Re Contract

RNS Number : 5970S

Balfour Beatty PLC

20 May 2009

 



20 May 2009

CONNECT PLUS REACHES FINANCIAL CLOSE FOR M25 DBFO 

Balfour Beatty, the international engineering, construction, services and investment Group, announces today that Connect Plus, a consortium comprising Balfour Beatty (40%), Skanska (40%), Atkins (10%) and Egis Projects SA (10%), has reached financial close for the £6.2 billion design, build, finance and operate (DBFO) contract to provide additional capacity and maintain the M25 motorway for the Highways Agency.

Commenting today, Balfour Beatty Chief Executive, Ian Tyler, said:

'We are delighted that Connect Plus has reached financial close on the M25 DBFO contract. This landmark contract is critical in supporting London and, more widely, the UK's transport network.

'We look forward to transforming the M25 into a world-class motorway with the highest levels of safety and reliability.' 

The M25 motorway DBFO contract is a 30-year concession during which time Connect Plus will be responsible for widening key sections of the M25 and providing operating and maintenance services and lifecycle replacements on the whole road, which includes strategic road links in and out of London, totalling 250 miles.

During the initial three years of the contract the construction joint venture, Skanska Balfour Beatty, will add some 40 miles of additional capacity to the M25 between Junction 16 (M40) and Junction 23 (A1 at South Mimms) and Junction 27 (M11 at Bell Common) and Junction 30 (A13 at Thurrock).  As part of the contract, the Skanska Balfour Beatty construction joint venture will refurbish the A1(M) Hatfield Tunnel.  All of this work will be completed ahead of the London 2012 Games.

The operation and maintenance of the M25 network will be undertaken by Connect Plus Services, a joint venture comprising Balfour Beatty (52.5%), Atkins (32.5%) and Egis (15%).

Balfour Beatty Capital, the Group's infrastructure investment arm, will invest £80 million of equity in the project over the initial three years.

The total amount of project funding is £1.3 billion, comprising £925 million of senior debt provided by 16 commercial banks, a separate £185 million facility from the European Investment Bank and £200 million provided by the shareholders of Connect Plus.

ENDS

Media/analyst enquiries:

Duncan Murray

Tel: [phone]

www.balfourbeatty.com

Notes to Editors:

1.	Balfour Beatty is a UK leader in road building and widening schemes and a leading road manager and maintainer. Balfour Beatty was responsible for the construction of several sectors of the original M25 and completed the widening of junctions 12-15 adjacent to Heathrow Airport on time and on budget in December 2005. Balfour Beatty has significant investment interests in five PFI roads schemes. These are the M25 DBFO, the M1/A1 Link in Yorkshire, the A30/A35 in Devon and Dorset, the A50 in Derbyshire and the M77/GSO in Scotland. It is also preferred bidder for the Carlisle Northern Development Route project. It is also a leading provider of highway maintenance and asset management. It is responsible for the Highways Agency Areas 2, and 4 and for local authority roads in North Yorkshire, Essex, the North West of Scotland, Royal Windsor & Maidenhead, Wokingham and Westminster.
2.	Balfour Beatty has a substantial existing investment portfolio, largely through the UK PPP/PFI programme. This portfolio consists of: Nine major hospitals Eight major schools schemes in the UK and a technical education centre in Singapore Five roads schemes and three street lighting projects The London Underground power system A waste water scheme A coastal defence pathfinder PPP Barking Power Station (non-PPP) Exeter International Airport (non-PPP) Blackpool International Airport (non-PPP). In the US, Balfour Beatty Communities is responsible for the development, renovation, operation and management of military privatisation housing projects for the US Departments of the Army, Navy and Air Force. The company is a leader in the military housing industry and provides services to members of the US military and their families residing on or near bases located in 20 states and Washington, DC.
3.	Balfour Beatty is a world-class engineering, construction, services and investment business, well-positioned in infrastructure markets which offer significant long-term growth. We work in partnership with sophisticated customers who value the highest levels of quality, safety and technical expertise. Our skills are applied in appropriate combinations to meet individual customer need.

 

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