AustralianSuper, CPPIB back $6.7b Sydney toll road deal

The consortium, known as Sydney Transport Partners (STP), is 50% owned by Australian toll road operator Transurban, 20.5% by AustralianSuper, 20.5% by CPPIB, and 9% by Abu Dhabi Investment Authority (ADIA).

According to a filing, Transurban will finance its portion of the deal through a A$4.2 billion rights offer. AustralianSuper and CPPIB will each contribute A$1.7 billion, while ADIA will put in $700 million. Transurban will separately issue shares worth A$600 million to AustralianSuper and ADIA.

The transaction is expected to close within the month and will entail a concession dated until December 2060. Tolls are expected to increase during this period at the rate of inflation. The transaction will also see STP acquire the M5 West highway in 2026 when a separate existing concession expires and the asset is transferred back to WestConnex.

"The government is invested in creating the Sydney of tomorrow that we can all be proud of and ensuring Sydney takes its place as one of the great global cities of the world," Scott Charlton, CEO at Transurban, said in a statement. "WestConnex is undeniably a game changer for Sydney – it will get the city moving, boost the economy and help clean up traffic from congested communities."

WestConnex comprises 33 kilometers of new or improved motorway linking Sydney's downtown area with surrounding districts as well as providing a corridor to Sydney Airport and Port Botany. Scott Lawrence, managing director and head of infrastructure at CPPIB, described the project as vital infrastructure for one of the fastest population and economic growth regions in Australia.

CPPIB previously invested in Sydney road infrastructure in 2015 as part of a consortium with Queensland Investment Corporation and Transurban that committed A$2.9 billion to the nine-kilometer NorthConnex tunnel project. Similarly, the deal also included a toll road concession in the form of the M7 route, which was seen as lowering the greenfield risk.

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• Topics
• Australasia
• Infrastructure
• Buyouts
• Australia
• CPPIB
• Abu Dhabi Investment Authority (ADIA)
• Transportation