the successful execution of the Transmission Gully project will pave the way to the development of other much-needed public infrastructure which will create jobs, connect cities with ports and production hubs and drive New Zealand’s economic growth.”
BNZ’s involvement in the project continues the bank’s market-leading position financing PPPs. The bank now funds two of the three major PPP’s currently executed in New Zealand.
“We expect our leading capability in infrastructure funding and project finance will be vital for New Zealand as the government sector balances the development of infrastructure critical to growth with the enormous requirements of the Christchurch rebuild, building strengthening in Wellington, and investing in Auckland,” says Mr Blair.