Project Details

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Results Chart for Delivery Method and Financing

Delivery Method

DBFOM All Private Finance
# of Projects: 1
100% of the Results

Background informationProject Created: May 11, 2011

Project Name: Royal Children's Hospital
Year in Operation: 2011
Sector: Buildings
Subsector: Health Care Facility
Status: In Operation
Type: Substantial Alteration of Existing Facility
Description: The project is the largest hospital redevelopment project to be initiated by the State of Victoria. The old and existing facilities are no longer suitable for the high technology and multidisciplinary care that is now being provided to children. It entails the construction of a new facility adjacent to the northwestern boundary of the existing site. The design will retain the existing research precinct building and front entry building.
Delivery Method as described in the country where it's located: Public Private Partnership
Is the project still active: Yes
Comments: The contract is a Design-Build-Finance-Maintain contract with a 25-year maintenance term

Project Locations

Address: 50 Flemington Road
City: Parkville
State: Victoria
Country: Australia, Commonwealth of

Souces of Project Support (Non-monetary)

Checkbox Checked Land: The project will be constructed on existing land owned by the State. The concessionaire is required to construct the new facilities on less than 4.1 hectares, the current area serving the hospital. The land area saved will be reinstated to the surrounding Royal Park.
Checkbox Checked Access to Land: At all times, the State will own the Royal Children’s Hospital. However, the concessionaire will be granted an exclusive construction license during the design and construction phase and a lease to the site over the 25-year maintenance term.
Checkbox Checked Revenue Stream (Cash Flow) Created Through Initial Commitment of Public Sponsor(s): The concessionaire will receive quarterly service payments (QSP) from the State after the project is fully operational and commissioned. The payments are subject to deductions for service failures consisting of two categories: 1) the potential to impact the availability or use of the facility by the State, and 2) those that relate to the process and procedural requirements of the contract.
Checkbox Checked Revenue Stream (Cash Flow) Protected Through Long Term Commitment(s) of Public Sponsor(s): The concessionaire is entitled to pursue certain agreed upon commercial activities in defined areas within the new facility. The revenue streams from these opportunities have been valued by the concessionaire and will deduct the cost of the payments the State is required to make.
Checkbox Checked Environmental Clearance: The project incorporates various Environmentally Sustainable Development (ESD) initiatives that go beyond the State’s minimum requirements. These include CO2 reduction initiatives, 2.8MW tri-generation plant providing base load electricity, heating and cooling and a blackwater treatment plant that will provided approximately 100,000 liters of water per day in excess of that required for the hospital that may be used for irrigation on Royal Park and Melbourne Zoo.

Souces of Project Support (Monetary)

Checkbox Checked

From Private Capital Markets Directly to Producers as Debt: The PPP concessionaire has arranged for the involvement of a number of financiers to raise funds to cover the costs of the project. The majority of the funding will be raised from the issue of bonds into the capital market. Proceeds will be placed in a deposit account managed by the concessionaire until required. Senior debt (71% of funding sources) is comprised of underwritten CPI Indexed Annuity bonds and subordinated debt (3.8% of funding sources) is an underwritten inflation linked indexed annuity.

Checkbox Checked

From Producers as Equity: Babcock and Brown International Pty Ltd is the private party underwriting the equity requirement for the concessionaire. Preferred equity (16.3% of funding sources) is expected to be refinanced 13 years from financial close. Ordinary equity comprises 4.3% of the funding source.

Project Delivery & Finance Method

Project Delivery:
All Public Finance. Public Sponsor contracts for initial design, and separately contracts for initial construction. Public Owner operates and maintains the resulting facility.
Is there an independent checking engineer? Yes
Project Finance Method: All By Private Sponsor

Procurement Approach

Project Component
Qualifications
Based Selection
Request for
Qualifications
Request for
Proposals
Invitation
for Bids
Unsolicited
Proposals

Term for Key Components & Forms of Contract

Project Component
Years
Quarters
Combined Term: Initial Design, Construction, O&M Period
28
2
Forms
Description
Other
Custom Document: Lawyer drafted agreement (Clayton Utz)  

Project Value (If and As Known)

Date of Estimated Project Value: May 11, 2011
Project Value
Hard Cost
Hard & Soft Costs
Construction
$250 Million - 1 Billion US
(none)
Operations & Maintenance
< $200 Million US
(none)
Total
$500 Million - 2 Billion US
(none)

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