Serco Group plc (Serco), the international services company, today announces that it has reached financial close for the contract to provide Driver Examination Services for the Ontario Ministry of Transportation (MTO). The contract will see Serco continue to provide these vital services in a ten-year partnership with estimated revenues to Serco of approximately C$500m over the contract term.
Serco has been supporting MTO since 2003, and will continue to provide the full spectrum of services including application processing and the delivery of vision, knowledge and road testing across all license categories. Serco will be responsible for overseeing approximately 575,000 knowledge tests and 675,000 road tests on an annual basis at 95 testing centres across Ontario. Under the new contract, Serco's role will expand to include upgrading and enhancing information technology solutions to improve processing, scheduling and the delivery of services to drivers.
Serco's bid was developed in partnership with Plenary Group, a leading specialised developer of long-term Public-Private Partnership (PPP) and Alternative Financing and Procurement (AFP) projects, who have over C$6bn in project capitalisation across Canada. For the new partnership, Plenary Group is the developer, equity investor and debt arranger for the project. In this capacity, Plenary Group has made significant financial commitments to guarantee the consortium's service delivery performance for the concession term. This new structure of direct customer financing replaces Serco's previous use of cash resources and debt facilities to finance the partnership.
Christopher Hyman, Chief Executive of Serco Group plc, said: "We are delighted to be continuing to support the Ministry of Transportation to ensure road safety in Ontario and across Canada. Together with our recent award of the significant new contract to provide traffic management services in Virginia, Serco is demonstrating its international skills in the transportation market and our commitment to high quality and efficient services for our customers. We are making excellent progress in our strategy to further diversify Serco's Americas portfolio."