Wednesday, September 07, 2005

Macquarie Purchases Dulles Greenway

The Macquarie Infrastructure Group, a Sydney, a global developer of toll roads, has announced plans to acquire and operate the 14-mile Dulles Greenway toll road. For $533 million, Macquarie is purchasing full control of the general partner -- The Shenandoah Group -- and one of two other partners. The company, based in Sydney, Australia, is negotiating with Kellogg, Brown and Root for the remaining 13 percent ownership.

Macquarie's toll-road portfolio extends from Australia to the United Kingdom, Canada, Germany, Portugal and the United States. Said CEO Steve Allen: "Dulles Greenway has a number of highly attractive attributes that caught the attention of MIG and we have been actively pursuing the opportunity to invest in the road for some time. Dulles Greenway is a relatively young, well maintained intra urban toll road with a 10-year operating history and 51 years remaining in the concession agreement. Tolls are established, on application, by the Virginia State Corp. Commission."

Furthermore, Allen noted, the toll road serves Loudoun County, with one of the most affluent and fast-growing populations in the United States. Despite financial difficulties in the early years, the Dulles Greenway has enjoyed compounded average growth of 17 percent for traffic and 26 percent for revenue between 1996 and 2004."

For details, see the article in the Loudoun Times-Mirror.

2 Comments:

At 8:02 AM, Blogger Ray Hyde said...

Right, and Macquarie has indicated a willingness to expand the road to 6 and then 8 lanes as the need arises. So, how is it that private enterprise can ake money on roads that some claim are bankrupting the government?

Could it be that some cherry picking is involved here that will leave the government worse of for having to maintain the non-profitable roads?

 
At 11:14 AM, Blogger Steve Haner said...

The numbers on this will be very interesting. How do they earn back that $533 million with a comfortable profit margin? Just how much leeway will the SCC -- the agency that also sets gas and electric rates, for example -- give them on future toll increases? Sure this is cherry picking, but in fairness it was a self-contained project and revenue from it probably couldn't be used beyond the confines of that project anyway. But the trend you describe Ray should be watched by those portions of the state which do not have these kinds of opportunities, and might wither away if the other transportation revenue sources remain stagnant.

 

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