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Ferrovial - Integrated annual report 2013 / 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 now as a way of developing new projects. This has led to an increase in the number of tenders in the past two years.

Governments are using infrastructure projects as a way of boosting economic activity. Projects are now more financially sound and better structured, with a more efficient spreading of risks.

In 2013 Cintra continued to focus its strategy on growth, and was awarded its first project in the United Kingdom, the M8 M73 M74 Highway Improvements project to extend and improve the highways in Central Scotland. It also achieved financial close for two projects: sections 3A and 3B of the NTE highway, a project called NTE 35W, in the metropolitan area of Dallas/Fort Worth (Texas); and the A-66 highway between Benavente and Zamora (Spain), which completes the Ruta de la Plata.

North America

There has been an upturn in public-sector development projects in North America, mainly because of lack of resources to take on new projects due to the deficits incurred in recent years. For this reason, Cintra still sees the United States as an attractive market. Despite the need for new investment to extend capacity and renovate the existing infrastructure, the development of this market is hindered by a lack of public funds. Nevertheless, thanks to the increasing popularity of the concession model, there have been more opportunities this year.

Texas, Virginia and Florida continue to be the most developed markets among US states, followed by Indiana, California and Colorado. Cintra is also taking part in bidding processes in North Carolina, Texas, Illinois, Indiana and Ohio.

In September, Cintra achieved financial close for the NTE 35W, that is, sections 3A and 3B of the North Tarrant Express highway in the metropolitan area of Dallas/Fort Worth, in Texas. Investment for the project stands at 1.338 billion US dollars. This milestone confirms that the financial markets trust Cintra.

In Canada, Cintra is taking part in the tendering process for the second stage of the 407 highway extension in Toronto. This availability project is important for the future growth of the 407 ETR and the first 407 East extension.

In recognition of its work in the United States, last year the company was named North American Infrastructure Developer of the Year by Infrastructure Investor magazine.


As regards Europe, in August 2013 Cintra was awarded the M8 M73 M74 Highway Improvements project to extend and improve the highways in Scotland. The financial close is scheduled for the first months of 2014. In Scotland the company is working on the bid for the Aberdeen Western Perimeter Route project. The tender for this project will conclude in the middle of next year.

It is also looking at certain markets where opportunities are expected in the short and medium term, such as Holland and Ireland. In Ireland, Cintra has been shortlisted in two availability payment projects. The tender will decided on in 2014.

Other markets and sectors

As for other markets, most of the company’s activity takes place in some Latin American countries, mainly Colombia and Peru, and there are specific opportunities in Chile and Brazil as well. Cintra’s Colombia office has been shortlisted in ten of the tenders announced so far by the country’s national infrastructure agency, Agencia Nacional de Infraestructuras (ANI).

In Australia the PPP market is showing positive signs of growth, after a slowdown that has lasted almost a decade. Cintra opened its office in Sydney over a year ago, with the aim of promoting PPPs. Thanks to this strategy, in 2013 the company was shortlisted for Australia’s major PPP road project, the East West Link in Melbourne.

As for the water sector, various long-term concession opportunities have been analyzed in the US and in Latin America.

Cintra continues to analyze new countries and sectors. The basic aim of this ongoing monitoring is to explore new investment opportunities and not to reject potentially interesting markets a priori, although without sacrificing the basic investment principles that have been followed to date.

The company is exploring the market and looking for opportunities both in greenfield and brownfield projects, mainly in the states of New South Wales, Victoria and Queensland, as well as in New Zealand, where the government is starting to use PPPs to develop infrastructures.

Prospects for 2014

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 there will be upsides for Cintra 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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Management of the project portfolio

The recovery of traffic in the United States and Canada was confirmed in 2013, even though the impact of the economic crisis on traffic is serious in other markets.

Of particular note is the strength of the most representative asset: the 407ETR toll road in Canada, which has improved its sales and EBITDA (9.2% and 9.3% respectively in local currency) and which is accounted for by the equity method. These results are the consequence of the toll hike and traffic improvement (up 0.7%), thanks to the longer average distance covered by travelers. As a result, dividends received from the 407ETR have increased substantially (13.3%) to 294 million Canadian dollars.

In the United States traffic on the Indiana Toll Road has recovered, especially heavy vehicles.

Cintra has continued to manage the projects in its portfolio actively, including those under construction and those in operation, with the aim of optimizing management efficiency and improving the quality of the service provided. As a result, the portfolio remains a contributor to the company’s growth.

In 2013 mobility increased in North Texas when the 5-kilometer-long East section of the LBJ Express was opened to traffic on December 14. Cintra will manage this road for the next 50 years.


As regards financing activity, and in spite of the ongoing turmoil in financial markets in 2013, three operations are particularly notable.

First, the financial close for sections 3A and 3B of the North Tarrant Express highway in the metropolitan area of Dallas/Fort Worth in September, for approximately 1.338 billion US dollars. Second, the financial close in Spain for the A-66 highway, between Benavente and Zamora, with an investment of around 200 million euro.

At the end of 2013, Cintra reached an agreement to restructure the Greek highways Nea Odos and Central Greece, which are currently blocked because of the country’s default and subsequent bailouts. Under the agreement, Cintra will continue to hold capital in both projects, but will be released from all commitments to make future contributions and from all guarantees provided to date.

This confirms the market’s interest in quality assets, as well as the capability and experience of Cintra’s human capital.