Transurban lodges offer for WestConnex toll road project

Transurban’s offer for Sydney’s $16bn WestConnex project pits it against a rival IFM bid, but it faces regulatory hurdles.

A tunnel in the WestConnex project

Toll road giant Transurban has submitted a conditional offer for Sydney’s $16 billion WestConnex motorway project, pitting it against a rival bid led by infrastructure heavyweight IFM Investors.

By announcing its bid for a 51 per cent interest in WestConnex assets up for sale, Transurban (TCL) has maintained good faith with the NSW government.

The offer from the Transurban-led consortium hinges on receiving clearances from the Australian Competition & Consumer Commission and the Foreign Investment Review board and follows the surprise decision last week by the competition regulator to ask for a further seven weeks to make a ruling on its offer.

The ACCC has said it is concerned that Transurban’s acquisition of a majority interest in WestConnex “may cement Transurban’s advantages when competing for future toll roads”.

Today was the deadline for the bid and NSW had declined to put it back because of the ACCC delay.

“Transurban remains confident that it will obtain all necessary approvals,” the Melbourne-based company said in a statement today.

Once final bids are received, the government will take the time to carefully evaluate them before making a decision, Transurban noted referencing an announcement made on Friday by the government.

“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,” Transurban CEO Scott Charlton said.

Transurban currently runs seven of the state’s nine toll road concessions and 15 of 19 toll road concessions in Australia.

The ACCC said with that level of dominance in the major growth markets of Sydney and Melbourne, it was justified in seeking more time to consider “arguably the most significant” toll road transaction in Australia “in the foreseeable future”.

Transurban’s partners are AustralianSuper, the Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority sovereign wealth fund.

IFM’s partners include the Canadian pension fund OMERS and Dutch fund APG.

Government sources have previously predicted a return of more than $5bn from the 51 per cent stake in the project’s holding company Sydney Motorway Corporation.