Shares in toll road giant, Transurban ended more than 1% higher yesterday at $12.06 after the ACCC cleared it to participate in the sale of part of the huge WestConnex project in Sydney by the NSW Government.
Transurban had bid for control of the project, but had been held up while the ACCC examined the question of its dominance over the Sydney toll road system where it is already the major player.
Transurban gained clearance from the competition regulator after its agreed to release detailed traffic data allayed concerns.
The decision is a boost for the Berejiklian government in NSW as it keeps alive competition tension in the sales process where a group led by IFM is the other contender to Transurban and its partners. A decision from the NSW government is expected in the next few days – possibly as early as today.
The ACCC’s chief concern was that Transurban’s ownership of WestConnex and seven of Sydney’s nine existing toll roads would give it an advantage when bidding to build future motorway projects.
Transurban is Australia’s largest toll road operator. Transurban (or a Transurban-controlled entity) currently holds seven of nine toll road concessions in NSW, including the M1, M2, M5 and M7 motorways.
But ACCC chairman Rod Sims said the regulator found that there would not be a substantial lessening of competition for future toll roads in Sydney following Transurban’s undertaking to release detailed traffic data if it won control of WestConnex.
“We are satisfied that with this undertaking others will be able to compete for new toll road concessions in NSW if Transurban succeeds in its bid for WestConnex,” he said in a statement yesterday (https://www.accc.gov.au/media-release/accc-will-not-oppose-transurban-consortium-westconnex-bid-following-undertaking).
The court-enforceable undertaking will require Transurban to publish 15-minute interval toll data for each quarter for all of the toll road in which it has an interest in Sydney.
In scrutinising the WestConnex sales process, the ACCC found that the NSW government could do more to inject more competition and help level the playing field for those competing for future toll road projects.
“As the sole granter of toll road concessions in NSW, in many respects the degree of competition for concessions depends on the government,” Mr Sims said.
“Our investigation indicates that state governments do have tools at their disposal to promote competition for toll road concessions.”
The NSW government is believed to be looking for at least $5 billion in net proceeds from the sale of a 51% stake in the 33-kilometre WestConnex toll road.
While giving Transurban the green light, the competition regulator has raised concerns about the government using the unsolicited proposal process to build toll roads.
The ACCC found that competitive bid processes for new toll roads are more likely to result in positive outcomes for taxpayers and motorists.
“Accepting unsolicited proposals for new toll road concessions generally leads to higher costs to taxpayers, drivers, or both,” Mr Sims said.
