Australian toll road lawsuit successful

Some time ago I wrote about the Clem 7 toll road in Brisbane, Australia.  It provides a north-south tunnelled bypass of the Story Bridge and other roads approaching downtown Brisbane from the south and east.

It is a PPP toll road that went bankrupt as the demand for the road was little more than half that forecast.  In December 2013, the road was taken over by Queensland Motorways, which at the time was a company owned by the Queensland State Government, but has since been privatised and is now owned by Transurban. 

The road was acquired by Queensland Motorways for A$618 million (US$472 million), but cost A$3.2 billion (US$2.4 billion) to build.

Transurban's latest traffic data reports AADT of 27,000 on the road, which is notable when you consider the forecast was that up to 100,000 a day would be using it.   

However, what was significant about this case was that around 1000 investors who bought shares in the project engaged in a class action lawsuit (PDF detailed) against the demand/revenue forecasting consultants - AECOM - and the original Rivercity Motorway company.   The Sydney Morning Herald reports that they have won a settlement gaining a payout of A$121 million (US$92 million).   The allegation was that AECOM had made traffic forecasts without reasonable grounds, and specific information had been excluded from the product disclosure (prospectus) document for investors.  

News briefs - Australia, Belarus, Israel

Australia - Queensland Government to privatise motorway company

Queensland Motorways is a company owned by the Queensland Investment Corporation, the Queensland State Government's holding company for commercial state owned enterprises.  It owns three key toll roads in Queensland, but also acquired from Brisbane City Council the Go Between Bridge, which I profiled over two years ago as being an unprofitable disaster.

Queensland Motorways have paid the Council A$112 (US$98) million for the 50 year tolling rights to the bridge.

Previously it acquired the disastrous Clem 7 toll tunnel motorway, which is subject to a lawsuit over demand and revenue forecasts.  It paid A$618 million (US$538 million) for the road, not bad given it cost A$3 billion to build.

So now the Queensland Government thinks it is a good time to divest itself of this investment.  The Australian reports it is worth about A$4 billion (US$3.5 billion)

The report says:

Groups likely to be interested in Queensland Motorways include superannuation heavyweight Industry Funds Management, Abertis/Hastings and groups out of Canada including the Canadian Pension Plan Investment Board or the Ontario Teachers Pension Plan.

Of the listed groups, Transurban could purchase the asset with partners, a source said.


Belarus - tolling of existing highways to be expanded

ITS International reports that the Belarus electronic toll system has been expanded to a network of 118km of highways as of January 2014.  This expands the extent of the network to 933km, with the whole system installed and operated by well-known Austrian toll systems provider, Kapsch.   The expanded network will include eleven new gantries for charging and enforcement. The report claims that customers are registered from Belarus, Ukraine, Russia, Poland and Lithuania.

The system uses DSRC, not GNSS technology, paralleling that which has long been in place in Austria, and similar systems on networks in the Czech Republic and Poland.

I wrote about the Belarus system a couple of years ago.   It is branded BelTol  and charges cars €0.04 (US$0.06)  and up to €0.12 (US$0.17)  per km for trucks. Both rates seem rather cheap.  Germany charges between €0.14 and €0.29 per km for trucks, Slovakia €0.08-€0.24 and Austria €0.16-€0.44 per km.   No toll system in Western Europe charges cars by distance across a network electronically.


Israel - New HOT lane being studied

According to Israeli business news website, GLOBES, Ayalon Highways Ltd (a central government owned company responsible for managing Israel's Highway 20) is investigating the value of introducing a HOT Lane on the highway between Roads 1 and 5.  

However, the report is contradictory, which some claiming that a lane will be taken from the existing road, and the Ministry of Transport claiming that discussions are about a new (additional lane).  

The road will connect with the privately owned H-1 HOT lane that was opened in 2011 between Ben Gurion Airport and Highway 20, which I noted at the time,  and is driven entirely by heavy congestion on the existing lanes.  

The proposed lane would offer toll free access for buses, but the "high occupancy" requirement would be 4 car passengers, suggesting that there is a real interest in ensuring the lane maintains a good level of service, although it is far too early to consider what the potential toll levels would be.

Proposed new HOT lane in blue, existing H1 lane in yellow

Queensland government sells toll company to itself

The Queensland government has transferred its own state owned company, Queensland Motorways Ltd, to the government owned Queensland Investment Corporation according to the Herald Sun. It is considered an “asset sale” by effectively having the state government’s investment arm buy the company from the state government. The price was A$3 billion (US$3.3 billion). Queensland Motorways owns two major toll motorways (Gateway and Logan motorways) in the state and has run them commercially since its inception. The Logan Motorway is effectively a west-east bypass to the south of Brisbane, whereas the Gateway Motorway is a north-south bypass running to the east of Brisbane.

UPDATE: Sale of Queensland Motorways postponed (originally Brisbane City Council keen to buy Queensland Motorways)

In a peculiar move, the Brisbane Times reports that Brisbane City Council appears set to bid to purchase the company Queensland Motorways when the Queensland State Government seeks to privatise it in 2011.  Of course this wouldn't be a "privatisation" at all, but rather one group of taxpayers buying a commercial company from another (and the group of buyers are also sellers)!

The intention is to establish municipal control of toll motorways owned by Queensland Motorways in Brisbane, so that tolls can be co-ordinated and the profits of Queensland Motorways channeled into Brisbane municipal projects.   The intention would be to transfer Brisbane City Council owned toll roads to a new company to incorporate Queensland Motorways.

The sale price is estimated to be around A$3 billion.  Queensland Motorways has been a success as a commercial company operating toll roads for the state government.  

Curiously, the council bid is led by Lord Mayor Campbell Newman, from the centre-right Liberal Party and being questioned by Labour Party councillors (who one might think would prefer council ownership to the private sector), showing politics in Australia is not always as partisan as it is elsewhere!

UPDATE:  The Australian newspaper is reporting that the Queensland state Government has decided to delay the privatisation of Queensland Motorway Ltd because the market for toll roads is "soft".  Ownership will be transferred to the state government investment company Queensland Investment Corporation.   This is not entirely surprising given the state of infrastructure investment funds, although I personally have noticed ongoing interest that is largely driven by bargain hunting.  The Queensland Government is not needy enough for money to have to engage in a fire sale, so it isn't an unreasonable decision.