Transport Industry News

Transurban EastLink move shut down by ACCC

The major move from the ACCC will prevent the toll road operator from fighting off rival operators

Transurban won’t be allowed to operate Melbourne’s EastLink, after the ACCC’s intervention to block the proposed acquisition.

The toll road operator had been planning to invest a majority interest in Horizon Roads, which currently operates the EastLink toll road.

Horizon Roads is the only other private toll road operator in Australia alongside Transurban, with the latter already operating the CityLink toll road in Melbourne and will also operate the West Gate Tunnel toll road.

The other toll road in Melbourne, set to be the North East Link that will be operational by 2028, is being built and will be operated by the Victorian government.

The ACCC says in its ruling that the proposed acquisition would result in Transurban entrenching its position in Victoria and prevent the entry of a rival operator which could compete closely for future toll road concessions in Victoria.

“Transurban would operate every single private-sector controlled toll road in Australia,” ACCC Chair Gina Cass-Gottlieb says. 

“The ACCC received submissions expressing strong concerns from stakeholders. We also received a submission from the Victorian government outlining its concerns. The ACCC placed some significance on the concerns expressed by the Victorian government.

“We have concluded that if Transurban doesn’t acquire Horizon Roads, it would likely be acquired by a potential long-term rival and could be used as a platform to develop the capabilities needed to compete more strongly for other toll road concessions.”

Cass-Gottlieb says the ACCC therefore found that Transurban acquiring Horizon Roads would likely deter the emergence of a key rival for future toll road concessions. 

The ACCC says Transurban’s scale and in-house modelling provide it with a material advantage over rival bidders for toll roads and the proposed acquisition will further entrench this advantage.  

While there is a pool of traffic modelling experts in Australia and globally, Transurban has developed recognised expertise in preparing high quality traffic models in Australia that utilise detailed datasets and can model options more quickly and cost-effectively than its rivals.  

The ACCC’s investigation also considered the extent to which the Victorian government has the ability to constrain Transurban and would be able to level the playing field for future sales of toll road concessions in Victoria.  

“We acknowledge that the Victorian government can run open tender processes, but where one party has material incumbency advantages compared to other firms who may be considering bidding there is less likely to be effective competition for future sale processes,” Cass-Gottlieb says.

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