The Spanish firm that owns and operates Highway 407 will help manage a $1 billion eastern extension of the controversial toll road.

Unlike the current 407, however, the extension will be publicly owned, though privately operated. The province will set toll rates and keep all revenues, according to a statement from Ferrovial, the parent company of Cintra Infraestructuras.

The contract is a 50/50 joint venture between Montreal-based engineering firm SNC-Lavalin and Cintra, to design, build, finance and maintain the first phase of the new 407 East.

Cintra is a majority shareholder in 407 ETR, the company that maintains the current 108-kilometre 407. It has the authority to set toll rates and ensure that drivers who don’t pay their fines are denied a licence plate renewal sticker by the Ministry of Transportation — a policy that has become a focal point for angry commuters.

If commuters don’t pay their tolls on the new 407 East, the province will still deny licence plate renewal stickers, according to provincial legislation, which also says the province will set an initial toll rate. After that, the toll will be automatically adjusted each June 1 by the percentage change in the consumer price index.

Premier Dalton McGuinty is expected to make an announcement about the extension Thursday morning. Imposing tolls on a publicly owned highway is an about-face for McGuinty, who in 2007 said, “I’m personally against tolls, and we’re going to make sure we have the kind of financing package in place that eliminates the need for tolls.”

The 407 ETR has been accused of predatory billing practices and has been subject to legal challenges from bankrupt individuals who have not been able to renew their licence plates and feel that under the bankruptcy laws, they shouldn’t have to pay their old bills.

Phase one of the new highway will extend 22 kilometres east from Brock Rd. in Pickering to Harmony Rd. in Oshawa. It will also include a 10-kilometre north-south highway, east of Lakeridge Rd., connecting the 407 East to the 401. That spur will also be tolled.

It is expected to take 3 ½ years to design and build the road. Once completed, the partnership will maintain and rehabilitate the road for 30 years.

The arrangement is similar to that of the Canada Line in Vancouver, where the TransLink transportation authority owns the light rail transit but SNC-Lavalin has a 35-year concession to operate it. TransLink decides the fares and operational matters such as schedules.

The Ontario Liberals have become increasingly reliant on public-private partnerships to build hospitals, courthouses and transit.

The second phase of the 65-kilometre extension will take the toll road all the way to Clarington, Ont.

With files from Robert Benzie, Tess Kalinowski and the Canadian Press

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