On April 15, 2010, the Government of Alberta signed an agreement with B2L Partnership to design, build, finance and maintain 10 state-of-the-art schools in the province through a Design-Build-Finance-Maintain public-private partnership. The schools are scheduled to open in June 2012 and provide space for more than 7,900 students. B2L Partnership had the lowest bid price at $253 million. According to the Government of Alberta, this public-private partnership resulted in a savings of $105 million to the province compared to the cost of providing the same work through traditional delivery methods. This agreement represents part of the second phase of Alberta's programme for the alternative procurement of schools.
Under the terms of the project agreement, Alberta agreed to contribute provincial funding of approximately $86.5 million by way of progress payments to the project. Total debt aggregated approximately $92 million, including approximately $75 million in long-term lending and a $17 million short-term tranche to remain in place until completion of construction and receipt of the final provincial progress payment. The financing was arranged and underwritten entirely by Bank of Ireland and Sumitomo Mitsui Banking Corporation.
HOCHTIEF PPP Solutions GmbH, parent company of HOCHTIEF PPP Solutions North America Inc., is investing 50 per cent of the project's equity, with GVest Infrastructure and Development Fund 1 and Connor, Clark & Lunn GVest Traditional Infrastructure Limited Partnership, each an affiliate of Gracorp Capital Advisors Ltd., providing, in aggregate, the other 50 per cent. The design-builder for the project is a joint venture of Graham Construction and Bird Construction, and the renewal and maintenance contractor is Honeywell.
B2L Partnership was advised by HOCHTIEF's in-house counsel, Cecil Kramer and, on the finance side, by a team from Davis LLP that included Doug Buchanan, Ian Bendell, Andrew Burton, Linda Parsons, Eric Belli-Bivar, David Stratton, Ruby Chan and Jonathan Gilhen.
This deal was featured in the September 2010 issue of Lexpert, under its Biggest Deal section.