Friday, August 26, 2005

Macquarie seeking more U.S. Toll Roads

MIG scours globe for more roads

August 26, 2005

By Scott Rochfort
Sydney Morning Herald, Australia
Copyright 2005

Macquarie Infrastructure Group shows no sign of losing its hunger for overseas expansion.

Just days after lodging a submission to acquire the French Government's €7.3 billion-plus ($11.8 billion) stake in two toll-road operators, MIG is still scouring for investments spanning from New York, New Jersey, Washington State, Oregon, the UK, and the Netherlands to Sydney.

MIG reported a full-year net profit of $913.7 million, compared to the previous year's $251.5 million loss, but this was still below market forecasts.

Net profit was skewed by the $2.9 billion in sales MIG made during the year, which included the $1.7 billion earned from the initial public offering of toll-road group Cintra.

Two weeks after teaming up with French contractor Eiffage, MIG chief executive Stephen Allen declined to provide details of his company's bid to purchase the French Government's 70.2 per cent stake in APRR [Autoroutes Paris-Rhin-Rhône] and its 75.7 per cent stake in SANEF [Société des Autoroutes du Nord et de l'Est de la France].

However, Mr Allen said: "If the price is not right we will not proceed."

APRR has a concession of 2260km of roads around Paris and in the Rhin and Rhone valleys. SANEF operates 1743km of toll roads in north-east France.

Bidding for the toll roads could place MIG in a better position to snap up a further 1200km of toll roads the French Government wants built in the next decade.

MIG did not bid for the Government's 50.3 per cent stake in Autoroutes du Sud de la France. French contractor and road builder Vinci, which holds 23 per cent, hopes to acquire the Government's €5.5 billion stake in ASF.

But with other European governments - such as the Netherlands - considering the privatisation of their highway networks, Mr Allen said: "There are lots of prospects in the pipeline in Europe."

And despite MIG in the bidding for the SH-121 toll road in Texas, Mr Allen said his company was keen to evaluate the possible privatisation of roads in the other states.

Referring to the possible privatisation of roads in New York and New Jersey, Mr Allen said MIG was keen on investing in "some heavily used infrastructure that needs upgrading".

However, MIG declined to specify if it had an interest in buying the 190km New Jersey Turnpike or the state's 270km Garden State Parkway. There is speculation the New Jersey Government hopes to sell the roads for about $US20 billion ($26 billion).

MIG also reported a 13.9 per cent lift in gross profits and a 10.9 per cent lift in revenues from perhaps its most controversial toll-road concession, Toronto's 407.

After 18 months of discord with the Canadian Province's newly elected Liberal Government, Mr Allen said: We'd still like to negotiate a solution with them."

Sydney Morning Herald: