Silvertown Tunnel passes another major milestone with contract signing in London
Transport for London (TfL) and the RiverLinx consortium – comprising Macquarie Capital, Cintra, Aberdeen Standard Investments, BAM PPP PGGM, and SK E&C – have announced that they have reached financial close with Transport for London on the Silvertown tunnel project.
The signing of the contract to design, build, finance, operate and maintain the tunnel will now allow the consortium’s construction team of BAM Nuttall including sister company Wayss & Freytag Ingenieurbau, Ferrovial Agroman and SK E&C to progress with appointing the local sub-contractors and suppliers who will support the project. This will help deliver a vital piece of infrastructure to prepare for London’s future population growth and relieve chronic congestion and poor air quality around the Blackwall tunnel.
Silvertown will be the UK’s first major road tunnel to include a dedicated bus line in both directions. This will improve cross-river public transport connections, with around 37 buses an hour during peak periods in each direction using the tunnel, including the current six single-decker buses per hour which run through the Blackwall tunnel.
This will result in the proportion of cross-river trips via public transport in this area rising from 10 per cent to 30 per cent. These buses are all expected to be zero emission vehicles and will support the growing demand for bus transport across Greenwich, Newham and Tower Hamlets.
Over the past 30 years, East London, both north and south of the river, has seen significant population growth without major investment in the area’s road infrastructure. The local population is expected to increase further, increasing pressure on the 122-year-old Blackwall tunnel.
The new tunnel will provide more resilient transport links north and south of the river, it will reduce the amount of stop-start traffic as well as cut emissions from idling traffic. TfL estimate that the relief of the congestion at Blackwall and beyond should lead to journey time savings.
- TfL’s modelling has anticipated that without Silvertown Tunnel, both traffic and emissions from traffic queuing to pass through the Blackwall Tunnel will worsen over the coming years. Currently, delays in the morning peak across east and southeast London are expected to increase, on average, by over 20 per cent in 2021.
- The design of the tunnel includes a 1.4-kilometre twin-bore road tunnel under the River Thames as well as 0.6-kilometres of access ramps. It will connect south of the River Thames with the access to the existing Blackwall Tunnel and north of the River Thames with the Tidal Basin Roundabout, in Silvertown, easing traffic congestion in this key London location.
- The RiverLinx consortium – comprising Macquarie Capital, Cintra, Aberdeen Standard Investments, BAM PPP PGGM and SK E&C – was been named by TfL as Preferred Bidder to design, build, finance, operate and maintain the Silvertown tunnel in May this year.
- Design and construction of the project will be delivered by a consortium of BAM Nuttall (including sister company Wayss & Freytag Ingenieurbau providing specialist tunnel engineering expertise), Ferrovial Agroman and SK E&C.
- In a highly competitive process, 15 international lenders have agreed to provide financing for the £1 billion project, providing value for money for TfL. These include Aviva, Credit Agricole, DZ Bank, Instituto de Credito Oficial, Korea Development Bank, KEB Hana, Export-Import Bank of Korea, Korea Trade Insurance Corporation, KfW IPEX-Bank, Nrinchunkin, Royal Bank of Canada, Samsung Life, Shinsei Bank, SMBC and Woori Bank
The RiverLinx consortium
Macquarie Capital is the advisory, capital markets and principal investment arm of Macquarie Group. Globally Macquarie Capital focuses on six core sectors: infrastructure, utilities and renewables; real estate; telecommunications, media, entertainment and technology; resources; industrials; and financial institutions. The business has been involved in a number of key road projects – including the €1 billion Blankenburg road tunnel in Rotterdam, the largest road PPP awarded in the Netherlands to date, where Macquarie was majority sponsor. In the UK, Macquarie Capital provided £115m of capital and acted as lead sponsor, sole financial adviser and debt arranger to support the construction of the Mersey Gateway Bridge, which opened in 2017.
