Perpignan-Figueras High Speed Rail Link PPP
Project Introduction
Following a public tender process, the
contract to finance, design, build and operate a new high speed
railway across the Pyrenees was awarded in January 2004 to TP Ferro
(a French/Spanish SPV company formed by Eiffage and ACS Dragados).
Scott Wilson is Technical Advisor to TP Ferro’s lenders, carrying
out technical and commercial due diligence for the £1.1bn PPP
mixed-traffic rail link between France and Spain.
Project Background
The link forms the international section of a
high-speed rail network that will carry both passengers and freight
traffic. It will reduce journey times between Barcelona and
Toulouse by more than 2 hours and is due to be completed in 2009.
The most difficult aspect of the International Section concerns the
tunnel through the Pyrenees, which is in one of the most complex
and faulted geological zones of Europe.
Project Scope
T P Ferro has arranged finance with five
European project finance banks. Scott Wilson undertook an initial
high-level review of the entire transaction to provide the lenders
with the technical information that they required during the period
to Financial Close. From this initial review, the team identified
those areas of the project which, in their opinion, posed the
greatest material and contractual risks for the lenders, and
produced a final due diligence report.
Scott Wilson continues to provide monitoring
and certification of the EPC contractor’s design and build
activities, programme and progress, reporting quarterly to the
lenders. This includes:
- Taking part in risk assessment and allocation
workshops
- Monitoring the environmental management
programme
- Certifying drawdowns from the loan against
milestone activities
- Taking part in the compliance reviews
- Reviewing the Operations and Maintenance
Contract
Value Adding Project Achievements
In carefully understanding the needs of the Mandated Lead
Arrangers, Scott Wilson were able to induce greater contract
clarity between the concessionaire and its EPC and O&M
contractors, better identification and pass-through of risks and,
ultimately, a reduced risk to the lenders associated with the
transaction.
