Kennett has a cheek

It is bitterly ironic to hear Jeff Kennett now warn of the danger Transurban poses. In early 1994, Schroders Australia Corporate Finance was financial adviser to VicRoads on the CityLink project. That March my colleague David Lennon and I were invited to present a paper on road financing at an infrastructure symposium. It was attended by, among others, road authorities from three eastern states. We advised that it was commercially naive to think private tolling concessions would run their term and that the roads would then revert to government. We said incumbents would renegotiate to progressively extend tolling concessions, thus creating permanent private monopolies. We also explained how a tolling regime could be established that did not involve selling control of the toll revenue stream.

The response was swift and unambiguous. Shortly after the paper was delivered, Schroders’ Melbourne office was informed that its advisory mandate was being split into two “phases”, the first was to end immediately. The “second phase” was to be re-tendered; needless to say it was awarded to another firm.

“Independent” advisers cannot protect the public interest; they can only tinker at the edges of schemes that are favoured by politicians or bureaucrats. The privatisation of our roads has led to the needless waste of billions of dollars; money that is desperately needed elsewhere. Unless it is stopped, countless more billions will be wasted.

Stephen Morris, Coorparoo, Queensland

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