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Port Mann bridge partner reports massive losses on toll roads
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by mike_yvr | February 18, 2009 at 09:48 pm
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The key investor behind the public-private partnership building and operating the new ten-lane Port Mann toll bridge today reported a loss of over $1 billion (CAD). Macquarie Group's infrastructure arm took the bath on its toll road assets around the world.
Macquarie Infrastructure Group has reported a net loss of $1.3 billion in the six months to December.
But the company says the reduction in the value of its road business will not affect its operating performance or distributions.
It says it is a solid result amid tough economic conditions which have reduced the traffic on its European and North American roads.
It says it is still considering asset sales.
Macquarie operates nine toll roads around the world and blamed higher financing costs and lower traffic volume for the six-month loss.
The firm said global economic and market conditions drove a devaluation of 17 per cent in its road portfolio, which was now valued at $7.08 billion.
MIG said the decrease in portfolio valuations had been driven by changes to asset discount rates, foreign exchange rates and inflationary expectations, higher assumed financing costs and lower forecast traffic volumes driven by the recessionary environment in the northern hemisphere, where all but one of its roads are located.
B.C. taxpayers recently bailed Macquarie out of its P3 commitment to finance the Port Mann toll bridge P3 to the tune of $1 billion earlier this month. The next day, Macquarie announced that it might face major write-downs on toll road assets.
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at 08:50 on February 19th, 2009
For those who are watching the responses of many G8 governments to the continuing meltdown of major financial players around the world, news about the BC government's ongoing, if not accelerating, infatuation with public-private partnerships is puzzling. British Columbians have just been treated to a 2009 budget loaded with fast-tracked P3s despite shaky funding options. Now more than ever, taxpayers will be underwriting the whole deal. Sounds like a return to 'traditional procurement' -- in other words, 'if it ain't broke, why fix it?' -- would be the better decision.