Sustainability at work – 2014 Report

Infrastructure concession investments

Capital: Creating Value

Capital is the name of our investment and asset management group. It plays an important role in building sustainable investments. Capital’s objectives are to increase our investment activities in our four sectors, provide equity and debt solutions to finance projects, and manage our multi-billion-dollar portfolio of infrastructure investments. In this way, Capital incorporates our former Infrastructure Concession Investment (ICI) activities.

In essence, Capital helps create projects that are economically viable and generate both sustainable value and a positive social impact.

An integrated, proactive asset developer and manager

Our Capital experts work internally across our sectors and externally with strategic financial partners to proactively develop new business and investment opportunities. Capital integrates and expands our full life-cycle asset management capabilities. It reinforces our global reputation as a partner of choice for large, complex projects such as our highly successful public-private partnerships (P3s) in Canada.

Focused on value

Capital strategically monetizes our assets to maximize return on equity for SNC-Lavalin. It seeks to generate enhanced value by enabling new projects in our four sectors and optimizing their life cycles. It also strengthens our focus on first-class asset management and on structuring investments to earn a return on capital in line with each project’s risk profile.

Through Capital, we invest wisely to create value for all involved. We monetize mature assets, redeploy funds and provide access to new sources of development funding and equity. Cross-sector project financing teams target projects with direct engineering, construction and operations and maintenance opportunities.

End-to-end capital investment services

Our investment capabilities are a key competitive differentiator and an important part of our corporate strategy. Capital enables us to leverage this differentiator and offer the full spectrum of capital investment services across our four strategic sectors.

Our Capital services include:

  1. Working with the four sector teams to develop projects and country/region-specific strategies as well as identify, assess and create development and equity investment opportunities.
  2. Developing value-enhancing portfolio management strategies, building relationships with external funders, assessing potential financial partners, and providing sustainable financing and contractual structures.
  3. Providing long-term forecasts and state-of-the-art financial modelling services, developing optimal financing solutions for new and existing deals, and helping model and simulate calculations for credit facilities and return on investment.
  4. Developing and deploying full life-cycle asset management systems and processes, overseeing project progress (including their operations and maintenance) and asset performance, developing strategies to improve returns, and fostering productive stakeholder relationships.

Our Capital expertise in action

Here are some examples of how we continue to build sustainable value through our investment and asset management expertise.

is thAchieving near-perfect customer satisfaction In 2009, we delivered Canada’s first major rapid rail project under a public-private partnership on budget and 110 days ahead of its aggressive 51-month schedule. We’ve been operating and maintaining Vancouver’s 19.5-kilometre Canada Line ever since. Canada Line was the first light rapid transit (LRT) line to link the downtown core of a Canadian city with an international airport. Today the line exceeds original ridership expectations. It quickly and efficiently transports 120,000 passengers every weekday. It also takes thousands of cars off the road, eliminating 16,800 tonnes of greenhouse gas emissions annually. As of March 2016, the Canada Line has maintained an average system availability of 99.9% since its inauguration. Toronto’s largest transit expansion In 2015, the Ontario government selected our consortium Crosslinx Transit Solutions General Partnership to design, build, finance, maintain and rehabilitate the Eglinton Crosstown LRT line. The 19-kilometre rail corridor includes 10 kilometres underground and 25 stations and stops along a major artery. The project will ease traffic and congestion, move people up to 60% faster than existing bus services and handle more than 10 times as many passengers. It will also create thousands of jobs. Crosstown is Canada’s first transit project to receive green bond funding for environmentally friendly infrastructure. This ‘first’ earned it a 2015 Gold Award in project financing from the Canadian Council for Public- Private Partnerships (CCPPP). Crosstown service will begin in 2021. State-of-the-art pediatric care facility On September 30, 2015, we proudly handed Shriners Hospitals for Children® – Canada the keys to its beautiful new hospital in Montreal. We completed the state-of-the-art hospital and research facility three months ahead of schedule while meeting rigorous design and construction quality standards. We also delivered it below the Guaranteed Maximum Price (GMP) budget. Our close client partnership and dedicated project team drove this success. The hospital’s opening marks a new era in Canadian pediatric orthopedic care. Twice the size of its predecessor, Canada’s Shriners Hospital will continue to be a world leader in treating complex bone and neuromuscular conditions. “Thanks to the dedication, commitment and hard work of SNC-Lavalin, we succeeded in obtaining substantial completion several months in advance and under budget. I hope to have the opportunity of working again together on another of our hospital projects soon.” – Jerry G. Gantt, Chairman of the Board of Directors, Shriners Hospitals for Children Changing Montreal’s skyline Every year, some 50 million vehicles cross Montreal’s Champlain Bridge. In 2015, the Canadian government chose Signature on the Saint-Lawrence Group to replace this important aging gateway. As the partnership’s major equity partner, we’ll design, build, finance, operate, maintain and rehabilitate the Champlain Bridge Corridor. The 8.4-kilometre highway corridor is one of North America’s largest infrastructure projects. It includes a new 3.4-kilometre Champlain Bridge, designed to last 125 years and opening on December 1, 2018, as well as a new 470-metre Île-des-Soeurs Bridge. Our team developed innovative and environmentally sound solutions to meet the project’s challenging schedule while creating an iconic structure that will enhance Montreal’s skyline for decades to come. The New Champlain Bridge Corridor Project received a CCPPP Gold Award for effective procurement in 2015.