Dive Brief:

• A presale bond report issued by S&P Global Ratings offers up new details about the U.S.-Canada Gordie Howe International Bridge, including an updated cost estimate of approximately CA $3.46 billion (U.S. $2.6 billion).
• Bridging North America, the consortium that is performing design, build, finance, operations and maintenance as part of the public-private partnership with the Windsor-Detroit Bridge Authority, will finance its portion of the deal through a CA $587 million loan and a CA $454 million bond issue, rated A- by S&P. The credit rating group said some factors in the project's favor were that BNA's ownership had a great deal of experience with similar infrastructure projects; the consortium is requiring that major U.S. and Canadian subcontractors provide performance bonds from 50% to 100% of their contract values; the Canadian government is backing the authority's financial contributions; and the project's construction schedule is realistic. Potential negatives, according to S&P, are the complexity of the project and the management of subcontractors, which will make up 70% of the project's workforce.
• Consortium partners Dragados Canada (40%), Fluor Canada (40%) and Aecon Infrastructure Management (20%) will take on the design-build portion of construction, while ACS Infrastructure Canada (40%), Fluor Canada (40%) and Aecon O&M (20%) will handle operations and maintenance. Construction is scheduled to begin Sept. 28, with substantial completion slated for Nov. 30, 2024 and final completion set for Sept. 30, 2025.

Dive Insight:

The authority allowed consortium partner Aecon to rejoin BNA last month after the company withdrew earlier in the year when it looked like its sale to China Communications Construction International was a done deal. Citing national security concerns, however, the Canadian government killed the purchase, claiming that Aecon had been involved in some of the country's biggest infrastructure projects and had access to privileged information about them.

Reportedly, both the U.S. and Canada were also concerned that during the maintenance phase of the Gordie Howe contract that a China-run Aecon would be privy to information about the movement of goods and other border crossing activity.

Companies like S&P and Moody's Investors Service are valuable sources of information on public-private partnerships and will do an in-depth analysis in order to adequately rate the bonds and loans associated with the project. These agencies keep tabs on the project progress, as well, and can revise their outlook and ratings based on both negative and positive occurrences.

For example, in July, Moody's Investors Service maintained its Baa1 "moderate risk" rating on almost $1.5 billion in construction loans for the $2.3 billion I-4 Ultimate project in Orlando, Florida. Moody's downgraded its outlook for the project, however, from "stable" to "negative" because of the potential fallout from a potential 245-day delay period and estimated extra costs of $100 million.