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ACCIONA awarded second highway contract in Canada, worth €575m

04/12/2010

ACCIONA will build and operate the expressway and act as concessionaire for a period of more than 30 years.

ACCIONA will build and operate the expressway and act as concessionaire for a period of more than 30 years.

ACCIONA has been selected by Canada's Alberta Transportation (transport ministry) to design, build, operate and maintain the Southeast Stoney Trail, a key road link in the Calgary Transportation Plan. The contract has been awarded to the concession company Chinook Roads Partnership, a 50/50 joint venture between ACCIONA and local partner SNC-Lavalin Inc.

The current net value of the total public investment comes to CAD764 million (around €575m) and the total length of the concession comes to 33.5 years -three-and-a-half years for design and construction and thirty years for operation, maintenance and refurbishment. The Trail is the fourth P3 (Public-Private financing) highway contract awarded in Alberta Province. This stretch of highway is part of the Calgary Ring Road project, which is set to become the Province's biggest-ever road infrastructure investment.

The project comprises 25km of toll-free highway, with three lanes in each direction. Construction includes nine junctions, one road- and two rail overpasses and a total 27 structures. Construction will be carried out by ACCIONA Infrastructures Canada (50%) and SNC Lavalin Constructors (Pacific) Inc. (50%).

Operation, maintenance and refurbishment activities will run for 30 years after the highway comes into service and will be carried out by the Canadian subsidiaries of both groups: ACCIONA and SNC-Lavalin Inc. The contract includes O&M, from the start of the contract, of an existing 12km stretch of highway known as the Deerfoot Trail, and which will run alongside the new project.

Public-Private Financing

Financing for the project will come through a combination of public and private funds. Total public funding comes to CAD765 million at net current value. During the construction phase, the authorities will provide CAD332 million: CAD232 million from Alberta's provincial government and CAD100 million from the British Colombia federal government. During the 30-year O&M period, the authorities will pay the consortium a monthly canon for availability.

With regard to private funding, the ACCIONA-SNC consortium has successfully launched a private bond emission, rated "A" by Standard and Poors.

The Alberta Government explains that thanks to this Public-Private Partnership, the highway will take two years less to build than if it were undertaken as a conventional project and will offer families, workers and businesses improved road safety and smoother traffic. It will also create thousands of jobs during the construction phase.

Leading the way in infrastructure

This successful operation represents the North American infrastructure market's first bond emission and is a milestone for the Spanish company. With this project, ACCIONA consolidates its position as a leading player in the Canadian infrastructure market, with four PPP projects in the country, in line with the Company's Strategic Plan.

Two years ago, the Quebec Transport Ministry awarded ACCIONA the contract for the A-30 Châteauguay-Vaudreil-Dorion highway, a major road link between Québec and Montreal. The concessionaire, Nouvelle Autoroute 30, is a 50/50 joint venture between ACCIONA and Iridium and construction will be carried out jointly by ACCIONA Infrastructure (42 %), Dragados (42 %) and DJL (16 %). The road will be built at a cost of CAD1,500 (around €1,000m) and the concession will run for 34 years.

Similarly, in July of last year ACCIONA Infrastructure won a contract for the construction and operation of the Fort St. John Hospital, in British Columbia. The CAD270 million (approximately €170m) project comprises the construction and the design of the centre and its operation and maintenance throughout the entire period of the concession. ACCIONA also took the contract for the CAD300 million (around €190m) Royal Jubilee Hospital, in Victoria (BC), making ACCIONA the first Spanish company to win a PPP deal in Canada.

ACCIONA's current strong position in Canada and its positive outlook for future growth makes the country a key market in the Company's drive for international expansion. The Canadian concessions and infrastructures market holds considerable promise owing thanks to a favorable legal framework and a large number of major projects slated for the future.

Last year Robert Park was appointed ACCIONA country manager in Canada. Park is an engineer with more than 30 years' experience in large-scale infrastructure projects, international JV operations, private finance, design and construction, airports, railways, highways, petrochemicals and water treatment services. He has spent the past seven years at ACCIONA Infrastructure, where he has gleaned extensive experience in PPP projects in Hong Kong.

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