Construction of the remaining 32 kilometres of D4 motorway will start in March

Construction of the remaining 32 kilometres of D4 motorway will start in March
15/2/2021Press releases

By signing the concession agreement, the minister of transport Karel Havlíček confirmed that the construction of the remaining 32 kilometres and the following 25-year operation of D4 motorway will be managed by DIVia consortium. This marks the beginning of a pilot PPP project, which represents an alternative way to ensure construction and long-term operation of transport infrastructure, including the funding.

Construction of the remaining 32 kilometres of D4 motorway will start in March
The total length of the contract is fixed to 28 years, out of which 44 months is dedicated to design and construction phase (i.e. 3 years and 8 months) and 292 months to operation and maintenance phase (i.e. 24 years and 4 months).

“The newly constructed modernized motorway will be owned by the state during the duration of the contract as well as after its termination,” assures minister Havlíček and adds that “the right and obligation to operate, maintain and draw benefits in a form of availability payment will be ensured by the concessionaire. The revenues from performance and time-based charging will remain the standard income of the State Fund for Transport Infrastructure (SFDI) and the profits from these charges will by no means enter to the defined payment mechanism”.

The availability payment is distributed proportionally by individual sections according to the length and the amount of invested costs. Concerning the existing sections, the availability payment will be made after the first new section of D4 motorway is opened. The first monthly availability payment is expected to be paid in November 2024 given that according to the initial time schedule all new sections should be opened at once on 31 October 2024.

However, the amount of the availability payment is bound to compliance with agreed quality and availability criteria for individual motorway sections, as minister Havlíček pointed out. If the driving lanes are of poor quality or unavailable, derogations defined in the contract will be applied. “In theory, availability payments may be reduced to zero at zero-availability. Employees of State Fund for Transport Infrastructure and Ministry of Transport will conduct regular controls of quality and availability”, adds the minister.

Before the concession agreement becomes fully effective, all suspensive conditions defined in the agreement must be fulfilled. The most important condition is to reach a so-called financial closure, i.e. closure of all agreements on funding at margins clearly fixed beforehand, which were a part of the final offer. To ensure successful financial closure, the concessionaire presented financial security in the amount of CZK 75 million during the signing of the agreement. The concessionaire is taking all steps to reach financial closure by 17 March 2021.

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