Bank of China contributes to a $1.65 billion AUD syndicated loan for the West Gate Tunnel PPP 2019 Refinancing Project

Project narrative

On November 8, 2019, financial close was reached on a deal in which a syndicate of at least nine banks — including the Bank of China (BOC) — had entered into a $1.650 billion AUD ($1.13 billion USD) corporate syndicated bank debt facility agreement with Transurban Finance Company Pty Limited — a wholly owned subsidiary of Transurban Holdings Limited and the financing vehicle for the Transurban Group — for the West Gate Tunnel Public-Private Partnership (PPP) 2019 Refinancing Project. The facility consisted of two tranches: a $825 million AUD tranche with a maturity period of three years and maturity date in November 2022 and a $825 million AUD tranche with a maturity period of five years. This corporate facility was secured by (i.e. collateralized against) first ranking charges granted by Transurban Finance Company Pty Ltd, Transurban Finance Trust, Transurban Holdings Limited, Transurban Holding Trust, Transurban International Limited, and Transurban Limited. The proceeds of this facility were used by the borrower to refinance an existing facility, to fund the construction of the West Gate Tunnel, and for general corporate purposes. Record ID#97492 captures BOC's contribution. In addition to BOC, the following lenders contributed to the loan syndicate: Australia and New Zealand Banking Group (ANZ), Bank of America, Bank of Nova Scotia (Scotiabank), BNP Paribas S.A., Canadian Imperial Bank of Commerce (CIBC), Citigroup, Commonwealth Bank of Australia (CBA), Goldman Sachs, and HSBC Bank PLC. On April 14, 2021, financial close was reached on a deal in which a syndicate of 19 banks — including BOC — entered into a $1.000 billion AUD ($766.33 million USD) syndicated loan agreement with Transurban Finance Company Pty Limited for the West Gate Tunnel PPP 2021 Refinancing Project. This loan carried a maturity period of 2.5 years and a final maturity date of October 14, 2023 and was a new tranche of the November 2019 $1.650 billion AUD syndicated loan, raising the syndicated bank debt facility's face value to $2.650 billion AUD. This corporate facility was secured by first ranking charges granted by Transurban Finance Company Pty Ltd, Transurban Finance Trust, Transurban Holdings Limited, Transurban Holding Trust, Transurban International Limited, and Transurban Limited. The proceeds of this loan were used by the borrower to refinance the West Gate Tunnel, formerly known as the Western Distributor, a 5-kilometer long roadway connecting the WestGate Freeway at Yarraville to the Port of Melbourne at Dockland in the State of Victoria. Record ID#93864 captures BOC's contribution. On April 22, 2022, financial close was reached on a deal in which a syndicate of 17 banks — including BOC — entered into a $825.00 million AUD ($605.71 million USD) syndicated revolving loan agreement with Transurban Finance Company Pty Limited for the West Gate Tunnel PPP 2022 Refinancing Project. This revolving loan, known as 'Tranche D', carried a maturity period of five years and a final maturity date in April 2027. This corporate facility was secured by first ranking charges granted by Transurban Finance Company Pty Ltd, Transurban Finance Trust, Transurban Holdings Limited, Transurban Holding Trust, Transurban International Limited, and Transurban Limited. The proceeds were to be used by the borrower to refinance the $825 million AUD tranche from November 2019 maturing in November 2022 used for working capital purposes and for the West Gate Tunnel PPP Project. Each lender including BOC, contributed $48.53 million AUD ($35.63 million USD) to the loan syndicate. Record ID#107738 captures BOC's contribution. The purpose of the $6.7 billion AUD West Gate Tunnel Project was to expand the West Gate Freeway in Melbourne, Victoria via the construction of a 5-kilometer long toll road consisting of twin six-lane 1.5-kilometer long tunnels under Yarraville linking it to Footscray Road, a bridge over the Maribyrnong River, a 2.5-kilometer elevated road from Footscray Road to the Port of Melbourne, 14-kilometer of walkway and cycling paths from Werribee to Melbourne, and the expansion of the M80 Ring Road to the Williamstown road section of the West Gate Freeway from eight to 12 lanes. The project had direct link to Hyde Street, Swanson, Appleton, CityLink, and the inner northern suburbs, had an extended Wurundjeri Way to provide a city bypass. There was also a new freeway management system and noise walls. The project was intended to serve as a substitute connection to the West Gate Bridge with direct access to the port, reducing travel time and traffic congestion. CPBJH JV, a joint venture of John Holland and CPB Contractors, was the contractor responsible for project implementation. A joint venture between Jacobs Engineering Group and Aurecon was contracted by the John Holland-CPB Contractors consortium to provide the engineering design. Construction was planned to be completed in 2022. Construction began in 2018. As of June 2023, it was ongoing. As of March 2025, completion was expected for late 2025. The project experienced heavy controversy, delays, and cost overruns. Transurban had proposed the project to the government in 2015 with a fixed cost of $6.7 billion AUD and completion date of 2022. After construction contracts were signed, Victoria’s Environment Protection Authority introduced new policies on the handling of per- and polyfluorinated alkyl substances (PFAS), which increased soil disposal costs and halted tunneling. Transurban blamed those increased costs on the rise in cost of the project, as Transurban, John Holland and CPB Contractors, and the Government of Victoria argued who should pay to finish the road amidst the delays to find waste sites to take the toxic soil, with the complex contract structure leading to court action and legal arbitration. However, the State Government of Victoria laid blame on Transurban, accusing it of deflecting with the PFAS costs to hide the fact that it had "massively underbid" the West Gate Tunnel Project. The project, originally costing $6.7 billion AUD, would now cost $10 billion AUD, with the $3.4 billion AUD in additional funding divided between Transurban and the State Government of Victoria. The project was now to be expected to be finished in 2025.