Report pegs cost for Howe Bridge at $3.46B
The global consortium that will soon construct the Gordie Howe International Bridge has filed a “pre-sale report” that has placed the fixed cost it requires to finance the long-awaited bridge project at C$3.46 billion.
The documents published by Standard & Poor Global Ratings were obtained Wednesday by Crain’s Detroit Business.
They indicate the Canadian government will contribute another C$2.74 billion towards the project to the consortium known as Bridging North America during construction of the Howe bridge, which is expected to begin later this year. The federal government through its arms-length agency — the Windsor-Detroit Bridge Authority — will pay that cost in monthly instalments throughout construction known as “progress payments” under the public-private partnership arrangement, said Mark Butler, spokesman for WDBA on Wednesday night. After the bridge project is completed, WDBA will receive all toll revenues and repay the consortium for the $3.46 billion in funds they are financing through bonds to build and operate the bridge. The financial documents were required to be filed with the S&P credit agency by Bridging North America in order to secure bonds for the project and launch construction.
The credit documents are part of the process leading up to reaching a final contract agreement between the Canadian government and Bridging North America on the Detroit River bridge project which includes the crossing, plazas and new three-kilometre feeder road in Detroit linking to I-75 freeway.
“This is a pre-sale report issued by a bond service,” Butler said. “The figures are from Bridging North America and not from us (WDBA). “We look forward to announcing all the details of final arrangement once we have financial close in September, including a construction schedule. “But we are still having ongoing discussions with Bridging North America.” The Wall Street creditrating agency assigned a preliminary rating of A- and a stable outlook to $351.5 million in medium and longterm bonds in order to back construction by Bridging North America, according to Crain’s.
The report also spelled out a 74-month construction time frame for the bridge project pushing its opening to Nov. 30, 2024 — although that includes a 12-month cushion period, according to the documents.
The ownership within Bridging North America is split between ACS Infrastructure Canada Inc. (40 per cent), Fluor Canada Ltd. (40 per cent) and Aecon Concessions (20 per cent), Crain’s reported.
“The outlook is stable, with the expectation that the project will complete construction on time and within budget, given the very experienced construction contractor and the clear assignment of risk within the concession, along with adequate liquidity to sustain delays under our downside scenario,” S&P said in its report.