TfL provisionally selects PB for Silvertown PPP

21 May 2019 - 12:00 am UTC

A consortium including Ferrovial’s subsidiary Cintra and Macquarie Capital has been provisionally selected as preferred bidder for the Silvertown Tunnel, the UK’s largest PPP currently in procurement, sources said.

The GBP 1bn project’s procuring authority, Transport for London (TfL), was expected to formally notify the PPP’s two bidders on Monday (20 May) but still had not done so by press time on Tuesday evening.

But sources close to the project said that the Ferrovial-led consortium – which also comprises Aberdeen Standard Investments, BAM PPP PGGM and South Korea’s SK Group – has been provisionally selected as the preferred bidder. The competing team comprises Hochtief, Iridium and John Laing.

Ferrovial, Macquarie and Aberdeen declined to comment.

TfL is expected to formally let the two bidders know about its intentions later this week or early next week, sources said.

The preferred bidder will have until August to reach financial close, according to TfL’s latest documents, which also indicate that the opening date of the tunnel has been pushed back to 2025 from 2024.

A banking source said that although lenders have provided firm commitments to the two bidders as part of the best and final offers, a final round of negotiations will begin after the official preferred bidder announcement.

The Ferrovial-led consortium is planning to use South Korean debt from Korea Development Bank and institutional investor Samsung Life Insurance as part of its funding solution. The Hochtief/John Laing consortium is working with Assured Guaranty on wrapping part of the debt, sources said.

TfL will charge users of the Silvertown and neighbouring Blackwall tunnels in southeast London, and use this toll income to pay the private partner.

The preferred bidder will be responsible for the design, building, financing and maintenance of the new tunnel under the River Thames for 25 years.

Hochtief last week failed to make the shortlist of the EUR 500m A49 PPP in Germany.

 

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