The PPP public private partnership contract for the Silvertown road tunnel under the River Thames has been signed by Transport for London (TfL) and its concession partner RiverLinx. Construction of the 1.4km long, £1 billion (about US$1.3 billion) twin-tube link, close to the existing 122-year old Blackwall tunnel road crossing of the Thames, is due to start in 2020 towards opening in 2025, with the design-build-finance-operate-and-maintain concession running for a further 25 years. The fixed crossing includes dedicated bus lanes, a first in the UK.

Follow a fly-through of the new highway connection

The concession contract was competitively won by RiverLinx – a consortium comprising shareholders Macquarie Capital, Cintra of Spain, Aberdeen Standard Investments, BAM PPP-PPGM JV and SK E&C of Korea – when named as preferred bidder in mid-year. Contract signing, however, was automatically held up when the losing bidder launched a legal complaint in early August, though it subsequently agreed to lift the block on contract award. Since October, RiverLinx resumed efforts to achieve financial close on equity and debt funding for the project, which was required by TfL before the contract could be signed.

The design and construction work is to be completed by a consortium of BAM Nuttall, Ferrovial Agroman and SK E&C on an EPC, engineer, procure and construct, contract basis. BAM Nuttall will have tunnelling input from sister firm Wayss & Freytag. Both are part of Royal BAM Group of the Netherlands, which also includes the BAM PPP division for PPP investments.

Ferrovial Agroman of the Ferrovial Group has worked on large projects in London, including Crossrail, the Northern Line Extension of the London Underground network and the Central contract of the Tideway CSO sewer under the Thames.

SK E&C is active internationally across multiple sectors, and its tunnel projects have included the Eurasia highway twin-tube under the Bosphorus in Turkey and the Xe-Pian Xe-Namnoy hydro project in Laos. Following signing of the concession, RiverLinx is set to procure sub-contractors and suppliers for the construction works.

Under river link is scheduled to open to traffic in 2025

The RiverLinx consortium stakeholders:

• Macquarie Capital of the Macquarie Group, of Australia, which is already investing in European infrastructure including the Blankenburg road project in Rotterdam, which includes underground work.
• Cintra is the toll roads division of the Ferrovial Group and manages many toll concessions globally.
• Aberdeen Standard Investments is a major asset management company and part of Standard Life Aberdeen plc.
• BAM PPP is a long-term partnership with PGGM, a service company based in The Netherlands and manager of pension fund investments. The JV, along with BAM PPP sister companies, including Wayss & Freytag, is also involved in the Cross River rail tunnel project in Brisbane, Australia.
• A group of 15 international banks and financial organisations are to fund the concession project according to Macquarie. The lenders include (alphabetically): Aviva; Credit Agricole; DZ Bank; Instituto de Credito Oficial; Korea Development Bank; KEB Hana; Export-Import Bank of Korea; Korea Trade Insurance Corporation (K-SURE); KfW IPEX-Bank of Germany; Nrinchunkin; Royal Bank of Canada; Samsung Life, Shinsei Bank, SMBC; and Woori Bank.
• KfW IPEX-Bank is the Mandated Lead Arranger and Facility Agent for the export credit funding and is providing £175 million (US$230 million) of the financing. In a statement it noted that the Silvertown project is the first that exports credit agency cover from K-SURE has been put in place for a European PPP project. KfW IPEX-Bank is also involved in the Brisbane Cross River project.

Law firm Allen & Overy has advised RiverLinx on the PPP deal.

Transport for London is clear to pursue contracting signing with its preferred bidder Riverlinx for the Silvertown road link under the River Thames in London, after a legal block brought by the losing bidder, Silver Thames Connect (STC), over the procurement process and award decision. Just before the court case was to commence in the High Court Technology and Construction Court, STC agreed for the block to be removed.

Riverlinx as the preferred bidder however, has yet to reach financial close on its proposal for the design, build, finance, operate and maintain (DBFOM) project, which is needed before the concession contract can be signed by Transport for London (TfL), TunnelTalk was told.

