The Australian Competition and Consumer Commission has extended the timeline for its review of Transurban’s bid for the WestConnex toll road project, delaying the decision until 6 September.
The ACCC published a statement of issues concerning Transurban’s bid in May and indicated a deadline of July 19 for the completion of its review. This has been pushed back to September to allow the organisation “sufficient time to consider the competition issues relating to the proposed acquisition”, it said in a statement.
ACCC chairman Rod Sims said the competition watchdog had not taken the decision lightly as this “may have flow-on impacts for the WestConnex sale process”, but “needs to get to the bottom” of any competition concerns before making a ruling.
Final bids for a 51 percent stake in the Sydney Motorway Corporation, the New South Wales Government-owned entity charged with developing and operating WestConnex, are due on 23 July.
The NSW Government is now considering whether to extend the bidding process to allow Transurban to compete or continue with only one realistic bidder, a source familiar with the process told Infrastructure Investor.
The only other bidder for WestConnex is a consortium led by IFM Investors, the Melbourne-based asset manager. IFM declined to comment on the ACCC statement.
WestConnex is the largest road project under construction in Australia and “a major transaction in the context of NSW toll roads, arguably the most significant in [the country] in the foreseeable future”, according to Sims. It will comprise 33 kilometres of interconnected motorways and road upgrades. The project will be carried out in three stages and is estimated to cost A$16.8 billion ($12.5 billion; €10.7 billion).
In its February statement of issues, the ACCC raised two concerns about the bid from Sydney Transport Partners, a consortium led by Transurban as the majority interest holder, with AustralianSuper, Canada Pension Plan Investment Board and Tawreed Investments holding minority stakes.
First was the impact on future toll road concessions, with the ACCC contending that incumbent operators have significant advantages over non-incumbents when bidding for subsequent concessions due to knowledge of detailed traffic data and the ability to leverage existing concessions. Transurban owns or has a controlling stake in 15 of 19 toll road concessions in Australia and seven of nine in NSW.
The second concern centred around reduced competition between existing toll roads, as motorists could substitute WestConnex roads for certain other Transurban-owned stretches when travelling to certain destinations. An alternative WestConnex bidder could lead to lower tolls and better service, the ACCC contended.
A spokesman for NSW Treasury said in a statement: “The government is aware of the delay relating to the ACCC’s review of the proposed bid by the Sydney Transport Partners consortium for the acquisition of 51 per cent of Sydney Motorway Corporation.
“The government is committed to securing the sale proceeds that will help fund the critical M4-M5 Link,” he added.
In a statement to the ASX, Transurban said it was aware of the ACCC decision and that it was “engaging with the NSW Government” regarding the sale process.
Sydney Motorway Corporation and Transurban did not respond to requests for comment.