ACCC moves WestConnex decision up a week
Competition & Consumer Protection 2018-08-22 9:29 am By Cat Fredenburgh | Melbourne

The ACCC will announce its decision on TransUrban’s proposed bid for a majority stake in the $16.8 billion WestConnex highway project a week early, in light of the New South Wales Government’s timetable for reviewing bids.

The regulator said its decision on whether to approve TransUrban’s proposal will be announced August 30. It previously planned to announce its decision September 6.

Earlier this month, TransUrban agreed to release detailed traffic data for its toll roads in New South Wales in hopes of winning the ACCC’s blessing on the deal.

The ACCC said it was seeking comment on the proposed undertaking given the short timeframe it has to review the proposed deal.

“Some of the feedback from the industry has indicated that Transurban’s rivals may have trouble competing on an equal footing for future toll road concessions because they do not have the level of data that Transurban has,” ACCC Chair Rod Sims said.

“Given the short timeframe to review the proposed acquisition, the ACCC has decided to release Transurban’s proposed undertaking for consultation before reaching concluded views on these issues.”

The competition watchdog had originally scheduled its final decision date for July 19 but shifted this to September 6 to allow for sufficient time for the consideration of all issues, before moving the date again to August 30.

“WestConnex is an unusually large toll road project and we are dealing with unusually complex competition issues that we simply require more time to consider,” Sims said when announcing the delay.

TransUrban has offered to publish 15-minute-interval toll gantry data each quarter, including vehicle count, vehicle classification and direction of traffic flow for the M2, Lane Cove Tunnel, Cross City Tunnel, M1, WestConnex itself and any other toll road in which it has an interest.

It is also seeking consent from its partners to publish the same detailed data for the M5, Westlink M7 and NorthConnex toll roads.

TransUrban submitted its bid for the project last month, despite the ACCC’s delay in signing off on it.

CEO for Transurban, Scott Charlton, said at the time that he was optimistic the deal would receive approval from the ACCC and the Foreign Investment Review Board.

“We will continue to work constructively and collaboratively with both agencies to enable the NSW Government to conclude its process as expeditiously as possible and achieve the best outcome for NSW taxpayers and road users,” Charlton said.

TransUrban is Australia’s largest toll road operator, holding seven of the nine toll road concessions in NSW, including the M1, M2, M5 and M7 motorways. WestConnex is a partially completed network of motorways and road upgrades in Sydney which extends the M4 motorway from Parramatta to Sydney Airport and duplicates the M5 East Corridor.

In May, the ACCC raised preliminary competition concerns about the acquisition, publishing a statement of issues outlining future toll road concession and road-on-road competition issues between Transurban’s current toll roads and WestConnex. The statement noted that the acquisition may lessen competition for concessions to construct, own or operate toll roads in NSW, and called for submissions from interested parties.

“Since our statement of issues, we have been conducting a thorough analysis of the likely impact on competition from the proposed acquisition. We set ourselves a very tight nine-week review period after the statement of issues, to meet the state’s sale process timeline. However this has not been possible despite our best efforts,” Sims said.

“We recognise that the decision to extend the timeline for our decision may have flow-on impacts for the WestConnex sale process, so we do not do this lightly. However the reality is that this is a major transaction in the context of NSW toll roads, arguably the most significant in Australia in the foreseeable future.”

The NSW government originally planned to sell the 51% stake in WestConnex to help fund the final stage of the project, a link between the M4 and M5 motorways, and aimed to finalise the sale by mid-2018.

“Selling a 51 per cent stake in SMC will unlock existing value to help fund the M4-M5 Link project, getting it built sooner, but it also means the people of NSW will continue to benefit from the growth in the value of the Government’s ongoing shareholding,” Treasurer Dominic Perrottet said in August last year.

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