QIC-owned Queensland Motorways Buys CLEM7 Tunnel
The Queensland Investment Corporation (QIC), through its global infrastructure arm, bested competitors in a bid for Brisbane’s Clem Jones tunnel (CLEM7). The A$ 70.3 billion QIC purchased the toll road for AS 618 million through its toll road business Queensland Motorways. The road was built at an original cost of A$ 3 billion.
The impending acquisition of CLEM7 will bolster the toll road portfolio of Queensland Motorways. According to a statement, “The addition of the CLEM7 tunnel will further expand and diversify the growing Queensland Motorways asset portfolio of toll roads, which currently includes the Gateway, Gateway Extension and Logan motorways, and will include the Go Between Bridge by late 2013, followed by Legacy Way Tunnel on construction completion in mid-2015.”
The original intent of CLEM7 was to help facilitate traffic between the suburbs north and south of the Brisbane River; however, traffic projections proved to be inflated, and Brisbane’s first private toll-way sunk under its own borrowing.
The acquisition can be seen as a bittersweet result for the northeast Australian state. On the one hand, it picked up a recurring revenue stream for pennies on the dollar. On the other hand, private infrastructure investors might think twice about investing in Australia’s recently proposed infrastructure bonds.
Infrastructure bonds are being suggested as a way to help augment Australia’s limited resources dedicated to infrastructure investment. But a recent slew of bankruptcies including Lane Clove Tunnel in Sydney are undoubtedly concerning.
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