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September 4, 2018

Gordie Howe bridge cost to top $3.46 billion

 

The consortium of infrastructure companies that will construct the Gordie Howe International Bridge are assuming a fixed cost of more than $2.68 billion to build what will become North America’s largest cable-stayed bridge over the Detroit River.

The Canadian government will subsidize $2.12 billion of the cost through monthly “progress payments” during the 74-month construction of the bridge, according to a credit-rating report published Wednesday by S&P Global Ratings.

The Wall Street credit-rating agency assigned a preliminary rating of A- and a stable outlook to $351.5 million in medium and long-term bonds the Bridging North America General Partnership consortium of companies plans to sell to finance its share of the construction costs.

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S&P’s report said Bridging North America General Partnership will finance construction of the bridge through $806.7 million ($1.04 billion Canadian) in bonds and construction loans and the $2.12 billion ($2.74 billion Canadian) in “progress payments” from the Windsor-Detroit Bridge Authority, a Canadian crown corporation.

The total design and construction cost of $2.68 billion comes out to $3.46 billion in Canadian dollars, with nearly 80 percent being subsidized by the government of Canada.

S&P analysts called the WDBA an “irreplaceable” component to financing the project.

” In our view, the (Canadian) government’s commitment under the funding agreement falls short of the requirements of our guarantee criteria,” S&P analysts wrote in their credit report. “However, we believe it strengthens the link between WDBA and the (Canadian) government, lifting WDBA’s credit profile above what it otherwise would be on a stand-alone basis.”

Michigan taxpayers are not contributing a dollar to the infrastructure project under an agreement Gov. Rick Snyder forged with Canadian leaders in 2012.

Keep reading in Crain’s Detroit Business

 


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