Redrawing the infrastructure map of Europe

With business slowing down in some of the countries that have seen most of Europe’s infrastructure activity over recent years, a number of other markets seem ready to pick up the baton.

Among these are Spain and Ireland – both still rising from the ashes of the 2008-2009 financial crisis and the individual difficulties that resulted from it – and unlikely candidate Belgium, where although projects are admittedly smaller than across the border in the Netherlands, the pipeline of emerging deals is notably robust.

The Netherlands

First to the good-byes. The Netherlands was for some time the darling of the infrastructure sector, with a slew of massive, largely transport-focused schemes. However, with financial close for the Aflsuitdijk dyke project expected by the end of May (2018), the A16 road PPP to follow in early June, and the Blankenburg tunnel in July, it seems the sun may be setting on the Dutch market.

Of course, a few stragglers may still make it past the finish line. These include the Via15 road project, which connects the port of Rotterdam and inland Europe, A9 road PPP with its unusual 14-year concession casting doubt on the ability of equity providers to secure return over such a short timeframe, and the Michiel Adriaanszoon de Ruyter barracks PPP in Vlissingen – although this project seems to be facing opposition from marines who don’t want to move to Vlissingen, and may even be scrapped.

Beyond that, not much else is likely to happen in the Netherlands over the next few years as the country’s infrastructure now seems to meet its needs, sources say.

Turkey

Meanwhile, another market that had seen some activity over the last couple of years was Turkey with both transport schemes and its behemoth hospitals.

Financing for the €3.1 billion ($3.7 billion) Çanakkale bridge project was signed in March (2018), after the February close for the mirrored financings of the two BOT North Marmara motorway projects. Then April saw the signing of the €330 million Izmir-Menemen-Aliağa-Çandarlı highway project.

Now tenders have been announced for the Aydın-Denizli and Cesmeli-Tasucu roads. However, on the healthcare front, the momentum seems to have dropped with no projects currently on the horizon.

Spain

...which means that attention is shifting to newer or resurgent markets. One of which is Spain, where eight out of nine roads bankrupted by lower-than-expected traffic volumes amid the financial crisis have now been taken back under government control, and a new €5 billion road investment programme is on the brink of being launched.

The roads under state control and the dates of their renationalisation are:

  • R-4 – 21 February (2018)
  • R-2 – 28 February
  • AP36 Ocaña-La Roda – 14 March
  • AP7 Cartagena-Vera – 1 April
  • Alicante Ring Road – 1 April
  • M12 access road to the Barajas Airport – 11 April
  • R-3 – 10 May
  • R-5 – 10 May

The only bankrupt toll road yet to be renationalised is the AP41 Madrid-Toledo, whose concession holder is not yet in liquidation, although this is expected soon.

And the plan is to retender all nine roads this year (2018), in two bundles. The first will include the roads near Madrid – R-2, R-3, R-5, R-4, M-12, AP-41 and AP-36 – and the second will be for the AP-7 and the Alicante ring road.

Meanwhile, Spain’s €5 billion Plan de Inversión Extraordinaria de Carreteras is expected to see projects tendered and awarded by the end of 2019.

A number of companies are thought to be preparing to bid for the projects, including:

  • ACS and DIF
  • Sacyr and Aberdeen Asset Management
  • Acciona and John Laing
  • Ferrovial
  • FCC

The first tender to be launched is expected to be for the Murcia bypass project, for which capex will be €400-500 million.

This is expected to be followed by tenders for projects including:

  • a new road parallel to the A1 in Madrid
  • expansion of the A5
  • completion of the ring road around Seville
  • addition of a third lane to the Autovia Norte road linking Santander and Biscay
  • widening lanes on the road between Burgos and Aguilar de Campoo

The schemes were expected to be availability-based, benefiting from €350 million of yearly availability payments over a 30-year concession period, unlike the bankrupt toll roads. However, there is now talk that an element of traffic risk may be introduced whereby – if traffic is below expectations – the state pays less, which has raised concerns among potential bidders.

Ireland

Another market that seems to be having a resurgence is Ireland, where the 10-year, €115 billion National Development Plan – which was announced in February (2018) – has kicked off with an invitation to prequalification for the €900 million M20 highway connecting Cork to Limerick – a project that has been under discussion for years and will replace a road with some of the country’s worst accident statistics.

This is expected to be followed by the following schemes:

  • upgrading the N4 between Collooney and Castlebaldwin in Co Sligo
  • widening the M7 between Naas and Newbridge
  • upgrading the N8/N25 Dunkettle interchange
  • upgrading the N28 Cork to Ringaskiddy Road
  • upgrading the N21/N69 Limerick to Adare and then Foynes
  • upgrading the N22 from Ballyvourney to Macroom
  • upgrading the M11 Gorey to Enniscorthy
  • upgrading the N5 Ballaghaderreen to Scramogue
  • improving the N52 Ardee Bypass

At the same time, social housing projects are in procurement, with prequalification documents recently submitted for the second of three bundles of Ireland’s €300 million social housing PPP programme, and €18 billion is expected to be spent over coming years on the country’s water infrastructure.

