The final construction phase on the D4 motorway between Příbram and Písek can begin1/5/2021|Press releasesThe Ministry of Transport and the project concessionaire VINCI Concessions and Meridiam reached a financial closure to invest in the final construction phase on the D4 motorway between Příbram and Písek. The preparation phase is therefore completed and construction of 32 kilometre long section of the new motorway and reconstruction of the existing 16 km long follow-up sections can begin. The cap amount, set by the Ministry before submission of offers as a maximum price to ensure the benefits of constructing D4 in a form of a PPP project, was CZK 23.7 billion. According to the submitted offer, which included fixed interest margin and price for construction works, and based on the development of market inter-bank rates after the offer was submitted, the availability payment was set to CZK 17.8 billion net. The concessionaire’s financial institutions based on the financial agreement are ČSOB, MEAG, DZ Bank, Nord LB, Siemens, KfW, IPEX, SMBC, Société Générale and Unicredit. “The price will be fixed for the entire time of the project but that does not mean it is a final price. Similarly to mortgage, the agreement considers a refinancing option in case of a favourable development of interest rates. Normally, the refinancing takes place after the construction phase is completed, because project risk are lower and we can reach significant savings”, said Minister of Transport Karel Havlíček. Minister of Transport signed the concessionary agreement with the representatives of VINCI Concessions and Meridiam on 15 February 2021. “The full effect of the contract was conditioned by reaching a financial closure, which happened today”, added Mr Havlíček. After the financial closure, the concessionaire has 44 months (i.e. 3 years and 8 months) to construct and open the motorway, i.e. by December 2024. The concessionaire will then operate and maintain the motorway for 292 months (i.e. 24 years and 4 months). During this period, the state will pay an availability payment for the service. The payment is bound by agreed criteria of quality and availability of individual motorway sections. After the financial closure, the concessionaire became the project contractor, and therefore assumed responsibility for all works, including necessary changes in issued permits and ensuring archaeological researches, which precede the construction. Preparatory works, especially removal of greenery, has been going on around the future motorway since March. According to the contract, the Ministry of Transport has to transfer all building permits and necessary lands to the concessionaire via Road and Motorway Directorate based on a fixed schedule. The concessionaire will then hand over construction sites to the company DIVia stavební s.r.o., which is the main contractor and a subsidiary 100% owned by the company Eurovia CS. “The financial closure means that the project is definitively and fully effective. Our aim is to build and operate an innovative and sustainable motorway. The new D4 motorway will ensure high security and comfort for drivers and improve transport conditions and traffic flow. In the end, it will reduce the risk of traffic congestions and pollution”, said Mr Christian Biegert, a representative of the VINCI Concessions and Meridiam consortium for the Czech Republic. “Now, after the financial closure, we can launch the project. We expect first construction works to begin in the second half of May”, added Mr Biegert. Along with the newly constructed 32 kilometres, the concessionaire will operate and maintain in perfect conditions another 16 kilometres of D4 motorway and I/20 road, meaning it will reconstruct and equip them with motorway technology and emergency areas before opening the new section. After the motorway is completed, the state will begin with repayment and after 25 years of operation it will take it over in a “as good as new” condition. Compared to a traditional public procurement system, the state is buying not only the construction, but the full service, i.e. construction, operation and maintenance. The successful preparation of the project was a joint effort of the Ministry of Transport, the State Fund for Transport Infrastructure (financing) and the Road and Motorway Directorate (property management, approval process). An international team of representatives from law firm White & Case, financial advisors from Česká spořitelna, a.s. and technical advisors from Obermeyer Helika a.s. and SIEBERT + TALAŠ, spol. s r.o. provided comprehensive consulting services to the Czech Republic.