First it was Clem 7:
(In March 2010,) Brisbane opened the “Clem7” – a tolled tunnel under its central area almost five kilometres long, a distance sufficient to take a Vancouver driver from Lost Lagoon to Main and Broadway. At a cost of well over $3 billion, it’s only one element in a scheme that includes an even longer tunnel to the airport, along with bridges and bypasses that make up the largest road project in Australia.
Financed as a public-private partnership to be paid for by tolls … the planners had assumed an average of 100,000 toll-paying drivers a day.
But even on good days, it couldn’t attract 27,000. By February 2011, it was in receivership, “adding to other failures of Australian city toll tunnels – the Cross City and Lane Cove tunnels in Sydney.”
And now the next tunnel in the series of three meant to address congestion in Brisbane has gone under – mere months after its opening.
From 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.
From ABC News:
The operator of Brisbane’s AirportlinkM7 toll road has entered a trading halt as it negotiates with lenders. ….
The AirportlinkM7 toll road has only seen half of the forecast amount of traffic since it opened in July this year.
An academic says the company is heading for inevitable financial collapse.
Dr John Goldberg from the University of Sydney served on a New South Wales parliamentary inquiry into Sydney road tolls.
Dr Goldberg has told ABC Brisbane radio BrisConnections has followed other failed toll roads in Australia by using traffic forecasts that have little relationship with the reality of how many cars end up using the road.
“They take the outcome for investors as a starting point and they work back to find the traffic that will produce that revenue,” he said.
“Now this is totally false. It’s an artificial thing that’s been on the books for years.”
And yet, the third tunnel is under construction – and the politician behind them all, Campbell Newman – the previous Lord Mayor – has gone on to become Premier of Queensland and has so far paid no political price for the failure of Clem 7 and Airport Link. (They are not even noted on his Wikipedia entry.) It is the bondholders who have been sunk.
Brisbane’s mayor Campbell Newman who was in ultimate charge of the procurement of the concessionaire to build the tunnel has said he is sad for the investors who lost their investments, but the concession got the tunnel built and will ensure it is operated for 100 years for the benefit of the people of Brisbane.
Only the next one – Legacy Way tunnel – is different: this time the local taxpayers are on the hook:
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.
Proving once again that when it comes to Motordom-scale road projects, Conservatives are anything but conservative.