BAM and PGGM are preferred bidder for Dutch N33 road-widening project

18 September 2012 15:03 - BAM PPP bv

Bunnik, The Netherlands, 18 September 2012 - Rijkswaterstaat (the Directorate General for Public Works and Water Management) has designated the BAM PPP and pension fund service provider PGGM joint venture as preferred bidder for widening the N33 road between Assen and Zuidbroek. The value of the contract for the design, construction, financing and twenty-year maintenance of the road is approximately €120 million. The work will start in 2013 and be completed in the spring of 2015. Approximately half of the required project budget is contributed by the provinces Groningen and Drenthe and the municipalities Assen, Aa en Hunze, Veendam and Menterwolde.

In order to improve road safety, traffic flow, and the accessibility of the region, a 38-kilometre stretch of the N33 is to be upgraded from a two-way road into a dual carriageway with two lanes in each direction. A traffic interchange creating a link with the A28 motorway will be built at Assen-Zuid, while a clover-shaped junction at Zuidbroek creates an optimal connection for the new road with the A7 motorway. At various locations the connection between the access road network and the N33 will be optimized by the construction of roundabouts. The activities also include the improvement of existing, and the construction of new, wildlife crossings.

The project will be carried out by the BAM ‘Poort van Noord’ joint venture involving BAM PPP, BAM Civiel, BAM Wegen and BAM Infratechniek Mobiliteit, which will set a new standard on the N33 in accordance with the principles of BAM Infra Projectmanagement.

Finance

A special feature of this DBFM contract is the involvement of pension fund service providers. Several operating PPP projects have now been transferred to the innovative and unique joint venture between BAM PPP and PGGM, but the conversion of the N33 marks the first new project to have been secured by the joint venture directly. The joint venture hopes to build on this N33 success and is currently actively bidding on a further ten PPP projects.

Special also is the involvement of pension fund ABP, which is financing seventy percent of the loan capital of the project, for which it receives an inflation-proof fee. This is remarkable for two reasons: it is the first time that a Dutch pension fund has issued loan capital to a Dutch infrastructure project, and it is the first time that the Dutch government has been directly involved with financing that includes an inflation-proof payment. ABP hopes and expects that this successful first step will pave the way to providing similar financing through its investment manager to infrastructure projects in the Netherlands more often in the future.

The commercial banks involved are BTMU, KfW-Ipex and Rabobank. The overall level of required financing amounts to €125 million.

Advisers

During the tender process, KPMG played an important part as the financial adviser, and will assist BAM in the forthcoming months until the financial close. Other advisers to BAM are De Brauw Blackstone Westbroek (legal advisers) and BDO (as model auditor). The advisers to the banks are Nauta Dutilh (legal), Mott MacDonald (technical) and AON Global Risk Consulting (insurance).

Rijkswaterstaat and BAM will sign the DBFM contract on 1 October 2012, and the financial close is expected to be reached in late November 2012.

Further information: Arno Pronk, Royal BAM Group, +31(0)30 659 86 21.