So much for putting money into holes...Airport Link operators driven to the ground as $4.8 billion asset worth less than it owes
ROBYN IRONSIDE From: The Courier-Mail November 13, 2012 1:00AM
Comparison of forecast and actual tunnel traffic of major tunnel projects in Brisbane, Sydney and Melbourne.
Source: The Courier-Mail
BRISBANE'S Airport Link tunnel - the nation's biggest infrastructure project - could soon go bust after its owners yesterday admitted the $4.8 billion asset was worth less than it owes.
Less than four months after the opening of the tunnel, BrisConnections yesterday announced it had entered "formal negotiations with lenders and other key stakeholders" to discuss their options.
"Taking into account ... present traffic levels and operating costs, the enterprise value may be less than outstanding debt," read a statement posted on the Australian Stock Exchange. "As previously advised, BrisConnections is reviewing cost and revenue options and has retained advisers to undertake a review of likely traffic levels in the light of current information."
A spokeswoman for Treasurer Tim Nicholls said the Newman Government had not been approached for a bailout and it would be "inappropriate to comment" on whether one would be considered.
The tunnel will remain open to motorists despite the financial crisis.
BrisConnections initially forecast Airport Link would carry 136,000 vehicles a day by the end of the three-month, toll-free period.
Instead, traffic volumes plunged to an average 53,172 vehicles a day when a discounted toll of $2.50 was applied from October 18. The rapid downfall of the project follows the failure of Rivercity Motorway's Clem7 Tunnel which went into receivership 10 months after opening with debts of $1.3 billion.
Despite the toll road failures, Brisbane City Council is pressing ahead with the $1.7 billion Legacy Way due to open in early 2015.
Forecast to carry annual operating losses of almost $100 million, the project is largely funded by ratepayers with the Federal Government contributing $500 million. Lord Mayor Graham Quirk said he was confident about the traffic forecasts for Legacy Way which were much more conservative than those prepared for Airport Link and the Clem7.
"(We're forecasting) about 24,000 vehicles a day on opening in 2015," Cr Quirk said. "While (BrisConnections') traffic forecasts were ambitious, there were about 65,000 vehicles a day during October using Airport Link to help reduce traffic congestion across the city and the infrastructure will be there for many, many decades to come."
Since opening in late July, Airport Link has had a dramatic effect on surface roads including Lutwyche, Albion and Sandgate roads.
Paul Turner from peak motoring body RACQ said the tunnels were a positive addition to northside Brisbane's road network. "We've now got considerably less traffic on surface roads, and one of the best runs from the northside to the airport," Mr Turner said.
"Unfortunately the traffic volumes that were projected in the (BrisConnections') prospectus were always extremely ambitious. We always thought it was extremely unlikely Airport Link would carry more vehicles than the Gateway bridges in its first few months."
The Australian
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