Aussies weigh in on NZ’s largest-ever PPP

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The Australian team of global firm Herbert Smith Freehills (HSF) have played a major role in the success of New Zealand’s largest PPP to date.

The firm advised the Wellington Gateway Partnership consortium (WGP) on its successful bid for the availability based NZ$1 billion Transmission Gully Motorway.

WGP will finance, design and construct the project and then operate and maintain the 27km Transmission Gully Motorway for a 25 year period following completion of construction. The project is New Zealand’s first state highway to be delivered as a PPP. WGP aims to have the Transmission Gully highway open for traffic by 2020.

HSF advised the consortium throughout the competitive bidding process and continued negotiations with the New Zealand Transport Agency to complete the transaction.

Herbert Smith Freehills partners Josh Sgro, Gerard Pike and senior associate Andrew Griffiths led a cross practice team in relation to the PPP project, with support from special counsel, Nicole Lacy, senior associates Andrea Castle, Lynda Tully and Tyson Carruthers and solicitors Nile Rodman, Joyce Cunningham, Matt Sercombe, Yasmin Parat and Alex Wilson.

Partner Pike says the transaction is highly significant because it’s New Zealand’s first road PPP and first availability based concession toll road.

“The performance regime under the project agreement with the NZTA contains some new features for roads in the Australasian market. Due to the geography of Transmission Gully the road’s design is also very complex, there are almost 30 bridges over the 27km stretch of road, and this also added complexity to the contractual and financing arrangement,” he told Australasian Lawyer.

Although HSF has acted on almost all of the 80 PPPs completed in Australia to date, this is the first it has completed in New Zealand.

Pike says the success of the PPP demonstrates the firm’s ability to bring together experienced and multidisciplinary teams together on complicated projects.

“It also demonstrates Herbert Smith Freehills’ ability to export its PPP procurement and financing skills and experience to markets where the PPP model is relatively new,” he says.

Kiwi top tier Simpson Grierson worked alongside HSF in acting for the sponsors.

Leading commercial partner Simon Vannini told Australasian Lawyer that the two firms complemented each other well to drive home a solid end result.

While HSF offered the project and roading expertise, Simpson Grierson brought expertise in local law, consenting and planning to the table.

“The Transmission Gully PPP provided the opportunity to help our client deliver a complex and time critical project, by leveraging our specific expertise and experience in large infrastructure projects,” he says.

Vannini’s team included Peter Eady and Josh Cairns (banking and finance), Graeme Christie and Sonia Vitas (construction), James Winchester and Matt Conway (resource management) and Nick Wilson (property).
  
Who did what:
  • For the Transport Agency in New Zealand (the relevant state entity) - Bell Gully in New Zealand.
  • For the banks - King and Wood Mallesons in Australia and Russell McVeagh in New Zealand.
  • For the Sponsors - Herbert Smith Freehills in Australia and Simpson Grierson in New Zealand.
  • For the Accident Compensation Corporation (which was one of the Sponsors and a Lender) - Chapman Tripp in New Zealand.

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