FINANCIAL EXCELLENCE AWARD FINALISTS 2020

This award recognises exceptional advice and innovation in the financing or structuring of a major infrastructure project.

Sponsored by

CROSS RIVER RAIL – TUNNEL STATIONS AND DEVELOPMENT PPP

+ NOMINEES:

EY, KPMG, MACQUARIE CAPITAL, PACIFIC PARTNERSHIPS

Cross River Rail is Queensland’s largest infrastructure initiative, which includes construction of a new, 10.2 kilometre rail line from Dutton Park to Bowen Hills, 5.9 kilometres of twin rail tunnels under the Brisbane River, four new underground stations, upgrades to eight over-ground stations and the construction of three new stations on the Gold Coast Line.

The Tunnel, Stations and Development (TSD) PPP, which was awarded to a consortium led by CIMIC Group companies Pacific Partnerships, CPB Contractors, and UGL, with international partners DIF, BAM and Ghella. Pacific Partnerships, DI, BAM and GI&P were project sponsors at financial close, while debt finance was provided by 11 international banks.

On track for delivery in 2024, this will be the first PPP in Queensland delivered under an integrated ‘industrial equity’ model with majority participation by industrial partners across equity, delivery and operations phases. Pulse Partnerships will deliver technical and maintenance integration and commercial alignment in a way that has never been delivered before on a PPP in Queensland.

The Panel shortlisted the project in recognition of the innovative and efficient financial model used, which will incorporate Queensland capital contributions during both delivery and services phases. This approach maximised debt funding available and reduced debt costs during the delivery phase, with an integrated approach to aligning incentives and managing risks.

EAST ROCKINGHAM RESOURCE RECOVERY FACILITY

+ NOMINEES:

TRIBE INFRASTRUCTURE GROUP

The East Rockingham Resource Recovery Facility Project encompasses the design, construction, financing and operation of a greenfield Energy from Waste facility in the Rockingham Industry Zone, 40 kilometres south of the Perth CBD. The new facility will treat approximately 300,000 tonnes per year of non-recyclable residual waste from municipal, commercial and industrial sources and up to 30,000 tonnes per year of biosolids. The facility will also recover around 70,000 tonnes per year of bottom ash, which will be processed for use in road bases and other construction materials. The facility will generate 29 megawatts of baseload renewable energy and reduce emissions by more than 300,000 tonnes CO2-e per year. Developed by New Energy Corporation, Hitachi Zosen Inova Australia (HZI) and Tribe Infrastructure Group (Tribe), the facility will be owned by a consortium of co-investors comprising John Laing, Masdar, HZI and ACCIONA. Project finance was provided through a capital structure led by a senior debt group of five lenders, four of whom are first time lenders to the sector in Australia, supplemented by the Clean Energy Finance Corporation’s first subordinated debt facility, an $18 million recoupable grant from the Australian Renewable Energy Agency and an equity consortium comprising two firsttime foreign investors in Australia. The Judging Panel commended the range of unique characteristics of this project, including the range of waste, energy and financial arrangements required to establish commercial viability of the facility in an emerging and complex form of infrastructure delivery. The Panel also acknowledged the role this project has played as one of the first of its kind in Australia, creating positive momentum for other Energy from Waste projects and the development of a new domestic infrastructure market.

RAVENHALL REFINANCING

+ NOMINEES:

TETRIS CAPITAL

The Ravenhall Correctional Centre is a medium-security men’s prison at Ravenhall, in Melbourne’s west. Opened in 2017, the prison was developed by the Victorian Government to address supply shortages for correctional services in Victoria. The project was delivered under a PPP, between the Victorian Government and the GEO Consortium, comprising GEO Group Australia, John Holland Group, Honeywell and Capella Capital. The Ravenhall Refinancing involved the refinancing of the existing bank debt through a successful US Private Placement (USPP) issuance. The USPP product had numerous benefits over a traditional bank debt solution, including the removal of refinancing risk from Project Co and the removal of base interest rate risk from the State. The $462 million, long-term senior secured, fixed rate private placement carries a strong S&P A- rating with a tenor of 23 years. The refinancing through a USPP leveraged the current market conditions, being attractive long-term debt pricing due to increased competition from existing and new entrant funding providers. Combined with a historically low yield curve and a strong demand for quality Australian assets, the project benefited from opportune timing for targeting long-term debt for the infrastructure space. The Ravenhall Refinancing has been shortlisted for the Financial Excellence award to recognise the project having assisted in opening a new stream of investment for Australian PPPs, as one of the first successfully negotiated US private placements. The Panel also noted that the transaction provided benefits for the State and Project Co, and took full advantage of market conditions.

SYDNEY METRO CITY AND SOUTH WEST AUGMENTATION

+ NOMINEES:

EY, PLENARY GROUP

Sydney Metro is the biggest public transport program of works currently underway in Australia and the biggest urban rail infrastructure investment in Australian history.

The $3.7 billion Northwest Operations, Trains and Systems (OTS) PPP contract awarded to Northwest Rapid Transit (NRT) to deliver Stage One of Sydney Metro and operate it for 15 years was set up to allow it to accommodate future extensions.

The augmentation process – enabling the extension of the metro network under Sydney Harbour, through the CBD and out to Bankstown by 2024 – commenced in March 2016. The OTS contract and a new PPP contract were combined to create the OTS2 PPP contract, with its size, scale and complexity unprecedented in Australia.

The OTS2 PPP includes delivery of trains and systems, integration of foundation infrastructure works, and operations and maintenance of Sydney Metro until 2034. It also included refinancing of the OTS PPP debt (around $1.5 billion) and raised new debt and equity to finance the OTS2 PPP (around $1.2 billion). Sydney Metro and the NRT Parties achieved Contract Close on the OTS2 PPP on 21 November 2019 and Financial Close on 4 December 2019.

The augmentation was shortlisted in recognition of the scale and complexity of the contract, with a range of challenges related to project scope, risk transfer and incentivisation that were resolved through innovative solutions, including a bid cost and reimbursement structure that incentivised the bid side Financial Adviser/Sponsor (Plenary) to drive towards financial close. The financial arrangements delivered positive outcomes for a range of parties, including strong value for money outcomes for taxpayers.