Istanbul Straits Road Tunnel, Turkey
Location: Istanbul, Turkey
LeighFisher supported the Preferred Bidder for the Istanbul Straits Road Tunnel throughout the 3-year procurement process to successful financial close in December 2012. We provided road traffic and revenue forecasts to support the the Bidder's negotiations with local planning authorities and potential funders.
Istanbul is a city of 13.5 million inhabitants spanning two continents separated by the Bosphorus straits, one of the world’s busiest shipping lanes. With a rapidly growing population and strong economic growth, demands on the City’s transportation network exceed capacity on key routes for much of the working day. This is particularly the case across the Bosphorus where two road bridges and a limited ferry service, serve traffic between the European and Asian parts of the City. With 400,000 vehicles crossing these bridges each day, they now operate at capacity. Putting this into perspective, the daily volumes crossing these bridges are twice those on the busiest sections of the New Jersey Turnpike, from the same number of lanes, and three times those on London M25 orbital motorway. The Istanbul Straits Road Tunnel project is US$1.4 billion tolled tunnel that will provide two traffic lanes in each direction and increase highway capacity across the Bosphorus through a 5.4-kilometer tunnel with 9 kilometers of approach motorways.
After a detailed and demanding Public-Private Partnership competition, our client, the Turkish-Korean ATAS consortium, was selected as the Preferred Bidder. Our support included constructing the only detailed traffic forecasting model of the Istanbul region outside the City’s planning authority for use in extensively testing the project’s traffic and revenue over a 30-year concession period under various land use, demographic, transport, and economic scenarios. Our forecasting model has provided key inputs into the Sponsor’s and Lender’s financial modelling of the concession.
Our road and highway commercial due diligence and support in the consortium’s negotiations with local planning authorities and potential funders led to the project being fully funded – via a mix of multilateral and commercial bank loans and Sponsor’s equity, with revenues to come from user tolls and Grantor revenue guarantees – all this despite the difficult funding environment following the financial crisis.
- Through road traffic and revenue foreasting, we constructed the only detailed traffic forecasting model of the Istanbul region outside the City’s planning authority
- The model being used in extensive testing of the project’s traffic and revenue over a 30-year concession period
- Supported the consortium in successful negotiations with planning authorities and funders