HSF advises on market-first project financing of Melbourne’s $A11.1 billion North East Link PPP
Herbert Smith Freehills has advised the financiers to the largest Public Private Partnership (PPP) in Australia, and the first PPP in the market to feature Alliance contracting principles – the A$11.1 billion North East Link PPP in Victoria.
The North East Link PPP is the largest package of works in the North East Link Program, the biggest transport project undertaken to date in Victoria. It completes the ring road around Melbourne that connects the Metropolitan ring road (M80) and Eastern Freeway (M3).
The PPP component features twin three-lane tunnels, of approximately six and a half kilometres in length, associated tunnel systems, intelligent transport systems, tolling infrastructure, and associated infrastructure.
In a climate of changing risk appetite in the market, the ITC (Incentivised Target Cost) PPP model has long been mooted as one that could provide a more balanced approach to risk allocation. This is the first model of this nature brought to market and successfully banked. The transaction has also featured a ground-breaking financing structure incorporating elements of bank and institutional debt in a truly global financier group.
Herbert Smith Freehills project finance partner Miles Wadley led a multi-disciplinary team on the transaction together with projects partner Erin Wyeth. Rounding out the Herbert Smith Freehills team were lead senior associates Nadine Kilpatrick and Joseph Varghese, supported by senior associates Jennifer Brightling and Tessa Spence and solicitors Luke Kavanagh, Jana Mavroidakos and Andrew Evans.