The directors of the owner of Sydney’s Cross City Tunnel concession, CrossCity Motorway Pty Ltd, have placed the company into voluntary administration. CrossCity Motorway Pty Ltd is owned by the Royal Bank of Scotland, EISER Infrastructure Partners and Leighton Contractors. It has held the tunnel concession since September 2007.
The chairman of the Board, Ed Sandrejko, said David Merryweather and Gregory Hall of PricewaterhouseCoopers had been appointed voluntary administrators.
“The board has taken this decision following news that the NSW Office of State Revenue intends to appeal the recent Supreme Court decision which affirmed that $64 million in stamp duty was not payable on the 2007 acquisition,” Mr Sandrekjo said.
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“Naturally we are disappointed at this outcome”.
“CrossCity Motorway bought the concession from the original owners in September 2007 through receivers”.
“While a range of factors caused the original receivership, there was a significant impact on profitability due to the previous government’s decision to alter without compensation the surrounding traffic arrangements in contravention of the contractual arrangements. This has continued to affect the balance sheet since we acquired the asset”.
“Since buying the concession, we have sought to put the business on a sustainable footing and have succeeded in this, reducing costs and seeing modest but promising traffic growth. We believe we have run a safe and efficient asset on behalf of motorists”.
“While the business remains cashflow positive, the legal action has had significant impact coming in the midst of the required refinancing process. Having won our case in court we anticipated it would still be possible to proceed to refinance. The OSR appeal means that this is no longer feasible.”
The motorway will remain open to motorists during administration.