Transurban – just like Greece – does not pay back its debt. They are jost rolling over debt, but not paying it back. Come the next credit squeeze and the game is over. Just what happened to the Lane Cove tunnel, which Transurban acquired, at a bargain price. But who will acquire Transurban when the time has come? Is Transurban too big to fail? How much will investors lose? And the problem is growing with every new toll-way project: M2 widening, M5 widening…. what next?
Moreover, we are in year #8 of peak oil – with decreasing likelihood that the global economy will turn for the better any time soon. In which scenario then would Transurban ever pay back its debt? The way things are going these toll-way “assets” would have a huge debt burden at the end of their concession periods when they are handed back to government. If they ever go that far.
Causes and Consequences of the Oil Shock of 2007–08
Whereas historical oil price shocks were primarily caused by physical disruptions of supply, the price run-up of 2007-08 was caused by strong demand confronting stagnating world production. Although the causes were different, the consequences for the economy appear to have been very similar to those observed in earlier episodes, with significant effects on overall consumption spending and purchases of domestic automobiles in particular. In the absence of those declines, it is unlikely that we would have characterized the period 2007:Q4 to 2008:Q3 as one of economic recession for the U.S. The experience of 2007-08 should thus be added to the list of recessions to which oil prices appear to have made a material contribution.
http://www.brookings.edu/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_hamilton.pdf
Let’s have a look at the most recent presentation:
http://www.transurban.com/1134584.pdf
And 3 years ago:
Let’s put that into a graph, using all the other presentations in between, from this website http://www.transurban.com/938.htm
Well, a business which cannot pay back its debt isn’t viable.
And that is the global debt situation:
Graph from: 4/6/2012 Global debt and oil prices
http://crudeoilpeak.info/global-debt-and-oil-prices
Outlook:
Debt mountain ahead in the next years. Good luck.
Related posts:
21/6/2012
Ghost traffic on US tollway hits peak oil ignorant banks and investors
http://crudeoilpeak.info/ghost-traffic-on-us-tollway-hits-peak-oil-ignorant-banks-and-investors
12/2/2012
Car addicted Sindney destroys bus ramp near rail hub as tollway debt increases 60% at least
http://crudeoilpeak.info/car-addicted-sindney-destroys-bus-ramp-near-rail-hub-as-tollway-debt-increases-60-pct-at-least
4/4/2011
Sydney’s RTA builds M2 exit lanes for $200 oil
http://crudeoilpeak.info/sydney%e2%80%99s-rta-builds-m2-exit-lanes-for-200-oil
11/2/2011
Money in Transurban’s cash box not enough to complete M2 widening
http://crudeoilpeak.info/money-in-transurban%e2%80%99s-cashbox-not-enough-to-complete-m2-widening
9/12/2010
Will Transurban ever pay back its debt? (part 2)
http://crudeoilpeak.info/will-transurban-ever-pay-back-its-debt
22/11/2010
Yet more debt to finance Sydney’s tollway expansion (part 1)
http://crudeoilpeak.info/yet-more-debt-to-finance-sydney%e2%80%99s-toll-way-expansion
15/11/2010
Transurban’s M7 traffic 38% less than expected
http://crudeoilpeak.info/transurban%e2%80%99s-m7-traffic-38-less-than-expected
11/11/2010
Tollopoly on Sydney’s orbital
http://crudeoilpeak.info/tollopoly-on-sydney%e2%80%99s-orbital
25/10/2010
Sydney’s RTA about to pull down public transport infrastructure (part 1)
http://crudeoilpeak.info/sydney%E2%80%99s-rta-about-to-pull-down-public-transport-infrastructure-part-1
21/9/2010
RTA fails to present business case for M2 widening (part 1)
http://crudeoilpeak.info/rta-fails-to-present-business-case-for-m2-widening-part-1
