Sydney Transport Partners, the consortium led by Transurban bidding for a majority stake in the Sydney toll road WestConnex from the NSW Government, has been given the all-clear by the competition watchdog.
Getting the green light from the Australian Consumer and Competition Commission (ACCC) puts the Transurban consortium bid for the 33km, $16.8 billion project in the box seat over rival IFM.
The battle for the slice of the NSW government project, due for completion in 2020, which is expected to generate up to $5 billion for a 51% stake, was delayed as the regulator investigated more deeply into the competition issues around the sale.
The ACCC said it won’t oppose the deal provided Transurban publishes traffic data to assist rival bidders on future toll road concessions.
ACCC Chair Rod Sims said his organisation was concerned that because Transurban already had a majority interest in seven out of nine toll roads in Sydney, it would have a competitive advantage in bidding on future projects. Transurban now has stakes in 15 of the 19 toll roads in Australia.
“Bidders with existing toll road concessions have an advantage in acquiring further ones, in particular due to the reality or a perception that they have better data and experience, and better models and better forecasts,” Sims said.
“These incumbency advantages were the main focus of our investigation. If a rival consortium were to acquire the WestConnex toll road concessions, there would likely be two players with these incumbency advantages in Sydney.”
The ACCC concluded that there would not be a substantial lessening of competition and that “the vast majority” of traffic data used by Transurban is either publicly available or is not exclusive to the company, except for data from its existing toll roads.
The undertaking with the ACCC will require Transurban to publish 15 minute interval toll gantry data for each quarter for each toll road in which it has an interest in Sydney. This data includes vehicle count, vehicle classification (e.g. light/heavy vehicle) and direction of traffic flow.
“The undertaking addresses a key aspect of the incumbency advantages currently enjoyed by Transurban, which is access to data. This means that all bidders for future toll road concessions in NSW will benefit from access to detailed toll road traffic data, not just Transurban,” Sims said.
The ACCC also looked at concerns about toll costs but pointed to the fact that the government was setting price caps.
“We’ve concluded that an alternative bidder for WestConnex would be unlikely to set tolls below the price caps, as only a small number of road users in Sydney would be likely to switch between current Transurban toll roads and the WestConnex toll roads,” Sims said.
He added that: “This was one of the more difficult decisions we’ve made, but we are confident of where we have landed.”
NSW Treasurer Dominic Perrottet said the government will now proceed with finalising its decision on a preferred bidder.
“The NSW Government will continue to assess the bids based on all available information. As is standard practice with live transactions the Government will not comment further,” he said.
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