Infrastructure Concession and Toll Road Model

The model is an availability-payment concession: the authority pays a unitary charge for each year the asset is available to specification, so there is no volume risk. The base unitary charge is the model's single calibration input, not an observed market figure.

• It is back-solved so that the payment covers construction, senior debt service, operating and lifecycle costs, tax and handback, while still delivering a market equity return. The charge is split 65/35 between an indexed portion escalated at CPI and a fixed portion, which is the structural source of the SPV's inflation exposure.
• Deductions for availability and performance failures reduce the gross charge, subject to a contractual annual cap. Third-party income is modelled only as a small ancillary stream, net of an authority revenue share.

Construction is modelled as a real three-year build using an input S-curve of 20, 45 and 35 per cent, with two spare slots. The cost stack includes EPC milestones, contingency, development fee, owner costs, insurance, advisory and legal fees.

• Financing costs are expressed as coefficients per dollar of facility, which lets the model solve the senior facility algebraically in one step rather than iterating. The facility must fund its own arrangement fee, commitment fee, interest during construction and debt service reserve.
• Two sizing legs are compared: a gearing cap and a DSCR capacity test, with the binding constraint reported. The deal is leverage-constrained at the shipped inputs.

A funding-order switch selects pro-rata or equity-first drawdown.

Operating costs cover hard and soft facilities management, SPV management, insurance and a final-year handback survey. Soft FM is subject to market testing at operating years five and ten, which steps up its cost, and it escalates at wage inflation above CPI; this is the main source of margin decay across the concession.

• Tax is a genuine computation with interest deductibility and loss carry-forward, plus a separate unlevered tax stream for project returns. CFADS is EBITDA less tax payable, excluding lifecycle capex, because the debt service reserve and lifecycle reserve fund those events.
• A strict waterfall then pays senior interest and principal, funds reserves, services the shareholder loan subject to a cash gate, and distributes to equity only if the lock-up test passes.

The model reports project and equity IRR, NPV, multiple and payback from financial close. The equity return stream combines ordinary equity and shareholder loan contributions as outflows during construction with distributions, shareholder loan interest and principal as inflows during operations.

• Three cases are switchable: Base, Downside and Lender, changing CPI, deductions, lifecycle overrun and operating cost overrun; the deduction cap can bind in the Downside case. Two-way data tables on equity IRR flex gearing and senior rate, and CPI and availability deductions.
• The Checks sheet holds 21 integrity tests against named thresholds. The underlying model is suited to evaluating an availability-payment social infrastructure PPP, not demand-risk toll roads.