Roads to riches for Transurban but motorists pay price

Transurban’s profits have risen by 11 per cent, despite the company’s West Gate Tunnel project being more than six months behind schedule.

Transurban’s net profit totalled $162 million in the six months to December.

Transurban’s profits have risen by 11 per cent amid higher traffic on its toll roads, despite the company’s $6.7 billion West Gate Tunnel project being more than six months behind schedule amid a dispute with the Victorian government and construction contractors over contaminated soil.

Net profit totalled $162 million in the six months to December, rising from $145m a year ago. Proportional earnings before interest, taxation, depreciation and amortisation, reflecting income from Transurban’s stakes in toll road assets, rose 9.5 per cent to $1.09bn after removing acquisition costs. Proportional toll revenue increased 8.6 per cent to $1.39bn.

The toll revenue comes as the company engages in major expansion in Australia and North America, with large investments in projects ranging from the WestConnex highway in Sydney to an extension of the reversible I-95 express lanes in Virginia.

Controversially, the West Gate Tunnel’s $6.7bn price tag includes $2.7bn from the Andrews government and $4bn from Trans­urban, in exchange for which the toll road company has received approval to increase tolls on existing Melbourne roads by 4.25 per cent every year for a decade, netting an extra $37.3bn by 2045 according to Parliamentary Budget Office calculations.

Premier Daniel Andrews last month warned the company that the toll extension deal could be renegotiated, in light of the impasse with Transurban and its contractors CPB and John Holland over the disposal of contaminated soil, with tunnelling scheduled for July 2019 yet to begin.

Victorian opposition transport infrastructure spokesman David Davis on Tuesday said it was clear Transurban had been a “big winner” from its deal with the Andrews government.

“Toll revenue is surging, but the big losers are commuters, who are being hit in the neck week after week now, on existing CityLink roads to pay for a road that they may never use and which is not even constructed yet,” Mr Davis said.