Belgium

And picking up the slack in the Benelux region, Belgium seems to have a healthy pipeline of projects.

Under an infrastructure programme launched by Belgian Prime Minister Charles Michel, around €60 billion will be spent by 2030 – with contributions from the private sector – on digital infrastructure, energy, transport, healthcare, defence and justice projects.

For now, procurement processes include the Walloon highway lighting project, where BAFOs are expected this summer (2018), and the Antwerp prison, for which preselection occurred in April (2018), and which is part of a group of nine prisons expected to be built over coming years in the following locations:

  • Leopoldsburg
  • Lantin
  • Vresse-Sur-Semois
  • Verviers

Meanwhile, BAFOs are expected soon on the Liege tram PPP and the troublesome Flanders schools PPP – under which 42 schools, in 13-14 clusters, should come to market over the next two or three years. This will be the revival of a project that back in 2010 struggled to get individual municipalities to sign up to the programme.

At the same time, preselection is underway for the second cluster of Albert Canal bridges, a Flemish tram depot PPP is expected later this year, BAFOs have been submitted for a conference centre PPP in Brussels, and a military hangar PPP project is also in procurement, with first offers due in June (2018).

Much more is expected over coming years, Prime Minister Michel says.

And so it should be. Because with patchy activity elsewhere in Europe, the infrastructure sector really needs everything it can get.

Asset SnapshotAP7 Alicante Ring Road (33.2KM)

Est. Value:
USD 455.00m
Full Details

Asset SnapshotLiege Tram (11.4KM)

Value:
EUR 429.00m (USD 474.88m)
Full Details

Asset SnapshotEbeye Solid Waste Plant

Est. Value:
USD 6.50m
Full Details

Asset SnapshotM11 Gorey-Enniscorthy Motorway (40KM)

Est. Value:
GBP 182.62m (USD 227.99m)
Full Details

Asset SnapshotCartagena-Vera Toll Highway (114KM)

Value:
USD 753.73m
Full Details

Asset SnapshotAccess Road for Madrid-Barajas Airport (27.7KM)

Value:
USD 505.52m
Full Details

Asset SnapshotAntwerp Prison

Est. Value:
EUR 100.00m (USD 110.06m)
Full Details

Asset SnapshotCanakkale Bridge (2KM)

Value:
N/A
Full Details

Asset SnapshotMichiel Adriaanszoon de Ruyter Barracks

Est. Value:
N/A
Full Details

Asset SnapshotAfsluitdijk Dyke

Value:
N/A
Full Details

Asset SnapshotIzmir-Menemen-Aliaga-Candarli Highway (76KM)

Value:
EUR 330.00m (USD 406.86m)
Full Details

Asset SnapshotIrish Social Housing Bundle I

Value:
EUR 120.00m (USD 131.46m)
Full Details

Asset SnapshotA9 Badhoevedorp-Holendrecht Section Expansion (1.3KM)

Value:
EUR 850.00m (USD 941.50m)
Full Details

Asset SnapshotWalloon Smart Lighting

Value:
EUR 376.00m (USD 422.31m)
Full Details

Asset SnapshotIrish Social Housing Bundle II

Value:
EUR 120.00m (USD 132.94m)
Full Details

Asset SnapshotBlessington Social Housing Facility

Est. Value:
N/A
Full Details

Asset SnapshotVia15 Arnhem/Nijmegen Road (35KM)

Est. Value:
EUR 1,200.00m (USD 1,300.97m)
Full Details

Asset SnapshotNorth Marmara Motorway - Kurtkoy-Akyazi Section (169KM)

Value:
TRY 6,854.49m (USD 1,001.32m)
Full Details

Asset SnapshotNorth Marmara Motorway - Kinali-Odayeri Section (88KM)

Value:
TRY 2,700.00m (USD 394.42m)
Full Details

Asset SnapshotMadrid-Toledo Toll Road (71.5KM)

Value:
N/A
Full Details

Asset SnapshotAP36 Ocana-La Roda Toll Road (147KM)

Value:
N/A
Full Details

Asset SnapshotMadrid Radial 2 Toll Road (62KM)

Value:
N/A
Full Details

Asset SnapshotMadrid Radial 3 Toll Road (37KM)

Value:
N/A
Full Details

Asset SnapshotMadrid Radial 4 Toll Road (93KM)

Value:
N/A
Full Details

Asset SnapshotMadrid Radial 5 Toll Road

Value:
N/A
Full Details

Asset SnapshotN4 Collooney-Castlebaldwin Road (34.8KM)

Value:
N/A
Full Details

Asset SnapshotN8/N25 Dunkettle Interchange

Value:
N/A
Full Details

Asset SnapshotN28 Cork-Ringaskiddy Motorway Upgrade (12.5KM)

Value:
N/A
Full Details

Asset SnapshotBelgian Military Hangar

Est. Value:
EUR 49.82m (USD 61.60m)
Full Details

Asset SnapshotM7 Naas - Newbridge Bypass (13.5KM)

Value:
N/A
Full Details

Asset SnapshotN69 Limerick - Tralee Road (60.6KM)

