Transurban consortium - proposed acquisition of BrisConnections including the AirportLinkM7 toll road in Brisbane

Summary

A Transurban consortium, comprised of Transurban, AustralianSuper Pty Ltd and Tawreed Investments, is proposing to acquire BrisConnections including the AirportLinkM7 toll road in Brisbane, which is currently in receivership.

Market definition

Consistent with the approach taken by the ACCC in previous tollroad reviews, the ACCC considered the likely effect of the proposed acquisition in each of the following markets:
- the supply of electronic tolling services to motorists
- the supply of tolling services to holders of tollroad concessions, and
- a bidding market for the award of concessions for tollroad construction and operation.
Consistent with previous reviews, the ACCC did not consider a "market for tollroads" as there is no substitutability and no competition between tollroads.

Competition analysis

The ACCC concluded that the proposed acquisition is unlikely to substantially lessen competition in any relevant market.

Supply of tolling services to motorists: The proposed acquisition is unlikely to substantially lessen competition in the market for the supply of tolling services to motorists because:
- the most important tollroad expense incurred by motorists is the toll, which is regulated and which will not increase as a result of the proposed acquisition, and
- administration and account charges to motorists are generally regulated by the terms of the tollroad concession deeds with the concession-holder.

Supply of tolling services to tollroad operators: The proposed acquisition is unlikely to substantially lessen competition in the market for the supply of tolling services to tollroad operators because:
- neither BrisConnections nor Transurban currently supplies or offers to supply tolling services to third parties, and
- tollroad owners and operators would have a number of alternatives to Transurban, including in-house development of the necessary electronic toll collection system and international market participants operating similar systems offshore.

Bidding market for new tollroad construction and operation: The proposed acquisition is unlikely to substantially lessen competition in the market for the construction and operation of new tollroads because Transurban would continue to face effective competition in bidding to construct, own and/or operate any new tollroads in Queensland or elsewhere in Australia. Relevant factors in this regard are that:
- it will continue to be in the interest of Transurban and other tollroad operators to maintain the interoperability of motorists' electronic tags, which is facilitated by roaming fees to recover the costs of collecting toll revenue. Roaming fees in Australia are charged between tollroad operators on a mutual, bilateral basis
- roaming fees would represent a minimal cost in the overall development and operation of a new tollroad
- the proposed acquisition would result in a very small incremental change in the proportion of tags issued by Transurban, and
- a recent example of a tender process for the construction and operation of a new tollroad in Queensland demonstrated significant competitive tension, in circumstances where Transurban already issues most tags to Queensland motorists.