Case Study - New Tyne Crossing
| Country: | United Kingdom |
|---|---|
| Business area: | Infrastructure Development |
| Sector: | Transport |
| Project value: | £360m |
| Investment date: | 2007 |
| Completion date: | 2011 |
| Realisation date: | To be determined |
Design, build, finance, maintain and operate a new tunnel; refurbish, maintain and operate the adjacent existing road tunnel; and operate and maintain the existing pedestrian and cycle tunnel.
InfraRed invested into Newcastle’s New Tyne Crossing in August 2007, with the Tyne & Wear Passenger Transport Authority (‘Authority’) as the grantor of the concession. The project involved the construction of a two-lane tunnel under the River Tyne and related road works, approximately 2.6km in total length, along with associated buildings and operation of the existing tunnel. The new tunnel runs alongside the existing one, which opened in 1967 and has reached its design capacity. The project is intended to ease traffic congestion and improve public safety.
The project consortium is responsible for the design, construction, finance and operation of the tunnel over a 30-year concession. The consortium will receive a monthly payment based on revenue from actual traffic, subject to a sharing mechanism with the Authority. The usage payment is also subject to service performance (e.g. payment reduction for unplanned lane closures).
An attractive feature of the asset is the running yield from the existing tunnel operation combined with capital growth from the refurbishment and expansion programme. A number of challenges and risks associated with this project were identified and effectively mitigated by the team through its due diligence, structuring and negotiations with consortium partners:
- a complex construction programme and technology (semi-submersed tunnel) involving dredging the river bed; and
- continuing traffic flow in the existing tunnel had to be managed under the impact of disruption from construction works.
The new tunnel was opened to traffic at midnight on 25 February 2011. Refurbishment of the original tunnel was completed at the end of 2011.
