The $9.3bn sale of WestConnex: 11 things you need to know

Toll road giant Transurban is paying more than $9 billion to the NSW government for (51%) control of Sydney’s WestConnex, it emerged today.

The ACCC yesterday cleared Transurban’s bid. Is it a happy or sad day for Sydney’s motorists? Here’s everything you need to know.

• Essentially, it means that Transurban, which already owns seven of Sydney’s nine tollroads – including the M5, Cross City Tunnel, Eastern Distributor and Westlink M7, will have an even tighter grip on Sydney toll roads.

• The $9.3bn pricetag is almost double what analysts estimated the three-stage super motorway, which has been subjected to severe opposition by local residents in the inner west and local councils, would fetch.

• The ASX-listed toll road behemoth got the green light from the competition regulator, just yesterday, to acquire the 51% stake in Sydney Motorways Corp, the publicly-owned company behind Westconnex. The 33km super motorway links west and south-west Sydney to the CBD, plus the roads to Sydney Airport and Port Botany.

• This go-ahead from the regulator was despite Transurban’s virtual monopoly of Sydney toll roads. The deal signed with the NSW government also includes an extended concession of the M5 motorway, which links to WestConnex.

• Transurban will also be allowed to raise WestConnex tolls by 4% per annum until 2040 – which is far higher than the rate of inflation which is 2.1% (the concession lasts until 2060).

• Super fund Australian Super (20.5%), the Canada Pension Plan Investment Board (20.5%), and Tawreed 9(%) – a subsidiary of Abu Dhabi‘s sovereign wealth fund will also own stakes in the toll road, as part of the deal. The Transurban-led group will be called Sydney Transport Partners.

• Pocketing $9.3bn, the NSW government will retain ownership of the remaining 49% of the project, described as the city’s largest transport project since the Sydney Harbour Bridge.

• Stage 3 has not been built yet (Stage 1 of WestConnex – the M4 widening- is complete – and Stage 2 – Extending the M4 Motorway in tunnels between Homebush and Haberfield via Concord – is under construction), but the $9.3bn Transurban forked out to the NSW government will be used to fund the third stage, which will be new traffic corridor linking the M4 and M5, and Rozelle Interchange.

• The only way to make your money back – if you will be forking out for tolls on WestConnex –could be to buy shares in Transurban. The company (ASX: TCL) is doing an equity raising selling shares to fund the Westconnex acquisition, and is looking to raise $4.2bn.

• In order to appease the competition regulator, Transurban has agreed to publish traffic data on all its roads that could help rivals bid for future toll roads which could arguably motorists a better deal – if new toll road owners emerge in the future.

• WestConnex will save motorists 40 minutes on an average peak journey between Parramatta and Sydney Airport by 2031 and bypassing 52 sets of traffic lights, including an uninterrupted journey between the Blue Mountains and Rozelle, the government claim. But it’ll cost you.

• Transurban beat a consortium led by IFM Investors.
  

• Opposers have slammed the deal saying it’s not a happy day for Sydney motorists as it will lock in tolls on the roads for the next 40 years.