Pretoria – Intertoll was part of a consortium that had been awarded the €1.1 billion (R11 billion) M6 phase 3 motorway project in Hungary, the Group Five subsidiary announced yesterday.

Intertoll, which posted operating profit of R18 million in the year to June, holds 10 percent of the concession firm and will lead the operations and maintenance activities.

Eric Vemer, the head of Group Five Infrastructure Concessions, said revenue would start flowing through to Intertoll from the beginning of next year, with full-scale operations commencing in 2010.

Vemer said it was too sensitive to comment on what the contract meant to Intertoll’s revenue growth and profit, except that it would increase the size of the business by 30 percent.

He said its equity investment in the consortium comprised about R80 million, with a portion paid now and the balance of the debt drawn down in the construction period.

Intertoll was leading the operation of motorway management equipment and was involved in tunnels for the first time, which was “a move up the food chain”, he said.

Its partners are Strabag (Germany), Colas (France) and John Laing Infrastructure (UK).

The 78km dual carriageway project includes the construction and maintenance of 55 structures and four tunnels of more than 3km in total length.

The 30-year concession was tendered and closed in record time, with prequalifications announced in May, tenders submitted in September, the preferred bidder chosen in October and financial closure reached on November 21.

“Most people in the world will be bowled over by these time lines. It’s the most fast-tracked project I’ve ever been involved in,” Vemer said.

He said the project reinforced and added depth to Intertoll’s position in Hungary and added to its growing profile in eastern Europe.

Traffic through Hungary from Romania and Bulgaria had increased by 30 percent since it joined the EU in 2004.

Vemer said Intertoll saw strong earnings growth coming out of eastern Europe, which was reflective of the political commitment and drive to make road infrastructure projects happen.

Intertoll had prequalified for another project in Hungary and had formed a consortium in Slovakia that was now going though prequalification.

PUBLICATION: Business Report
AUTHOR: Roy Cokayne
DATED: 4th December 2007