Ferrovial - Annual Report 2012


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Toll roads

Performance in the year

Cintra’s strategy is focused on growth, through both winning new concessions and efficiently managing the existing project portfolio.

New projects

The competitive environment in which Cintra operates has undergone a substantial change in recent years as a result of the financial and economic crisis affecting most countries.

However, the current market situation also provides opportunities for furthering Cintra’s growth strategy. The public finances of most of its traditional markets have been affected as a result of lower tax revenues and increased expenditure. Governments are therefore looking for public-private partnerships as a way of developing new projects. This will probably lead to an increase in tendering activity over the coming years.

In these conditions, governments will use infrastructure projects as one of the ways of boosting economic activity. Projects will be more financially sound and better structured, with a more efficient spreading of risks.

In this context, Cintra has continued with its strategy of incorporating new concessions with availability payment schemes, which had not been a traditional model for the company. This model has been used for the following contracts granted to the company: the 407 East Extension in Canada, a toll road that extends the 407 ETR eastward; the Benavente-Zamora toll road, which completes the Ruta de la Plata; and the Almanzora Highway or A-334, which aims to turn this area into a strategic hub between the Levante area, the north of Granada and Almeria.

Elsewhere, the opening of new offices in Sydney and Bogota confirm Cintra’s interest in the Australian and Latin American markets. From there, Cintra will develop more concession projects and take part in all the opportunities that meet its investment criteria.

USA and Canada

Cintra still sees the United States as an attractive market. Despite the need for new investments to extend capacity and renovate the existing infrastructure, the development of this market is hindered by a lack of public funds, political support or clear target population. Furthermore, many public authorities are using the Design & Build formula as a model to promote some of the projects, and ignore the added value that the private sector provides when it manages the assets. As states, Texas and Virginia remain the most developed markets in the country.

In Virginia, the Virginia Department of Transportation (VDOT) awarded Ferrovial Agroman the construction of the US460 highway as part of a consortium with American Infrastructure. Cintra headed up the bidding process for this project, whose financial close took place on December 20, 2012.

Cintra is also taking part in other bidding processes in Indiana, Colorado, North Carolina, Florida and California.

In Canada, Cintra has been awarded its first availability project in North America, the 407 East Extension toll road in Toronto, which is an important project for the future growth of the 407 ETR.


Two availability payment projects have been awarded in Spain: the A66 or Benavente-Zamora, promoted by the Ministry of Public Works; and the A334 or Almanzora Highway, promoted by the Regional Government of Andalusia. In both cases the concession contract has been signed and the financial close should take place in 2013, despite the uncertainty caused by the financial crisis.

In Europe, another of Cintra’s traditional markets, there have been few opportunities in 2012. In spite of this, Cintra continues to search for profitable growth opportunities in markets such as the United Kingdom and Holland.

Other Markets

Cintra expects the opening of the new business development offices in Sydney and Bogota to give it access to new investment opportunities, as the two markets of Australia-New Zealand and Latin America have the biggest growth potential in the toll road sector over the coming years. Specifically, in Colombia the Government has announced an ambitious concession program involving investment of more than $ 20,000 M over the next 7-8 years.

Prospects for 2013

The consequences of the financial and economic crisis can be summed up as a tightening of liquidity coupled with more expensive own and third-party financing.

However, the current financial conditions also present opportunities, as reflected in asset prices, and the soundness and profitability of new projects.

Additionally, financial leverage will be more limited, so Cintra will increase future upsides once the financial markets return to normal.

To sum up, the new economic situation should lead to an increase in tender activity.

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This is an electronic version of the 2012 Annual Report prepared by Ferrovial, S.A. for its stakeholders, which aims to be complete and accurate. The contents of this version can be checked by referring to the print version. A copy of the print version in PDF format is available to download on this web page