Cintra landed first concession Trans-Texas Corridor
Cintra lands the first concession for a toll road in the Trans-Texas Corridor project in the US.
Madrid, Spain – The project represents an investment of approximately 1.3 billion dollars in the construction phase and the concession will run for 50 years. Segments 5 and 6 of State Highway 130 (SH130), which have a total length of 40 miles (64 kilometres), represent an alternative to the highly-congested IH35 between San Antonio and north Austin.
The operation is coherent with Cintra’s strategy: profitability, long-term concession, majority stake, and sizeable investment in the world’s most developed economy.
Cintra continues to work under its 50-year strategic partnership for the design and planning of the 1,300 km Trans-Texas Corridor. With this project, Cintra will have a stake in companies managing 23 toll roads (3 pending final award) in Europe, North America and Chile; it is also Spain’s leading car park operator, managing over 240,000 parking spaces.
Toll road and car park operator Cintra has landed its first concession within the Trans-Texas Corridor project: it will design, build and operate Segments 5 and 6 of the SH130 toll road, between Austin and Seguin (64 kilometres). Investment in the construction phase is estimated at 1.3 billion USD (appx.1,080 million euro) and the concession will run for 50 years from the end of construction (projected to take 5 years).
With a 65% stake, Cintra heads the winning consortium; partner Zachry, the second-largest construction company in Texas, owns 35%. Construction is expected to start early in 2007 once environmental and other permits have been obtained. Construction work will be performed 50% each by Ferrovial Agromán (Ferrovial’s construction subsidiary) and Zachry.
The new highway will offer an alternative to Interstate Highway 35 (IH35) between San Antonio and north Austin, making it possible to avoid the highly-congested area of central Austin on medium- and long-distance journeys. This new high-capacity road will absorb growth in long-distance truck traffic expected as a result of trade agreements between the US, Mexico and the Central American countries.
The transaction is coherent with Cintra’s strategic objectives for business expansion. It is a significant investment in the world’s most advanced economy, in a long-term concession (50 years) in which we own a controlling stake.
Shareholder IRR is estimated at 12%. The road also has an attractive toll plan. Tolls have been set at 12.5 cents per mile for light vehicles and 50 cents per mile for heavy vehicles (2006 figures) and they will be updated in line with the State of Texas nominal per capita Gross State Product.
Presence in the United States: Texas, Chicago and Indiana
In March 2005, a consortium of Cintra (85%) and Zachry (15%) signed a contract with the State of Texas to develop the TTC-35 High Priority Trans-Texas Corridor over the next fifty years. As a result, the two companies became strategic partners of the Texas Department of Transportation (TxDOT) in designing and planning the development of the largest infrastructure project ever undertaken in the US, representing an investment of between 29 and 36.7 billion dollars.
In its initial offer to TxDOT, Cintra proposed to directly develop five toll road projects worth a total of approximately 6 billion dollars. Under the terms of the contract, each of these projects may be negotiated only if there is agreement between the consortium and TxDOT. Segments 5 and 6 of the SH130 are the first such project.
In the US, Cintra also heads the consortium that commenced operating the Chicago Skyway in January 2005 under a 99-year concession (1.83 billion dollars), and 2006-06-29 it took over the Indiana Toll Road under a 75-year concession (3.8 billion dollars).
Cintra, one of the world’s largest private-sector transport infrastructure developers
Cintra, a subsidiary of Ferrovial, is one of the world’s leading private-sector developers of transport infrastructure, with committed investment of over 2 billion euro in concession companies’ equity. Cintra operates over 2,000 kilometres of toll road that represent a managed investment of over 15 billion euro.
With this project, Cintra will have a stake in companies managing 23 toll roads, in Spain (9), Ireland (2), Italy (1), Greece (1), Portugal (2), Chile (4), Canada (1) and the USA (3). Three of its concession projects (Italy, Greece and one toll road in Ireland) are currently pending final award.
Additionally, Cintra is Spain’s leading car park operator and manages over 240,000 parking spaces.