Showing posts with label Chile. Show all posts
Showing posts with label Chile. Show all posts

Tuesday, 26 February 2013

News briefs - Argentina, Australia, Chile, London

Buenos Aires and Santiago both consider forms of congestion pricing

Drew Reed in Transportation Nation writes about how Buenos Aires and Santiago are both at least discussing the concept of charging more to use roads at peak times.  He cites various articles in Spanish, but the key points are:

Buenos Aires:  The city is increasing tolls on three existing toll roads.  However, it is particularly increasing tolls at peak times, being 0700-1000 and 1700-2000. Tolls during those periods will be 25-60% higher than at other times.  Motorcycles also pay, and will face charges being up to double during the peak compared to the off peak.  More details here in Spanish.  This isn't particularly revolutionary, but is an obvious step to take with toll roads.

Santiago:  Santiago already has an extensive toll road network, so this proposal goes further and proposes a congestion charge around the central city effectively to charge non-residents for commuting from out of town.  It is an academic proposal, although the article curiously notes that Steer Davies Gleave did a study for congestion charging for Santiago but appeared to come up with small cordon for the historic centre (I'd have thought Santiago had the potential for something much more ambitious given the highly efficient toll road system already in place).   The Spanish article is here.  Although the idea is interesting, I again think the real potential must be to build upon the existing toll road network.

Could BrisConnections have done more to attract toll road users?

In October, the Herald Sun reported on an online poll undertaken by the Courier Mail on what it would take for Brisbane motorists to use the now bankrupt AirportLink toll road.   Although far from scientific, it suggested that maybe up to 15% would consider using it, if there was a package to pay for both it and the connecting Clem7 toll road, with around 20% interested if there was a capped charge (not uncapped as the article suggests), so that users would only pay up to a set limit (presumely because certainty about how much one would pay reassures users).  53% said nothing would induce them to use it.

Of course we now know that no such package to use both roads was offered, and although there is a capped charge option, it was probably too high to induce interest.  No doubt the receivers will be keen on figuring out how to attract more customers, but also want to maximise yield.  Package deals may help both roads, given how closely related they are, but that would require receivers to talk to each other.

London- Liberal Democrats call for annual inflation adjusted congestion charge

According to Mayorwatch, the Leader of the London Liberal Democrats group in the London Assembly, Caroline Pidgeon, is calling for an annual increase in the congestion charge to reflect inflation because it "is far too low when you consider the adverse impacts that driving has on other Londoners".

All very well, except that the charge itself has doubled since its introduction in 2003, which is far in excess of inflation (which would take it to about £7 today).  It was £5 when it was introduced and is £10 now (£9 for registered users). 

A far better argument would be to suggest that the charge is too low, rather than an easily dismissed claim about inflation proofing it.   It may be better to consider a return to the original later operating hours (6.30pm end period rather than 6.00pm).

Atlantic Cities writes about the enduring public perception problem of congestion pricing


The article by Eric Jaffe is worth reading, and largely reflects on the survey by the Capital Region Transportation Planning Board in Washington DC and its environs.  He makes the valuable point that people do not believe congestion pricing would be effective.  That seems astonishing to anyone with a basic understanding of economics, but is true.  The researchers suggest a trial would make a difference too, by demonstrating success.  However, I think there are other issues.  One is that people need to know and trust where money raised is going.  Another is whether people think they are taxed too much already (which is either true, or if not true, needs to be explained why in this context).  Finally, congestion pricing needs to be designed to have finesse, to target individual roads in specific directions of travel and times, so that it avoid charging others unnecessarily.   Putting circles around city centres is so last decade, and really only suits cases where such centres are severely congested and major attractors for traffic that can mode shift.   Far too often it is seen by engineers as the convenient solution, and far too few actually realise that the city that first did congestion pricing was Singapore - which still has by far the most elegant approach, because it charges individual congested corridors, pricing each of them distinctly.   However, to do that well you need economists, and to be careful about your use of traffic models that have never been designed to reflect the collective impact of pricing dozens of individual road links. 

