VANCOUVER — Concerns about the viability of a highway construction project in B.C. have been averted after the B.C. government decided to pony up a third of the funds.

The provincial government reached an agreement-in-principle for a public-private partnership to expand the Port Mann bridge and widen the Trans-Canada Highway in the Lower Mainland.

“The Port Mann Bridge and the Highway 1 corridor is a critical transportation link that our government is expanding to meet current and future demand,” said Transportation and Infrastructure Minister Kevin Falcon. “This agreement means road users will benefit from safer and more efficient travel along that corridor, while taxpayers will benefit from private sector innovation and the transfer of risk for any cost overruns, construction delays or revenue shortfalls.”

Initially, funding for the public-private partnership was expected to be provided in full by Macquarie Group. However, news reports surfaced recently suggesting the Australian investment bank was having a difficult time securing the funds amidst the global economic downturn.

Under this new agreement, the province will provide about one-third of the financing required for the project, standing behind a significant equity investment from the private sector partner, and on the same terms and conditions as the banks providing debt financing.

The project could end up totaling more than $2 billion, but all costs will be recovered by electronic tolls, which will be approximately $3 for cars on opening day.

Final terms and conditions for project financing are expected to be settled at financial close, in early March. The project remains on schedule for a 2013 completion.