The Rideau Transit Group (RTG), of which ACS Infrastructure Canada is a partner, has successfully reached commercial and financial close for the 35-year contract with the City of Ottawa to design, build, finance and maintain the OttawaÂ’s new Confederation Line and the widening of the Highway 417 in Ottawa, Ontario, Canada.
The Confederation Line, the most significant infrastructure investment in the City of OttawaÂ’s history, will provide rapid and high quality transit service, and it is the first of a network of Light Rail Transit (LRT) lines that will replace the existing Bus Rapid Transit (BRT) network of dedicated bus lanes. The new 12.5-km 13-station LRT system includes a 2.5km long tunnel and 3 underground stations. Rideau Transit Group will also supply and maintain the initial fleet of 34 vehicles, supplied by Alstom Transportation, that will be used by the City of Ottawa to operate the system. Finally, the contract also includes the build and finance of the widening of Highway 417 in the vicinity of the Confederation Line Project.The design and construction works will be undertaken by a joint venture of construction companies of which Dragados Canada, the Canadian construction subsidiary of the ACS Group, is a significant participant.
The CAN$2B Confederation Line Project includes a 30 maintenance term following the completion of the works.
The project is financed through a combination of public and private financing. The Federal Government of Canada, the Province of Ontario and the City of Ottawa will provide public funds during construction, which will be received by Rideau Transit Group upon completion of designated milestones. The City of Ottawa will also make payments to RTG during the maintenance term in the form of Annual Service Payments, Lifecycle Payments and Volume Payments. The private financing includes a CAN$ 225m long-term fixed price private placement with 5 investors, led by SunLife and underwritten by National Bank. The financing also includes a short-term revolving loan of approximately CAN$ 215 million syndicated by 4 lenders (National, Scotia, BTMU and SMBC), which will be repaid with the Milestone payments during construction and is hedged by interest rate swaps placed with the short-term lenders. The equity will be injected at the end of construction and is guaranteed by letters of credit posted by the equity sponsors.
ACS/Dragados success in the North American P3 market
The successful achievement of commercial and financial close for OttawaÂ’s new Confederation Line further consolidates ACS DragadosÂ’ presence in North America as one of the most active infrastructure developers. ACS Group has been consistently ranked by Public Finance Works as the worldÂ’s number one infrastructure developer since 1994, and since its entry into North America in 2006, has been awarded and closed over 6 major P3 projects worth over $9 billion, including, in addition to the OttawaÂ’s Confederation Line, the A-30 in Montreal (in operation since December 2012), I-595 Express in Florida, the South Fraser Perimeter Road in Vancouver, the Windsor Essex Parkway in Ontario, and the North East Anthony Henday project in Alberta.
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