The North East Link PPP is the largest package in the North East Link Program, the largest transportation project in Victoria to date. It completes the Melbourne ring road that connects the Metropolitan Ring Road (M80) and the Eastern Freeway (M3).
The PPP component comprises two three-lane tunnels with a length of around six and a half kilometers, associated tunnel systems, intelligent transport systems, toll infrastructure and associated infrastructure.
In a climate of changing risk appetite in the marketplace, the ITC Incentivized Target Cost (PPP) model has long been challenged as one that could offer a more balanced approach to risk allocation. This is the first model of its kind to be launched and successfully purchased. The transaction also features a breakthrough funding structure that incorporates elements of bank and institutional debt in a truly global financier group.
Herbert Smith Freehill’s project finance partner Miles Wadley, along with project partner Erin Wyeth, led a multidisciplinary team on the transaction. The Herbert Smith Freehills team was rounded off by senior associates Nadine Kilpatrick and Joseph Varghese, supported by senior associates Jennifer Brightling and Tessa Spence and lawyers Luke Kavanagh, Jana Mavroidakos and Andrew Evans.
Miles Wadley said, “The North East Link PPP is a market changing transaction. The bankability of an ITC-PPP model has long been assumed, but has never been realized until now. We pride ourselves on being at the forefront of shaping the market in this way. We know of other projects in the pipeline that will follow suit.
“We congratulate the Spark Consortium, including Capella Capital, John Laing, WeBuild, GS Engineering and Construction, CPB Contractors, China Construction Oceania, Ventia, DIF and Pacific Partnerships and their financiers, on another transformation transaction.”
This deal is yet another example of Herbert Smith Freehills’ market leading work in the infrastructure and transportation sectors.