Image via WikipediaFor Whom the Road Tolls: Reviewing Listed Toll Roads, Bridges and Tunnels (Seeking Alpha, May 3,2011)Also discussed here: Publicly listed toll roads outside the USA (Road Pricing, Aug. 5, 2011)
And here: The Dow Jones Brookfield Toll Roads Infrastructure Index (3 page pdf, Dow Jones)
Today’s review article contains an investment analysis of 23 toll roads in 8 countries which differ significantly both in national financial policies and in the amounts invested and the returns and dividends. While Italy has the largest market capitalization for one toll road (Atlantia SPA), China’s roads offer the most attractive prospects with equity ratios as high as 70%.
Key Quotes:
“Nearly three thousand years ago, travelers had to pay a toll for using the Susa–Babylon highway under the regime of Ashurbanipal, who reigned in the seventh century BC. The business of toll collection has survived through the ages”
“there is a whole world of privately owned commercial, investment grade road assets, that are tolled, with publicly listed companies”
“Private toll roads were also introduced in America at the end of the 18th century, after private toll bridges were found to be extremely profitable businesses”
“The article summarises the state of 23 toll road companies that are publicly listed globally., 8 are Chinese, 4 in Italy, 3 in Australia, 3 in France, 2 in Brazil, 1 in Argentina, 1 in Portugal and 1 in Thailand”
“the Asian toll road operators offer the most attractive valuations, while some operators in Europe are also worth considering. Asian toll roads have the benefit of better economic prospects, more room for future growth in traffic, and a better balance sheet structure. They also currently offer higher dividend yields”
“Toll roads are local operations that have a fixed location, and their performance is linked to the local economy. Key drivers are, for example, the mobility of the population (number of cars), trade volumes between the node points of the highways, and the population of cities joined by them”
“China has the largest number of listed toll roads, and the eight I have listed have a total market capitalization of nearly $18bn. the Chinese toll roads have rather solid balance sheets. Their equity ratios range from 40% to 70%.”
“Existing toll roads might be sold, but highways that are now free to use may also become subject to tolls to replenish state coffers. For example, Germany is considering a toll for private cars (not just trucks) on its highways… Austria and Switzerland already charge tolls for their expressways (and some tunnels)”
Related articles
- Deciding on When and How to Toll Roads (pollutionfree.wordpress.com)
- Gauteng Road Tolls (kissimoose.wordpress.com)
- Moneymaker or drain on drivers? (dispatch.com)
- The Public-Private Indiana Toll Road Is in Trouble (businessweek.com)
- VIRGINIA POSTREL ON INFRASTRUCTURE: Too Many Public Works Built On Rosy Scenarios. "Cost overrun... (pajamasmedia.com)
- Europe paves way for unified toll payments (admiral.com)
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