Friday, July 20, 2007

U.S. Government grants Australian firm money to build connector to their tollway

Transurban granted US loan for bus road

July 20, 2007

The Age (Australia)
Copyright 2007

Tollway operator Transurban Group is continuing to develop its operations in North America, after receiving a $US150 million ($A170.77 million) loan from the United States government.

Transurban said part of the loan would be used to construct a connecting road from the Richmond International Airport in the US state of Virginia to Transurban's Pocahontas Parkway toll road, which was also in Virginia.

The loan will also be used to refinance a portion of Transurban's debt on the Pocahontas Parkway and upgrade the electronic tolling system.

Transurban had agreed to build the Richmond Airport Connector, subject to receiving the loan, under a Pocahontas Parkway concession agreement signed last year with the Virginia Department of Transportation.

Transurban will own and operate the two-lane, 1.6-mile (2.6 kilometre) Richmond Airport Connector.

Construction is expected to begin in the first half of 2008 and the road is due to open in early 2010.

"The overall uplift (in revenue) from the Airport Connector is $US500,000 per annum," a Transurban spokesman said.

He said the Pocahontas Parkway generated $US12.8 million in revenue for the year to June 30, 2007.

"When we did the financial models for the Pocahontas acquisition, we didn't allow anything for growth from the Connector," the spokesman said.

"With all the development around that area, we also expect some future upside that those (revenue) numbers don't reflect."

Of the $US150 million lent from the Federal Highways Administration, $US45.2 million will go towards the capital cost of the Richmond Airport Connector, $US95.2 will go towards refinancing the senior debt facility, and $US7 million for upgrading the electronic tolling system.

Transurban signed a 99-year concession on the Pocahontas Parkway for $US611 million ($A779 million) last year.

The Pocahontas Parkway, which was opened in 2002, is a 14-kilometre four-lane toll road south-east of the city of Richmond, linking the counties of Henrico and Chesterfield.

Transurban is looking to expand in North America, although the vast majority of its revenue from tolls and fees are still generated by toll roads in Australia.

The company is jointly investigating the feasibility of developing High Occupancy Toll (HOT) lanes along a 22.4-kilometre stretch of the Capital Beltway in Northern Virginia.

HOT lanes are lanes set aside for vehicles with high occupancy, usually three passengers.

Cars with only one or two occupants can also use these lanes by paying a toll.

Transurban also has an interim agreement with the Virginia Department of Transportation to develop a 94-kilometre bus rapid transit and HOT-lane system along the I-95 road in Northern Virginia.

Transurban is interested in other road projects in Texas and Georgia in the US, and British Columbia in Canada.

The total estimated cost of all the potential projects in which Transurban is so far interested in the US and Canada is $11 billion.

Transurban securities were seven cents higher at $7.68 on Friday.

© 2007 AAP:

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