Wednesday, 8 August 2012

News briefs - Florida, Pakistan, Virginia, Chile, Indonesia

Florida talks about tolling a flyover

Tolling a bridge, tunnel, new highway or new lanes is considered to be feasible and worth considering. What about a simple flyover over a junction? Well Florida DoT is considering just that between the I-95 and SR 202 according to WOKV. The idea is that it could be tolled with free flow electronic tolling, but this certainly would test willingness to pay for a relatively small time saving. Certainly outside peak periods I’d be surprised if many paid at all. However, it is consistent with Florida’s policy of resisting increases in fuel taxation in favour of tolling to the extent practically possible. The bigger question is the extent to which tolls could recover capital costs for such a project when the alternative is so readily available (and the price would have to be very low to attract users).
Pakistan isn't ready for congestion pricing yet

Ahmad Rafay Alam in The Tribune of Pakistan, writes about the chronic condition of traffic congestion in major cities in the country.  He notes how the surfeit of road building has not sustained reductions in congestion as vehicle numbers grow and more people drive.  He also notes the lack of support for pedestrians, cyclists and public transport.  Whilst slightly off topic for this blog, I'll particularly note that pedestrians are typically the poorest relation in urban transport policy in developing countries.  It can be a dominant "mode", but it is seen as a mode of the poor and a way of commuting that shouldn't be encouraged.  Wrong.  Since most trips in cities are short trips, it is a perfectly good way of getting around for distances of less than 1km.  It is a key to avoiding traffic congestion and tying up public transport networks with such trips.  It means ensuring footpaths are adequate and clear of too much obstruction. It means having crossing places on roads, including traffic signal crossings for pedestrians, that are enforced and clear.  Building roads or metro lines or bus rapid transit without recognising that everyone is a pedestrian, is going to start a trend that is harder to reverse.  A trend that major modern cities are now trying to reverse. 

The article notes that congestion charging could be a possible solution.  Indeed it could, but without good reliable means to enforce against vehicles that refuse to pay, it is impossible.  Pakistan is still some way away from having the basic information systems and regulatory requirements across vehicle (and vehicle owner) identification, before it can implement congestion pricing.  The first step should be a national vehicle ID programme., with reliable updates of ownership details and means to enforce failures to register or update details.

Virginia announces Transurban to extend I-95 toll lanes

The Washington Post reports that the state of Virginia "has made a formal agreement with private partners to build 29 miles of high-occupancy toll lanes along Interstate 95. Construction is scheduled to begin very soon and should be done by the end of 2014."

"the agreement with 95 Express Lanes LLC, a joint venture between Transurban DRIVe and Fluor Enterprises Inc., covers construction and operation of 29 miles of express lanes on I-95 from Garrisonville Road in Stafford County to Edsall Road in Fairfax County."

The full press release is here.   Key facts from the press release are:

The key components of construction include:
  • Extending nine miles of existing HOV lanes from Dumfries to Garrisonville Road in Stafford County, which alleviate one of the region's worst traffic back ups
  • Expanding existing HOV lanes from two to three lanes for 14 miles between Prince William Parkway to vicinity of Edsall Road on I-395
  • Making operational improvements to the existing two HOV lanes for six miles from Route 234 to Prince William Parkway
  • Adding eight new or improved access points to and from HOV/HOT network at key interchanges
  • Expanding and adding commuter parking lots
Financial and tolling highlights:
  • Project will cost $925 million with 95 Express providing $854 million in funding. This includes an anticipated TIFIA loan of $300 million, which is expected to be available in November 2012
  • VDOT will provide $71 million in public funds, a lower amount than the original estimate of $97 million, due to lower-than-expected financing costs at closing.
  • Tolls will be collected electronically using E-ZPass, including the new E-ZPass Flex, eliminating the need for toll booths
  • HOV-3+, vanpools, motorcycles and buses travel free. Vehicles with one or two people will pay a toll to use the express lanes or ride the general purpose lanes for free. Tolls will vary based on real-time traffic conditions to manage the number of toll-paying customers who choose to enter the express lanes. Most customers are expected to pay to use express lanes only a couple of times a week when they need a faster trip, with a typical trip during rush hour costing between $5 and $6.
  • Project will fund a safety and enforcement program including crews to assist disabled vehicles, incident detection technology and more Virginia State Police. The program is expected to significantly reduce HOV violators. 
 Maps are available here.

Brookfield Infrastructure buys part of Chilean toll road

Canadian Business reports that Canadian firm Brookfield Infrastructure  "and its institutional partners have signed a deal to pay C$590 million (US$589 million) for the 45 per cent stake in the Autopista Vespucio Norte toll road in Chile that they do not already own."  It raises the shareholding to 51%.

Commenting on the road, the firm said   "This Chilean toll road is a key artery in the ring road network surrounding Santiago, and it benefits from an attractive revenue framework whereby tolls escalate annually at inflation plus 3.5 per cent".  In addition it has had compounded annual growth in traffic of around 8% for each of the past three years.

The highway is essentially Santiago's primary northern ring route and is considered by tolling specialists to be very efficiently run, with electronic free flow tolling, and maintained to a very high standard.

RTT News claims that Brookfield is in discussions with Abertis to "create a joint venture to acquire a 60% interest in Obrascon Huarte Lain Brasil S.A. for approximately $1.7 billion, comprised of $1.1 billion of equity and $600 million of assumed liabilities."  Obrascon being a major Spanish toll road concession holder, with roads in Spain, Brazil, Mexico, Chile, Peru and Argentina.   Abertis and Brookfield are already bidding for Obrascon's Brazilian toll road assets

Bakrie wants out of toll road business in Indonesia.

Long standing Indonesian business consortium Bakrie Group has announced it is seeking to sell its toll roads business according to the Jakarta Post.

The report states the firm:

"wanted to sell its PT Bakrie Toll Road subsidiary for at least Rp 1.3 trillion (US$137.8 million), an amount equal to the subsidiary’s equity, to settle debts"

Its prime assets include the 35-km Kanci-Pejagan toll road between Cirebon, West Java, and Brebes, Central Java which has been criticised by the Public Works Minister Djoko Kirmanto for being of "poor quality".  Revenues are not particularly good, but the report concludes that this is largely an effort by the large investment firm, that has ties going well back into the Suharto era, to realise assets to pay down its debt burden and refocus the company (which is predominantly a property development firm) on its core business.

Indonesian state toll road company Jasa Marga has start to the year

The Jakarta Globe reports that state owned toll road operator Jasa Marga had a 30% increase in revenues in the 6 months to July 2012.   Part of this is due to an increase in traffic, with an over 11% increase compared to same period last year attributable to rising car ownership in Indonesia.  It also increased toll rates in Jakarta and Surabaya in response to inflation of around 5% per annum.  However, the result is distorted by Jasa Marga's sale of its shareholding in private toll road operator Citra Marga.  Jasa Marga is responsible for 13 toll roads listed here, plus another eight of which it has a partial shareholding.

Jasa Marga's corporate profile describes it as follows:

Founded on 01 March 1978, Jasa Marga is the pioneer in the development of toll road in Indonesia. With 32 years of experience, the Company remains the market leader in the country's toll road industry. Jagorawi (Jakarta-Bogor-Ciawi) Toll Road is the Company's toll road that marks the milestone in the historical development of Indonesian toll road industry. To date, the Company has operated 531 km toll road representing 72% of the total operating toll roads in the country.

Tuesday, 10 July 2012

Abertis sees credit rating drop due to Spanish toll road demand


Spanish toll road investor Abertis and its French subsidiary SANEF have both had their credit ratings cut to BBB by Standard & Poors according to Reuters.

Abertis has a network of 1500km of toll motorways in Spain via 8 subsidiaries (59% of toll roads in Spain by length), and a minority stake in another 200km of toll roads in Spain. It also has a nearly 15% share of Portuguese toll road operator Brisa, and 25% ownership of RMG (company holding non-tolled concessions on two UK roads). It also owns or partly owns companies responsible for around 700km of Chilean toll roads, has a part share in concessions over 89km of roads in Puerto Rico and has a controlling stake in the concession of one road in Argentina.

SANEF has a network of 17570km of almost entirely toll motorways in France, in the north and east.

The reason given for the downgrade is “of volatility in traffic volumes experienced by its Spanish toll road network operators”

Interesting statistics from the press release:

- Average daily traffic declined by 24% between 2007 and 2011 on Abertis's Spanish toll roads;
- In 2012, S&P forecasts a further contraction by 9% on Spanish toll roads;

- This is driven by very high unemployment, weak economy;

- Abertis's Spanish toll roads have greater exposure to competition from untolled roads than similar roads in France or Italy.

- 80% of dividends in past three years originated from Spanish toll roads, with concessionaire Acesa (541km of road) contributing 70% of that. This decline will be partly offset by good performance on toll roads elsewhere, and expected tariff increases and cost savings.

However, S&P sees risks in the proposed acquisition of the Brazilian and Chilean toll road operators of Obrascon Huarte Lain (OHL) which includes over 3100km of roads in Brazil and around 340km of roads in Chile because it Brazil is:

-- An emerging economy, with a soft currency that could suffer  depreciation vis-a-vis the euro. 
-- A relatively dynamic regulatory environment in Brazil, where the bulk of the operations to be integrated are located. Unilateral changes to concessions are allowed in Brazil, although appropriate remuneration must be provided to the toll road operator to restore the concession's economic
balance.
-- A greater proportion of heavy vehicle traffic, which we view as more volatile than light vehicle traffic. Heavy vehicle traffic volumes account for more than 30% of total traffic volumes on the roads to be integrated, compared with 15% on average on Abertis' network.


