Questions and Answers
What is the capital structure of RiverCity Motorway Group?
The $2,886 million cost of constructing the toll road will funded via $1,032 million of equity and $1,839 million of debt.
How is the company affected by the recent increases in interest rates?
RiverCity Motorway has long-term financing arrangements in place with no re-financing required until 2014. The Group has fully hedged its interest rate exposure up to Construction Completion in 2010, with a further 70 percent hedged to 2014. Debt for the project is being provided by a syndicate of 24 banks, including Australia’s four major banks.
When will construction of the tunnel be complete?
Contract Completion for the tunnel is October 2010. Our design and construction contractor has a target to complete their works by December 2009. While it is early days, the construction team is well placed to achieve completion well ahead of the Contract Completion date.
How many vehicles are forecast to use the Clem Jones Tunnel when it opens in 2010?
Traffic experts have forecast 60,000 vehicles per day will use the tunnel when it opens in 2010. This will increase to 100,000 vehicles per day following a forecast ramp-up period of 18 months. Vehicle numbers will then grow steadily during the 45-year Concession Period.
What are the key factors that underpin the traffic forecasts?
Every week day approximately 250,000 motorists are forced to travel through the Brisbane CBD to get to their destination. So there is already an existing need for RiverCity Motorway to provide a travel route bypassing the CBD. Continuing economic and population growth in Brisbane, available infrastructure, and dependency on cars all point to further increases in traffic. By 2016 metropolitan Brisbane will need to cater for 450,000 (27%) more people and a 40% increase in vehicle travel. Traffic forecasts have been prepared by Maunsell Australia who provided substantially accurate forecasts on other toll road projects, such as Melbourne CityLink, and the M2 and WestLink M7 in Sydney (largest variance 8%).
Does the tunnel have the capacity to meet forecast traffic growth?
Similar to other tunnels, such as the Sydney Harbour Tunnel, we expect to see a growth in lane capacity over the long term. Capacity in the Sydney Harbour Tunnel has increased steadily from 1,800 to 2,300 vehicles per lane per hour. It would be quite late in the Concession that we would expect the tunnel to start approaching capacity, which we estimate to be 2,500 vehicles per lane per hour. This will be due to improvements in car technology, such as improved vehicle designs and braking and acceleration performance. In addition, there is also likely to be continuing expansion in the peak hour as drivers re-time their journeys to avoid congestion.
How will the Clem Jones Tunnel be impacted by the Airport Link project?
The Queensland Government’s selection of a preferred bidder to build, own and operate the new Airport Link tunnel confirms an additional motorway connection for the Clem Jones Tunnel, which will be delivered 6 months early. As part of the RiverCity Motorway bid in 2006, traffic experts forecast a 1 percent increase in traffic on NSBT as a result of a direct connection with Airport Link. This 1% increment in traffic appears to be quite conservative when you consider the traffic increases on a number of Sydney toll roads following the opening of adjoining toll roads. Traffic increased by more than 15 percent on the M2 in Sydney when the WestLink M7 opened in 2005. When the M5 East opened in 2001 the Eastern Distributor received a 20 percent increase in traffic.