Media Release

14 February 2018

O’Brien-Hodgett: Liberal Nationals back Victorian motorists. Daniel Andrews backs Transurban.

Wednesday 14 February 2018

Liberal Nationals back Victorian motorists. Daniel Andrews backs Transurban. 

Victorians deserve to know the truth about whether Transurban is making super profits at their expense.

The Liberal Nationals, if elected in November, will conduct an audit to explore the early return of CityLink to Victorians under the Agreement for the Melbourne City Link.

The relevant clause can be triggered if Transurban achieves super profits – an equity return of 17.5% per annum or greater.

If this audit shows there has been super profits under the agreement, the road could revert to state ownership as early as June 2026 and could become toll-free for road users. This would be nearly 20 years earlier than Daniel Andrews’ plan of 2045.

Financial commentators and industry experts have flagged that Transurban returns are meeting the super profits threshold.

Background:

Under clause 1.1 of the Agreement for the Melbourne City Link the “Concession Period” is the period beginning on the date of Financial Closing and ending on the date which is 33 years and 6 months after the Link Expected Completion Date.

However, sub-section (a) provides that it may end earlier than the Expiry Date on a date being 25 years and 6 months, 27 years, 29 years, 31 years or 33 years after the Date of Completion of the last Section to be Completed if on that date the Equity Return (assuming the Concession Period ends on the relevant date) is or exceeds 17.5% per annum.

Clause 3.4 of the agreement relates to the ‘Surrender on Expiry or Termination of Concession Period’ which provides that at the end of the Concession Period the Company and the Trustee shall surrender the Link and deliver to the State the Plant and such other plant and equipment required and used for the Project under the Project Scope and Technical Requirements.

Attributable to Shadow Treasurer, Michael O’Brien:

“Victorians deserve to know the truth about whether Transurban is making super profits at their expense.

“This is Daniel Andrews’ Valentines gift for Transurban, tens of billions of dollars of free money.

“Victorians are already struggling with cost of living pressures under Daniel Andrews’ 12 new taxes. The last thing they need is higher tolls for longer because of the Premier’s sweetheart deal with Transurban.”

Attributable to Shadow Minister for Roads and Infrastructure, David Hodgett:

“There’s nothing fair about Daniel Andrews forcing motorists in the northern, eastern and south-eastern suburbs to pay billions of dollars in extra tolls to build a road in the west that they won’t use.

“Daniel Andrews’ decision to ram through the West Gate Tunnel project is giving Transurban a license to print money.”