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Lord Mayor reveals deal to lease tolling rights

16 July, 2013

Lord Mayor reveals deal to lease tolling rights

Lord Mayor Graham Quirk has revealed an in-principle deal has been struck with Queensland Motorways to fund future infrastructure projects in Brisbane by granting the right to toll, operate and maintain the Go Between Bridge and Legacy Way tunnel.

The Lord Mayor said Council and Queensland Motorways had signed a deal to progress the 50 year agreement which would deliver a financial benefit to Council of between $1.08 billion and $1.58 billion during the next seven years.

Cr Quirk said the deal was subject to approval by Council at its next meeting on 30 July. It was also subject to approval from the State and Federal Governments.

He said Council would retain ownership of the Legacy Way tunnel and Go Between Bridge assets with tolling rights returning to Council at the end of the 50 year life of the concessions.

“This deal is a good outcome for both Council and Queensland Motorways and provides the opportunity to start further congestion busting projects such as Kingsford Smith Drive and Wynnum Road,” he said.

“Importantly, Council will retain ownership of these assets with the tolling rights being leased.

“In recent years this council has invested billions in major road infrastructure when others wouldn’t or couldn’t in a bid to get Brisbane moving again.

“We were the only government I know of in Australia last year to get an upgrade in their credit outlook so we are in a strong financial position to redirect funds raised into bringing these road projects forward if the deal is successful.”

As part of the deal, Council will be asking the State Government to set the tolling period for both assets at 50 years.

He said the total financial benefit of the deal with Queensland Motorways would range between $1.08 billion and $1.58 billion with the higher value being reached if it reached Council’s traffic figures. If traffic figures exceeded Council’s expectations, the benefits of the greater traffic volumes would be shared.

“I think Council’s conservative traffic volume estimate for Legacy Way of 24,000 vehicles per day when it opens in 2015 is realistic and it is well below the 30,000 per day Clem7 receives and the 55,000-60,000 vehicles that travel each day on Airport Link,” he said.

“I’ve always said that Kingsford Smith Drive is this city’s next major infrastructure project and as a result of this deal we can bring forward the $650 million upgrade which will see the road widened to six lanes via a retaining wall built 20 metres out into the Brisbane River.

“This deal will not only see vital road projects brought forward, but also much-needed jobs and investment in the construction sector.” # ENDS


• Queensland Motorways (Queensland Motorways) made an unsolicited approach to Brisbane City Council last year about taking control of the daily operations of the Legacy Way tunnel and Go Between Bridge, which could save ratepayers $650 million in costs over the next seven years alone.

• In addition to this, Queensland Motorways would also pay Council for the tolling rights to the two roads via a series of payments, as well as a potential share in toll revenue linked to traffic performance.

• The approach from Queensland Motorways to Council followed the Federal Labor Government’s 2012 Infrastructure Finance and Funding Reform Report recommending a range of innovative infrastructure options such as encouraging superannuation funds to invest in public infrastructure and using freed up capital for further projects.

• In 2012 the Queensland Treasury Corporation rated Brisbane City Council’s finances as “strong” and upgraded its credit outlook for a second successive year, saying “the expansion of infrastructure is being undertaken in a planned and coordinated manner (and) has been generally financed in an appropriate and prudent manner.” (QTC BCC Local Govt Credit Review Sept 2012, p3).

• The Legacy Way tunnel is a $1.5 billion project, with Brisbane City Council contributing $1 billion and the Federal Government contributing $500 million, while the Go Between Bridge cost council $308 million to construct.

• Queensland Motorways operates and maintains the 62 kilometre Gateway, Gateway Extension and Logan motorways under a 40 year tolling concession with the State Government until 2051.

Payments and financial benefit to Council based on traffic outcomes

Timeframe Low Case Council
Upfront payments (2013)1 $112m $112m
Year 2015 $131m $131m
Year 2017 $100m $200m
Year 2018 $43m $55m
Final payment (2020) $42m $432m
Operational and maintenance $650m $650m
cost savings over 7 years

Total benefit $1.078 billion $1.580 billion
1. Upfront payment amounts are subject to purchase price adjustments including stamp duty and transaction costs

Council’s 2013/14 Budget allocations for Kingsford Smith Drive & Wynnum Rd
(Based on the minimum traffic volumes).
2013/14 $mil 2014/15 $mil 2015/16 $mil 2016/17 $mil
Kingsford Smith Drive Future Upgrade 2.230 12.800 79.700 268.355
Wynnum Road Shafston Ave to Hawthorne Road-Stage 1 - - 2.000 28.000

Expected Typical Weekday Volume
Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20
GBB – Minimum 13,600 14,100 14,500 14,900 15,400 15,800 16,300 16,600
GBB – Council 13,600 14,300 14,900 15,600 16,300 16,800 17,200 17,800
LW – Minimum 16,700 21,200 22,000 22,800 23,500 24,500
LW - Council 24,000 34,400 38,200 40,600 43,600 46,100

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