The owner and operator of Lane Cove toll Tunnel in Sydney, Australia – Connector Motorways – has been put into the hands of the Receiver.
KordaMentha (KM), which was appointed as Receiver and manager by Connector Motorways’ security trustee BTA Institutional Services Australia, is exploring options for the 3.6km long link, including a possible sale.
KM said the plan is to put the tunnel assets on a firm financial footing and one option considered would be a sale disposal. The toll tunnel will continue operating despite the business setback.
The privately financed twin-tube tunnel opened three years ago slightly ahead of schedule but traffic volumes have been lower than projected and, consequently, revenues weaker.
In late 2008, credit ratings agencies Fitch and Moody’s turned negative on the toll tunnel venture, their focus being on Lane Cove Tunnel Finance, the financing arm of Connector Motorways. They noted then that there was sufficient liquidity to meet cash calls to at least mid-2009.
Traffic volumes increased 9 per cent over the last year, noted the Receiver. Over the last six months the company also raised the tolls twice in its first adjustments for inflation.
Despite the slight improvement the Receiver was called in and no significant changes are planned to tunnel operations, said KM.
The problems for Lane Cove follow previous revenue difficulties across the city at the Cross City toll tunnel, which also saw KM called in to act as Receiver.
In June 2007, the owner and operator, Cross City Tunnel Group, was sold to a consortium led by ABN Amro and Leighton Holdings.
