ACCC delay to WestConnex toll road ruling a disgrace

By delaying a decision on Transurban’s bid for WestConnex, the ACCC looks like it wants NSW to make a decision for it.

A tunnel in the WestConnex project.

The competition watchdog’s delay in making a decision on Transurban’s bid for Sydney toll road project WestConnex is nothing short of a disgrace.

After five months of consideration, the Australian Competition and Consumer Commission said last week it needed more time to assess competition concerns over the bid, and delayed a decision until September 6. NSW government tenders closed early this week.

The good news is there is an even money chance the decision may come before than date, but just when is anyone’s guess.

In this bureaucratic jungle the ACCC is adamant it won’t adjust its timetable to suit the NSW government and likewise the state showed no willingness to meet ACCC timetables.

The losers then are the two bidders — Transurban and the consortium led by IFM — and ultimately NSW taxpayers and road users.

This battle is a little unusual because the bids are for 51 per cent of a company, with the NSW government as the partner with 49 per cent.

The hope would be the state eventually sells the rest.

WestConnex is also important for other reasons, including that whoever wins control will in 2027 also control Sydney’s M5 motorway.

Rival bidders IFM and Transurban just happen to be equity owners in that.

Bids were due in the WestConnex battle last Monday and Transurban submitted a noncomplying bid because it needs ACCC, Foreign Investment Review Board and tax office clearance before proceeding.

Based on its preliminary view, released in February, the ACCC wants to oppose Transurban’s bid, which would hand the race to the IFM consortium.

By delaying its decision it looks like the ACCC is hoping the NSW government will make the decision for it by opting for IFM.

Transurban owns seven of the nine toll roads in NSW but counters competition concerns by arguing the state has ultimate pricing power and punters can choose other roads.

The government needs to think about just what impact handing assets to the incumbent does for competing bids, and with the West Harbour Tunnel project and F6 toll road to come, the state needs competing bids to maximise the proceeds and benefits.

Logic suggests it is in the state’s interest to have some competition in the ownership, which means opting for IFM.

The ACCC wouldn’t mind that result because that’s what its draft report effectively said should happen.

But it’s far better the state makes a decision rather than the ACCC, which potentially would have to defend its action in court.

Transurban of course thinks the ACCC concerns are spurious and it also thinks motherhood is a good thing.

It would seem unreasonable for the NSW government to wait seven weeks until the ACCC decides and it makes little sense to accept a Transurban bid before that date because the regulator could knock it back.

The FIRB always waits for ACCC clearance before moving.

Just why it can’t clear the IFM bid now also beggars belief.

There was an alternate route the King & Wood Mallesons advised Scott Charlton at Transurban could have taken, which is to apply for formal clearance on public benefit grounds.

Such a move would have to be completed in three months with three months for the appeal.

Given Transurban first bid back in November the process would be over by now.

But then again the public benefit would be a tough argument when Transurban already makes 85 per cent profit margins on its monopoly toll roads.

The reality is it would be in taxpayers’ and users’ best interests if the highly experienced IFM team was handed the keys.

But that doesn’t negate the case against the ACCC for letting someone else do its dirty work.