Today, the Ministry of Transport received final tenders for the pilot PPP project for the construction, operation and maintenance of the D4 highway between Příbram and Písek. If the Concession Agreement is approved by the Czech government and the Chamber of Deputies by the end of 2020, construction work on the site will begin in March 2021.
The bids were submitted by two tender participants who successfully demonstrated their qualifications in the first round of the tender and subsequently completed four rounds of a competitive dialogue. Both participants comprise renowned companies with considerable experience from similar projects from around the world. The key evaluation criterion of the competition is the so-called net present value of payments for the availability of new sections of the highway in the length of 32 km and existing sections in the length of 16 km. These costs will be paid by the state continuously during the operation of the highway over the period of 25 years.
"We are very close, and if all goes well, this will be a historic breakthrough in infrastructure financing in the Czech Republic. The successful implementation of the PPP project for the D4 highway will become a milestone for the further use of the PPP model for the construction and operation of transport and other necessary infrastructure", says Minister of Transport Karel Havlíček, adding: "In contrast to the traditional model of public tenders, the Concessionaire will assume a significant proportion of the risk associated with the preparation of the implementation documents and the handling of changes which may become necessary in the course of the construction process, and most of the risk associated with the condition of the land on which the construction will be built. Another advantage is the spread of the total cost of construction and of the operating expenditure over a longer period of time."
The participants’ bids propose a total price (i.e. the net present value of the proposed availability payments) in the following amounts:
- DIVia Consortium (consisting of VINCI Highways SAS, VINCI Concessions SAS and Meridiam Investments SAS): CZK 16,554,520,243,
- Consortium Via 4 - Southern Connection (consisting of PORR Beteiligungen und Management GmbH, Macquarie Corporate Holdings Pty Limited (UK Branch), Obrascon Huarte Lain, S.A., Egis Projects S.A. and SK Engineering & Construction Co. Ltd.): CZK 18,283,543,000
Aside from the price, the bids will also be evaluated on the strength of two qualitative parameters of the highway at the time at which it will be returned to the state (whereas a value in excess of the required minimum quality is evaluated positively). The public authority will now proceed to the evaluation and assessment of tenders so that a concession agreement can be concluded with the selected supplier after approval.
For the winning price, the winning consortium (hereinafter referred to as the Concessionaire) will not only build the new sections, but also partially refurbish and retrofit existing sections with modern highway technology which will ensure public oversight over the quality of services provided by the Concessionaire. The Concessionaire will also build a new operation and maintenance center near the I / 19 crossing. The Concessionaire will also manage the entire project using the BIM model and a common data environment. The Concessionaire will operate and maintain all sections in a fully functional condition for a period of 25 years. The Concessionaire will be motivated to comply with the quality requirements as stipulated in the agreement because violations will be fined by deductions from the monthly availability payments. Deductions will also be made if driving in individual lanes is restricted. The Concessionaire will be bound by the concession agreement, and upon termination of the agreement, the Concessionaire will be obliged to return the highway to the public authority in a quality approaching a newly built road.
The newly built sections of the highway will be owned by the state, but the state will not participate in financing their construction. The same applies to the modernized sections. The state will start paying the Concessionaire only after the highway (or parts thereof) have been handed over for operation in the contractually defined quality. Payments in the form of availability payments are tied to the fact that the highway will be available to its users in the contractually defined quality throughout the entire period of operation. In the event of non-compliance with this quality standard, a corresponding part of the availability payment to the Concessionaire will be deducted as a contractual penalty.
Construction work may be expected to start at the beginning of 2021. The signing of the agreement will depend on the approval of the Czech government and the Chamber of Deputies in accordance with the Czech Roads Act.