Roads Service DBFO

UK, Motorway network in Northern Ireland.

Various capital construction projects on motorway network then subsequent operation and maintenance of sections of network for 30 year concession period (currently proposed to procure as two contracts).

Design, Build, Finance and Operate Contract (DBFO) through a Public Private Partnership (PPP).

Bespoke contract based on Highways Agency (HA) model adopted on a number of DBFO roads schemes procured by the HA.

Department for Regional Development Northern Ireland Roads Service (Client), Babtie Group (Technical Adviser), KPMG (Financial Adviser), Denton Wilde Sapte (Legal Adviser).

Tenders for Package 1 due to be returned on 15 September 2004 with award process for Package 1 due to be completed by Summer 2005. Package 2 is currently programmed to run 12 months behind Package 1. It is currently intended that the concession for the operation and maintenance of each contract will run for 30 years from completion of construction of the capital works in each Package.

As above.

Package 1 capital works £95m, Package 2 capital works £115m

Package 1 – Includes the maintenance of 44 km of motorway and capital works with an estimated overall value of £95m (currently programmed to commence on site in January 2006).

Package 2 – Includes maintenance of 117km of motorway and dual carriageway and capital works with an estimated construction value of £115m (currently programmed to commence on site in February 2007).

The completed projects will ease traffic problems at key locations and provide significant enhancements to the Strategic Transport Network as a whole. The improvements are key to attaining the Department’s Regional Transportation Strategy and the Regional Strategic Transport Network Transport Plan objectives.

The developments will also improve the prospects for economic growth and provide benefits in relation to reductions in delays, congestion, pollution and accidents on road users and non-road users along the corridor.

The statutory procedures for the individual capital schemes within the two packages are at different stages with some of the schemes being in gestation for a number of years and for others the statutory procedures are being completed during the initial stages of the procurement process.

In return for the works and services that the successful DBFO provide, Roads Service will pay the DBFO company a service/unitary charge from the date of effective completion of the capital works. The DBFO company then uses these payments to repay the finance it obtained and to provide a return for its investment. The payments are based on the availability of the carriageway sections to road users under the DBFO companies control.

Noted above under introduction and issues.

Early stage in process.

As noted above Tender process for Package 1 is currently underway with the procurement process for Package 2 running approximately 12 months behind Package 1.

Alan Seywright (Babtie Group Project Director), Nick Chisholm (KPMG Project Director), Ian Hodgson (Denton Wilde Sapte, Partner)

Leslie White: +44 (0)2890 540 124, Alan Seywright: +44 (0)131 556 9777, Nick Chism: +44 (0)20 7311 8603, Ian Hodgson: +44(0)20 7246 7032