Arup provided technical review services for the Costanera Norte highway, a new 45km, six-lane urban toll highway that serves as the main east-west corridor through Santiago. The project has resulted in significant travel time savings and improved road safety for its hundreds of thousands of daily users.
This complex project was the first in Latin America with a free-flow open-road tolling system and the third one in the world at the time. It also included construction of over 6km of tunnels running under and alongside a river in order to avoid what otherwise would have been a highly disruptive right of way acquisition programme and utility relocation programme through the downtown core of this city of over 5M inhabitants. The construction cost was close to US$500M in 2003-2006.
Costanera Norte also included a number of infrastructure improvements along the route, such as new bridges, improved flood defences, and upgrades to several existing streets.
The client tasked our multidisciplinary project team — consisting of transaction advisors, civil and structural engineers, ITS and tolling system specialists, highway designers and geotechnical engineers — with assessing project risk, the commercial terms of the concession contract, the Design & Build and Operations & Maintenance contracts, reviewing budget and schedule estimates, reviewing the right of way and utility relocation programs and associated risks, and evaluating the life-cycle cost program proposed by the toll road developer.
This work culminated in our due diligence report which supported our client, the Inter-American Development Bank, and the toll road developer, Impregilo, to reach financial close on what at the time was the largest infrastructure bond financing in Chile’s history. Our report confirmed the strength of the toll road developer’s plans and risk management strategy as a whole, as well as the appropriateness of the commercial structure of the project. Our approach and advice enabled the parties to craft debt issuance terms that protected their interests in a win-win solution. The project won the prestigious Project Finance International Latin American Deal of the Year award in 2004.
During the project’s construction and operations phases we have acted as the Independent Engineer, providing on-going risk management and project development advice, progress and quality reviews, payment certification, and monitoring of the technical and financial performance of the project.
More recently the toll road developer, Impregilo, and the granting authority, the public works department of the government of Chile, have agreed on a program to improve traffic flow and connectivity with other new roads and development projects that have been built in Santiago since the project’s start of operations in 2006. This program is worth over US$300M in additional investment. Arup continues to provide Due Diligence review, risk advice, and Independent Engineer services in support of the additional investments.