Ferrovial is one of the world’s leading infrastructure operators committed to developing sustainable solutions. The company has 96,000 employees and operates in over 20 countries. Its main business areas are: Services, Toll Roads, Construction and Airports. It is a member of Spain’s blue-chip IBEX 35 index and is also included in the Dow Jones Sustainability Index and FTSE4Good; all its operations are conducted in compliance with the principles of the UN Global Compact, which the company adopted in 2002. Cintra, its Toll Roads arm, is one of the world’s leading private sector developers of transportation infrastructure in terms of the number of projects and the volume of investment. It currently manages over 1,468 kilometers of toll roads in 24 concessions in Canada, the US, Europe, Australia and Colombia. Cintra is shareholder in the 407 ETR concessionaire, in Ontario, Canada. Ferrovial Agroman is the construction arm of Ferrovial. It delivers value-driven complex multi-disciplinary design and construction solutions across varied sectors worldwide, including transport, energy and water. The company has operated in the UK and Ireland since 2003. Flagship projects in the UK include Crossrail, Heathrow Terminal 2A, London Underground’s new Northern Line Extension and the Central Section of the Thames Tideway Tunnel.
Aberdeen Standard Investments (ASI) is a leading global asset manager dedicated to creating long-term value for our clients, and is a brand of the investment businesses of Standard Life Aberdeen plc, one of the world’s largest investment companies. With over 1,000 investment professionals ASI manages £519.4 billion (as at 31 March 2019) of assets worldwide and have clients in 80 countries supported by 50 relationship offices. ASI is high-conviction; long-term investor who believe teamwork and collaboration are the key to delivering repeatable, superior investment performance. ASI has assets under management of £4 billion within the infrastructure space, invested in over 120 projects across Europe, North America and Australia across transport, healthcare, education, accommodation, and water.
Standard Life Aberdeen plc is headquartered in Scotland. It has around 1.2 million shareholders and is listed on the London Stock Exchange. The Standard Life Aberdeen group was formed by the merger of Standard Life plc and Aberdeen Asset Management PLC on 14 August 2017.
BAM PPP, BAM Nuttall and Wayss & Freytag Ingenieurbau are operating companies of Royal BAM Group. BAM PPP is responsible for Royal BAM Group’s involvement in public private partnership (PPP) projects. BAM PPP operates in five key European markets, the Netherlands, Belgium, UK, Ireland, Germany and in selected international markets, in addition to exploring broader project finance investment opportunities. BAM PPP’s sector expertise includes roads, rail, education, health, justice, marine and general accommodation. BAM PPP has reached financial close on 48 projects, with a total capital value of over €12.1 billion.
As one of the largest civil engineering construction companies in the United Kingdom, BAM Nuttall operates in all sectors of the British civil engineering market on a national and a regional basis. Working with a diverse range of public and private sector customers, BAM Nuttall has a worldwide reputation for delivering exceptional civil engineering achievements spanning rail, marine, tunnelling, highways, and energy and water schemes. Clients include Network Rail, Highways Agency; Environment Agency; National Environment Research Council at British Antarctic Survey; Thames Tideway Tunnel and Olympic Delivery Authority. BAM Nuttall’s head office is based in Camberley.
Wayss & Freytag Ingenieurbau has a leading position in the German civil engineering market. The company is based in Frankfurt am Main. Wayss & Freytag Ingenieurbau has a solid reputation for bored tunnels and complex civil engineering projects and is therefore a highly sought-after partner for joint ventures, both in Germany and other countries, where it often works with local Group companies.
PGGM is a cooperative Dutch pension fund service provider. Institutional clients are offered: asset management, pension fund management, policy advice and management support. On 30 June 2019 PGGM had EUR 238 billion in assets under management and was administrating pensions of 4.4 million participants. Around 750,000 workers in the Dutch healthcare are connected to PGGM&CO, our members organization. Either alone or together with strategic partners, PGGM develops future solutions by linking together pension, care, housing and work.
Since founded in 1977, SK E&C has acquired world-class competitiveness in civil engineering as well as the construction of commercial buildings, residential complexes, oil refineries, gas processing plants, petrochemical plants, power plants, and advanced IT infrastructure. SK E&C is applying the extensive technical expertise and proven construction project track record amassed at sites around the world to build major expressways and arterial roads in the nationwide transportation grid. SK E&C today is creating new space as Korea’s leading builder of tunnels, underground storage facilities and other underground structures. The competencies and experiences that SK E&C has gained from these EPC projects have enabled to expand the involvement in public private partnership (PPP) development projects and SK E&C is now growing as PPP project developer in the global market. Projects of note in this regard include the Eurasia Tunnel and the Canakkale Bridge in Turkey.