Background

Part of the City of Edmonton’s Long Term LRT Network Plan adopted in 2009, the Valley Line further satisfies the need for mass transit of the City, which was identified in 1962 and began to be realised in 1978 with the opening of the original line – now called the Capital Line – which would remain the only line in the system for another 37 years.

The City of Edmonton tendered the Project at the start of 2020 under a Design, Build and partial Finance scheme, with the city procuring the light rail vehicles separately from the main PPP tender. Marigold Infrastructure Partners, a consortium composed of Colas and Parsons, has been selected by the City of Edmonton in October 2020, with less than 1 year passing between the start of the procurement process and the Closing of the transaction.

Project

The project itself involves a 14km extension of the LRT line that will connect downtown Edmonton to the Lewis Farms neighbourhood in the city’s west end. As part of the extension, 14 new stops will also be constructed, alongside two elevated stations, connecting key places such as the West Edmonton Mall, Misericordia Hospital, NorQuest College and MacEwan University. The project will include a 2.1km elevated track, and two maintenance and storage facilities, with construction planned to start in the summer of 2021 and completion scheduled for late 2026.

This project marks the second stage of the wider Valley Line, a 27-km urban-style LRT line (with smaller, more frequent stops that are better connected to the surrounding community), which will operate between Mill Woods in southeast Edmonton and Lewis Farms in west Edmonton. The first stage reached financial close in February 2016 and is set to begin passenger services in 2021.

Operis role

In-depth sector expertise

With its extensive experience in Canadian PPP procurements and its strong history supporting clients in infrastructure transactions in the transportation – and more specifically, light rail transit – sector, Operis stood well positioned to support bidders on this deal.

As is typical in Canadian PPP transactions, Operis provided a two-stage solution for the project, with both a full audit at bid stage and a refresh of that audit undertaken to support the consortium in reaching financial close.

In-house Tax & Accounting experts

In addition to a full review of the model, Operis also provided an independent review of the sales tax cashflows within the model, utilising the expertise and specialist knowledge within Operis’s dedicated tax and accounting team to produce a comprehensive audit solution for the consortium.

Additional modelling resources on hand

Following the bid submission for the project on 27 October 2020, Edmonton wasted no time evaluating the proposals. It announced the Parsons/Colas consortium as preferred proponents just two days later, on 29 October 2020.

As is standard in the well-developed Canadian market, financial close occurred less than two months later, with a successful close held on 23 December 2020, marking a positive end to a challenging year.

Despite the pandemic and looming holiday season, Operis mobilised its team and built on the work completed at the bid stage to ensure a smooth closing process.

CONTACT US

Please get in touch with either of our regional offices.

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Erwan Fournis
Global Head of Financial Advisory

+44 207 562 0444

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Carmen Wade
Financial Advisory, Head of North America

+1 647 243 3840

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Jun Tao
Global Head of Model Audit & Financial Modelling

+44 207 562 0428

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Mark Southall
Associate Director - Model Audit & Financial Modelling

+1 647 846 7384

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Operis Europe

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Operis North America

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+1 647 846 7382
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CONTACT US

Discuss your requirements with us

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Erwan Fournis
Global Head of Financial Advisory

+44 207 562 0444

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Chris Aldred
Director

+44 207 562 0433

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