On SANEF, S&P says:

Sanef operates the third-largest interconnected toll road network in France. Although the company is exposed to variations in traffic volumes, it benefits from a strong competitive position; favorable concession agreements, including yearly inflation-linked tariff increases; high profitability, and positive free cash flows. We consider the risk of acquisitions and diversification to be low. These strengths are partly offset by Sanef's high indebtedness, and its relatively rigid dividend policy.

Conclusion

Even a casual observer of Spain's economy can see the crash of property and construction dramatically affecting overall demand, and it appears far too many concessions were predicated on forecasts of demand that now look unattainable in the medium term.  Abertis may be big enough to hold onto most of what it has, but it is likely this sector will remain tough for some time, and there is pressure to have consolidation and refinancing so that such roads can be on a sustainable footing.  There is rumour that the Spanish government is considering how to address these problems, and it may even think about having some form of charges on existing roads.

Monday, 31 October 2011

Skanska sells half of Chilean toll road

Swedish infrastructure investment company Skanska has sold half of its shareholding in Chilean concession toll road Autopistas de Antofagasta according to Cision Wire.  The price was US$43 million (a US$9 million profit) and Skanska is retaining a 50% shareholding.   The buyer is Inversiones Infraestructura Dos S.A., a Chilean company owned by two investment funds managed by Las AmĂ©ricas, an investment funds manager belonging to PENTA (a Chilean group).

The project is under construction and due to open in December 2012 including 120km of new road and 200km of road upgrades.  It is in a fast growing mining district of Chile.  More details are in the Autopistas de Antofagasta annual report 2010 in English here.

Friday, 23 September 2011

Series of toll road investor results: Ferrovial, Atlantia, Transurban, Metro-Pacific

Ferrovial

Construction News reports Spanish infrastructure investor Ferrovial reporting a 312 million euro in net profit in the first half of 2011, contrasting with losses of 164 million euro in the same period of 2010. Notable was how the EBITDA on the Toronto 407 ETR rose by 8% in part due to higher tolls and lower operating costs. The Airports division contributed 62% of EBITDA, Services 14%, Toll Roads 14% and Construction 10%.

Ferrovial owns its toll roads through its subsidiary CINTRA.  Its highway assets (whole and partial) are:

Atlantia

Reuters reports that the Italian toll road investor company had a 41% increase in profit for the first six months of 2011 compared to 2010. This reflected sale of a stake in one road and increased toll revenue, despite declining traffic volumes (with a 0.5% decline in volumes on Italian toll roads).

"Excluding the sale of an investment and charges related to impairments, profit rose 12 percent over the period."

Atlantia's highway assets are:
- Autostrade per l'Italia SpA (2854.6 km of network of Italian motorways);
- SocietĂ  Italiana per Azioni per il Traforo del Monte Bianco (5.8 km), which manages the Italian section of the Mont Blanc Tunnel;
- Raccordo Autostradale Valle d'Aosta SpA (32.3 km), which manages the road linking Aosta and the Mont Blanc Tunnel (Italy);
- Autostrada Torino-Savona SpA (130.9 km), which manages the motorway linking Turin and the Ligurian coast (Italy);
- SocietĂ  Autostrada Tirrenica SpA, which holds the concession for the entire length of the Livorno-Civitavecchia motorway (240 km) and currently manages the Livorno-Rosignano section (36.6 km) (Italy);
- Tangenziale di Napoli SpA (20.2 km), which manages Naples' orbital motorway (Italy);
- SocietĂ  Autostrade Meridionali SpA (51.6 km), which manages the Naples-Pompei-Salerno motorway (Italy);
- A4 Krakow-Katowice motorway (Poland);
- Pune Solapur Expressways (50%) in India, which holds the concession (expiring 2030) for 110 km motorway in the state of Maharashtra;
- 135 km toll motorway serving the cities of Rio Bueno and Puerto Monttt in Chile;
- 442 km toll motorway in the state of San Paulo in Brazil;
- 23.5 km southern section of the orbital toll motorway serving the city of Santiago del Chile;
- 79 km toll motorway serving the cities of Algarrobo, Casablanca and Cartagena in Chile;
- 43 km of road network in the city of Santiago in Chile;
- 21.5 km north-eastern bypass in the city of Santiago del Chile; and
- Urban motorway linking the city of Santiago with Arturo Merino Benitez International Airport.

Transurban

The Herald Sun reports that Australian toll road company Transurban has reported a 90% increase in full year profit.  An 8.8 per cent rise in traffic on Melbourne CityLink, which netted A$434.6 million (US$424 million) in revenue, was a key contributor to total toll revenue of A$891 million (US$870 million) - up 10 per cent.  It carries a reported A$5.8 billion of debt behind its assets. 

