McGuinty announces $1B extension of Highway 407
Published Thursday, May 24, 2012 6:57PM EDT
WOODBRIDGE, Ont. - Drivers in the Toronto area will have a new route reaching east of the city, but it's expected to be more than three years before the new toll road is built.
Work will begin this fall on the long-promised extension of Highway 407 East, a 22-kilometre stretch from Brock Road in Pickering to Harmony Road in Oshawa, Premier Dalton McGuinty said Thursday.
The extension will be owned by the province, but drivers will still have to pay to use the route that runs north of the city, he said.
"We'll set the tolls, we'll set the service standards and we'll collect those revenues to benefit Ontarians themselves," McGuinty said during a visit to the 407 ETR maintenance yard.
"We'll consult with Ontarians. I can assure you that they will not be higher than the 407 ETR tolls. We hope that they'll be lower, but I'm not making a commitment in that regard at this point in time. But we want to ensure that they are reasonable."
The current rates for using the existing 407 range from 19 cents per kilometre during evenings and weekends to 25 cents during prime hours.
The project will create 900 direct construction jobs and thousands of spinoff jobs, McGuinty said.
Construction is expected to be finished by the end of 2015. The second phase of the project, extending the 407 further east to Highway 35/115, should be completed by 2020.
The contract, which is valued at $1.6 billion, has been awarded to SNC-Lavalin (TSX:SNC) and Cintra Infraestructuras SA.
The consortium will receive annual payments from the province over 30 years to cover the costs of designing, building and maintaining the road, the government said.
The two companies are part owners of 407 International Inc., which operates the existing 108-kilometre toll road under a 99-year lease. Canada Pension Plan Investment Board owns a 40 per cent stake in the company.
The previous Conservative government decided in 1998 to privatize the 407 in a $3.1-billion deal.