BAM: Financial structure

Upon the creation of BAM, the Flemish Region invested 100 MIO EUR of its own capital in the company. In March 2004 the share capital was increased by 100 MIO EUR, while a further increase of 129 MIO EUR was decided by the Flemish Government in March 2007.

The shares and retribution rights of Tunnel Liefkenshoek (TLH) were incorporated in BAM in July 2004, in compliance with the BAM decree. In addition the receivable of the Flemish region on TLH was contributed to BAM in November 2004.
Subsequently BAM successfully completed the securitisation and private placement of this receivable on TLH. The private placement with institutional investors resulted in proceeds amounting to 193 Mio EUR. BAM intends to use the funds obtained to fund its own stake in the projects of the Master Plan Antwerp.


On 27/04/2004 the Flemish Government also decided to incorporate the Kennedy-tunnel in BAM. 

BAM's capital amounts to 822.2 Mio EUR.

The focus is on:
- ESA 95 neutrality (financing may not influence regular budget; see European System of Accounts).
- Optimal WACC (weighted average cost of capital)
As low a financing cost as possible and accurate risk allocation.
- Financially feasible projects with added value for all stakeholders. 

Continental European Finance Model 
BAM wishes to rely on integrated contracting in calling for tenders for its projects. It involves a long-term contract, whereby the contractor is not only responsible for the design, construction and part of the (pre)financing, but also guarantees the maintenance of the project during its entire life cycle. That is why the contractor is not only responsible for the construction in the short term, but also for the optimal quality of the infrastructure in the long term.

The main principles of this DB(f)M construction (Design Build finance & Maintain) are based on:

• risk allocation: risks are borne by the parties that are most suitable. It is the most cost-efficient way of guaranteeing high quality. Furthermore, until implementation a maximum of 80% of total costs is to be paid for the performance of the work based on progress. The remaining minimum 20% will be spread over an agreed maintenance period.
• Price-quality ratio is an essential part of the award, in addition to reliability, financial-economic capacity and technical competence. 
• The contractor will not only be responsible for the smooth execution of the contract, but also for the quality of the infrastructure during the entire life cycle.

For more info about the project financing of the Oosterweel-link:

In June 2005 the Board of Directors of the European Investment Bank granted approval, in principle, of a EUR 700 million loan to BAM for financing the Oosterweel Link.

In the meantime there have been further negotiations with the European Investment Bank on its participation in the financing of the Metropolitan Mobility projects.

The total estimated Masterplan 2020 investment amounts to more than 5 bio EUR, of which 3 bio EUR is being realised through BAM. Compared to 2004, the amount has increased because of additional infrastructure projects for a sustainable solution for a better mobility, livability nad road safety.  For full details please see 'Projects'.

Roads 
The road works comprise the Oosterweel link. It forms part of the DBfM contract which is being negotiated with Noriant. A Design Sign Off for 2.2 bio EUR has been signed with Noriant, excluding the financing cost . A number of additional projects have been added to the project: the Kattendijk lock and river Schijn, as well as a number of green projects on the left bank (Middenvijver, Burchtse Weel, Sint-Annabos).
 
Waterways
A budget of 308 mio EUR for waterway projects has been defined. Of that budget 180 mio EUR is being used for the bridges across the Albert canal, between Straatsburgdok and Wijnegem. The remaining amount is allocated to the renovation of the Van Cauwelaert lock and the Royers lock.

Public Transport
A number of public transport projects, with a total budget of 400 mio EUR, is being realised through a cooperation between De Lijn, AWV and BAM. These projects are being tendered in two separate parts (brabo 1 and brabo 2) in different DBfM contracts. 

Soft road users
The Masterplan also addresses the safety of soft road users by means of separate and safe cycling and foot paths.The Flemish Government budgetted 12.4 mio EUR for these projects.