BDO supports Meridiam-FCC consortium on £600m road upgrade project
20 November 2020
BDO’s tax, accounting and financial modelling assurance teams advised a consortium of private sector infrastructure providers in their successful bid for a major new design, build, finance and operate roads project being procured by the Welsh Government. The £600m 33-year project involves the upgrade of a 17.7km stretch of road from a three-lane single carriageway to a two-lane dual carriageway, with an additional 2.2km of new road to be constructed. This upgrade is expected to generate over £675m of Gross Value Added for the Welsh economy and facilitate economic regeneration of the region.
The project, which BDO assisted with for over 18 months up to the date the consortium reached financial close at the end of October, was the first to be procured by the Welsh Government under the Mutual Investment Model (MIM). The MIM gives the Welsh Government the ability to invest up to 20% of the project’s equity in return for up to 20% of the profits. MIM schemes will see private partners build and maintain public assets. In return, the Welsh Government will pay a fee to the private partner, which will cover the cost of construction, maintenance and financing of the project.
At the end of the contract the asset will be transferred into public ownership. In addition, during the construction phases of the projects, private partners will help the Welsh Government create apprenticeships and traineeships to benefit local communities.