The Australian reports an interview with Transurban chief Chris Lynch who said "Our roads are very robust ... There's not a lot of discretionary travel on our roads, it's largely people getting to work or the airport."

It was also noted that the Melbourne CityLink, it gained from an additional lane on the western approach to the toll road network allowing for greater use of its capacity.

The Australian also noted that:

"The acid test of an infrastructure company is the ability to pay generous distributions funded by real cash rather than debt. The "wedge of free cash" -- $390 million in all -- enabled Transurban to declare a 27c per security full-year payout, with management promising "at least" a 29c distribution this year."

Adelaide Now reports that Melbourne Citylink grew faster than the average 10% "with an increase of 12.8 per cent to contribute $434.6 million. Transurban said the completion of the upgrade on its southern link, adding lanes on CityLink between both tunnels and Toorak Rd, had been important in boosting traffic."

Transurban said traffic growth on the Lane Cove Tunnel, purchased nearly a year ago, had initially risen 6 per cent but had declined to 2.8 per cent this calender year due works on the M2.

Transurban's highway assets are:
- Hills M2 motorway, Sydney. Australia;
- Lane Cove Tunnel, Sydney, Australia;
- Eastern Distributor, Sydney, Australia;
- Westlink M7, Sydney, Australia;
- M5, Sydney, Australia;
- Pocahontas 895, Virginia, USA; and
- Capital Beltway HOT lanes, Virginia, USA

Metro Pacific Tollways Corporation (Philippines)


earnings slipped 4 percent in the first half of the year to P725 million (US$17 million) due to lower-than-expected traffic growth and higher tax payments during the period. “Though traffic demand could be lower given sharp increases in fuel prices and the expiration of MNTC’s (Manila North Tollways Corp.) income tax holiday, MPTC still expects a strong financial performance this year with the increase in toll rates and modest traffic volume growth,” MPTC president Ramoncito Fernandez said in a statement.

The company's latest road is the Subic-Clark-Tarlac Expressway. Its portfolio also includes the North Luzon Expressway.

Monday, 16 May 2011

Chilean toll roads profitable for Skanska

Open PR reports on the success of the sale of 50% of Autopista Central by Swedish firm Skanska to Alberta Investment Management Co - a pension firm.   The report indicates Skanska invested US$350 million into the successful Chilean toll road and sold its shareholding for US$790 million.  Not a bad return at all.  Meanwhile, Skanska still owns a concession for the Antofagasta toll road, involving 117km of new lanes and 207km of upgraded roads planned to open in 2012.  Skanska is a 100% shareholder of its subsidiary in Chile responsible for that concession.

Chile has been a great success in terms of toll roads, with its investment climate, economy and infrastructure requirements matching with well planned and executed toll highways that have plugged real gaps in its highway network.  The roads are well maintained, operated efficiently and perhaps can be seen as a model for Latin America.  It is fair to say that Skanska's report that it sold its share in Autopista Central because of the price offered, is reasonable.  Nevertheless, with one of Santiago's most critical strategic assets, Alberta Investment Management Co. has not bought a bad investment.

(Skanska still has Autopista Central on its website though, showing it needs a bit of work done to keep its website up to date)

Friday, 7 January 2011

Catchup - toll road headlines from the past week

While I get back into the flow of what is going on after the break, here are some of the more interesting key news stories in the toll road sector (separate from congestion pricing) around the world in the past week:

Chilean toll road sector sees major ownership change - The Alberta Investment Management Corporation (AIMCo) has purchased a 50% stake in the Autopista Central toll road in Chile from Skanska for SEK6 billion ($885.8 million) according to the Montreal Gazette.  Toll road investments remain interesting to longer term investment funds.

Brisbane's Rivercity Motorway Group has debt sold to hedge funds as future remains uncertainAs I wrote before, Rivercity Motorway Group is in dire financial circumstances as revenue from its CLEM7 toll road is well down on forecasts due to a number of factors.  The Australian reports that the road generates only enough revenue to cover operating costs, but not to pay interest on the debt.   This is unsustainable, but lenders could well choose to hold out until 2012 when adjoining roads open that will enhance the attractiveness of the route and drive up traffic volumes.

Indonesia to launch major expansion of its toll road network: Trans-Java toll road project is to proceed according to Vivanews.  It is described in this PDF file, and is 1120km in total length.  It is part of a wider infrastructure expansion strategy.  This simply shows Indonesia using tolling as a core means to fund its rapid highway development.