Value:
N/A
Full Details

Asset SnapshotN22 Ballyvourney-Farranfore Road (38.3KM)

Value:
N/A
Full Details

Asset SnapshotN5 Ballaghaderreen - Scramoge Road (33.4KM)

Value:
N/A
Full Details

Asset SnapshotN52 Ardee Bypass (4.73KM)

Est. Value:
EUR 20.00m (USD 24.43m)
Full Details

Transaction SnapshotLiege Tram (11.4KM) PPP

Financial Close:
22/01/2019
Value:
$502.12m USD
Equity:
$47.75m
Debt:
$454.36m
Debt/Equity Ratio:
90:10
Concession Period:
27.00 years
PPP:
Yes
Full Details

Transaction SnapshotAntwerp Prison PPP

Value:
$110.06m USD
Concession Period:
25.00 years
PPP:
Yes
Full Details

Transaction SnapshotNorth Marmara Motorway - Kinali-Odayeri Section (88KM) PPP

Financial Close:
05/02/2018
Value:
$1,485.71m USD
Equity:
$445.71m
Debt:
$1,040.00m
Debt/Equity Ratio:
70:30
Concession Period:
7.75 years
PPP:
Yes
Full Details

Transaction SnapshotNorth Marmara Motorway - Kurtkoy-Akyazi Section (169KM) PPP

Financial Close:
05/02/2018
Value:
$2,674.00m USD
Equity:
$1,040.00m
Debt:
$1,634.00m
Debt/Equity Ratio:
61:39
Concession Period:
6.75 years
PPP:
Yes
Full Details

Transaction SnapshotMichiel Adriaanszoon de Ruyter Barracks PPP

Concession Period:
25.00 years
PPP:
Yes
Full Details

Transaction SnapshotBlankenburg Tunnel (4.2KM) PPP

Financial Close:
18/10/2018
Value:
$1,149.99m USD
Equity:
$115.00m
Debt:
$1,034.99m
Debt/Equity Ratio:
90:10
Concession Period:
20.01 years
PPP:
Yes
Full Details

Transaction SnapshotAfsluitdijk Dyke Redevelopment PPP

Financial Close:
29/05/2018
SPV:
Levvel BV
Value:
$971.03m USD
Equity:
$93.03m
Debt:
$878.00m
Debt/Equity Ratio:
90:10
Concession Period:
25.02 years
PPP:
Yes
Full Details

Transaction SnapshotIrish Social Housing Bundle I PPP

Financial Close:
19/03/2019
SPV:
Comhar Housing
Value:
$154.31m USD
Equity:
$18.15m
Debt:
$136.15m
Debt/Equity Ratio:
88:12
Concession Period:
25.02 years
PPP:
Yes
Full Details

Transaction SnapshotA9 Badhoevedorp-Holendrecht Section Expansion (1.3KM) PPP

Financial Close:
02/12/2019
Value:
$935.67m USD
Equity:
$100.25m
Debt:
$835.42m
Debt/Equity Ratio:
89:11
Concession Period:
14.00 years
PPP:
Yes
Full Details

Transaction SnapshotWalloon Smart Lighting PPP

Financial Close:
13/02/2019
Value:
$426.39m USD
Equity:
$198.45m
Debt:
$227.94m
Debt/Equity Ratio:
53:47
Concession Period:
20.00 years
PPP:
Yes
Full Details

Transaction SnapshotIzmir-Menemen-Aliaga-Candarli Highway (76KM) PPP

Value:
$406.86m USD
Equity:
$0.00m
Debt:
$172.61m
Debt/Equity Ratio:
100:0
Concession Period:
9.83 years
PPP:
Yes
Full Details

Transaction SnapshotMalkara-Canakkale Motorway Section (88KM) PPP

Financial Close:
25/05/2018
SPV:
ÇANAKKALE OTOYOL VE KÖPRÜSÜ İNŞAAT YATIRIM VE İŞLETME A.Ş.
Value:
$3,721.03m USD
Equity:
$1,024.78m
Debt:
$2,696.25m
Debt/Equity Ratio:
72:28
Concession Period:
16.20 years
PPP:
Yes
Full Details

Transaction SnapshotVia15 Arnhem/Nijmegen Road (35KM) PPP

Value:
$1,414.55m USD
Equity:
$6.84m
Concession Period:
25.00 years
PPP:
Yes
Full Details

Transaction SnapshotIrish Social Housing Bundle II PPP

Financial Close:
02/12/2019
SPV:
Torc Housing Partnership
Value:
$149.61m USD
Equity:
$0.00m
Debt:
$149.61m
Debt/Equity Ratio:
100:0
Concession Period:
25.02 years
PPP:
Yes
Full Details

Transaction SnapshotBelgian Military Hangar PPP

Value:
$61.60m USD
PPP:
Yes
Full Details

Transaction SnapshotIrish Social Housing Bundle III PPP

Value:
$149.84m USD
Equity:
$0.00m
Debt:
$149.84m
Debt/Equity Ratio:
100:0
PPP:
Yes
Full Details