Competition regulator says a third party bidder would be unlikely to set tolls below the price caps
Australia’s competition regulator has accepted a Transurban-led consortium’s move to acquire the majority stake in Sydney’s WestConnex tollroad.
The decision comes despite concerns raised by the Australian Trucking Association (ATA), which argues the acquisition will lessen competition for the construction, ownership and operation of tollroads across the nation.
In its submission to the Australian Competition and Consumer Commission (ACCC), the ATA says it is concerned the proposed sale to Transurban would push the cost of tolls paid by trucking higher in the long run.
ACCC chair Rod Sims said the ACCC had considered a range of traffic models when considering whether road-on-road competition would be diminished if the Transurban-led Sydney Transport Partners consortium were successful in buying the WestConnex stake.
“We’ve concluded that an alternative bidder for WestConnex would be unlikely to set tolls below the price caps, as only a small number of road users in Sydney would be likely to switch between current Transurban toll roads and the WestConnex toll roads,” Sims says.
“This was one of the more difficult decisions we’ve made, but we are confident of where we have landed.”
Speaking after the decision was announced, ATA CEO Ben Maguire tells ATN that the ACCC’s decision has strengthened his organisation’s resolve.
“The decision confirms the ATA’s view that toll road charges for trucks should be controlled by the planned independent price regulator for heavy vehicle charges, not state governments,” Maguire says.
“The ATA made this point to the prime minister just this month, and will make it again in our submission in response to the Government’s consultation paper on independent price regulation.”
The ACCC further justified its decision not to oppose the STP bid following a consortium undertaking that it would publish important traffic data that would help rival bidders compete for future toll-road concessions.
Sims says that, when the data publication undertaking was taken into account, the lessening of competition that would occur with the acquisition would not be “substantial”.
The undertaking will require Transurban to publish 15-minute-interval toll gantry data for each quarter for each toll road in which it has an interest in Sydney.
This data includes vehicle count, vehicle classification (e.g. light vehicle, heavy vehicle) and direction of traffic flow.
“We are satisfied that with this undertaking others will be able to compete for new toll road concessions in New South Wales if Transurban succeeds in its bid for WestConnex,” Sims says.
“All bidders for future toll road concessions in NSW will benefit from access to detailed toll road traffic data, not just Transurban.”
“This will enable all potential bidders to calibrate and validate their traffic models to the same level of confidence as Transurban, which will likely lead to lower costs of finance,” he says.
Transurban is Australia’s largest toll road operator, with it and its entities currently holding seven of nine toll road concessions in NSW, including the M1, M2, M5 and M7 motorways, and 15 out of 19 Australia-wide.