In a statement, TfL said: “We are pleased that STC has consented to the TfL application to the Court to lift the automatic suspension on award of the Silvertown contract. We will now progress the arrangements for award of the contract to the Riverlinx consortium as soon as possible.”

TfL named Riverlinx as preferred bidder for construction, funding and operation of the 1.4km long twin-tube road tunnel under the River Thames in east London in May. The consortium comprises Cintra, BAM PPP, SK E+C, Aberdeen Standard Investments and Macquarie Capital.

The TfL spokesman told TunnelTalk: “TfL continues to discuss the outstanding issues relating to the challenges made by STC around the outcome of our procurement process and will continue to defend our approach robustly.”

Legal arguments are continuing over selection of the preferred bidder for the Silvertown road tunnel concession under the Thames River in London, after Transport for London (TfL) lodged its defence against the claim by the losing bidder.

London awaits Silvertown tunnel

In May, TfL announced Riverlinx, comprising Cintra, BAM PPP, SK E+C, Aberdeen Standard Investments, and Macquarie Capital, as its preferred bidder for the 1.4km twin-tube Silvertown link. Contract signing was blocked in early August when losing bidder, Silver Town Connect (STL), comprising Iridium Concesiones de Infraestructuras and Hochtief PPP Solutions, and two proposed subcontractors, Dragados and Hochtief Infrastructure, lodged a claim against the award.

In a case being heard by the UK High Court of Justice, STC and its subcontractors claim that TfL breached regulations and want for the award to Riverlinx to be set aside and for a declaration that the contract should have gone to STC. STC is also claiming financial damages and interest if the Court finds in its favour.

A spokesperson for TfL confirmed to TunnelTalk, in late August that the claim would block contract award until the dispute is resolved. “We are disappointed that our reserve bidder, STC, has decided to challenge the outcome of our procurement process,” the spokesperson said. TfL has stated that it would be looking to award the contract and begin construction as soon as possible.

TfL lodged its defence of the case on 11 September with the Technology and Construction Court of the High Court. The TfL spokesman told TunnelTalk that “we are defending the claim robustly and are seeking to have the suspension lifted so that we can enter into the contract.” A date of 10 October has been set for the application hearing.

The claimants say they received a formal notification of the TfL bid decision in a letter of 14 June, which stated the bid scored overall only fractionally, 0.54%, behind the Riverlinx bid. STL argues it had scored higher in price evaluation, which had most weighting in scoring the bids. It notes lower scores in two areas - one aspect of commercial evaluation concerning critical consents and ground condition rates, but contests the assessments, arguing that the evaluation and conduct of the procurement was flawed.

Fig 1. Silvertown under river link will add capacity to the existing Blackwall link

In its defence, TfL attests that the proposed subcontractors did not bid as part of STC group and that a bid member, John Laing Investments Ltd, that was committed to holding 50% of the equity in the event of a successful award, is not challenging the decision. TfL accepts STC scored higher than Riverlinx in the price evaluation but not significantly. It gives the tender scores by the two bidders as:

• Commercial (max 10% possible):
Riverlinx, 7.22% - STC, 7.00%
• Price: (max 85% possible):
Riverlinx, 82.34% - STC, 85%
• Ground (max 5%):
Riverlinx, 5% - STC, 2.02%

Silvertown is to be built on a design, build, finance, operate and maintain (DBFOM) concession. The procurement process began in October 2016, envisaging a 29.5 year contract of up to 4.5 years construction and 25 years operation and maintenance. The UK Government Department for Transport approved the project in May 2018 with the invitation to negotiate extended from mid-2017 to the end of 2018 (Fig 1). Design and construction was anticipated to be underway by now, with the transport authority planning for the new road connection under the River Thames to the east of the existing Blackwall twin tube road tunnel to open to traffic by 2024-25.