Hills Runs Into Red Tape Over Revenue-raising Bid
Sydney Morning Herald
Saturday November 20, 1999
M2 tollroad operator Hills Motorway is experiencing delays in plans to augment the road's revenue through advertising billboards, service stations and extensions.
Chairman Mr Stanley Howard said traffic volumes on the 21/2-year-old toll road were growing steadily, though average daily volumes remain below the original 1994 forecast of 72,000.
However, the toll road, which runs through north-west Sydney, is regularly surpassing this figure on peak days such as Fridays.
``Traffic has continued to grow in the current financial year with average daily traffic exceeding 63,000 vehicles in each of the first four months," Mr Howard said.
Hills stapled securities fell 2c to $3.78, having fallen from as high as $4.90 earlier this year before bond rate rises pegged back the price.
The motorway had distributed 26,000 electronic tag ``T-pass", representing about 22 per cent of motorway users.
But the road's initiatives to boost revenues were facing delays. It was not yet possible to forecast the length of time before the motorway could erect advertising signage, with local councils still to approve the move.
Ryde Council has approved construction of two service centres, but the approval limited the size of the facilities and expressions of interest were being sought from fuel suppliers.
The group has held discussions about extending the road with the Roads and Traffic Authority and two local councils, but the plan has yet to reach the stage of an environmental impact study.
Having recently refinanced its debt, the trust expects to pay a December distribution of 25c to 27c, 20c of which represents the payout of accumulated cash reserves.
``One benefit of the refinancing should be an increased ability to achieve stable half-yearly distributions and to avoid the previous problems of intermittent distributions," Hills's Mr Richard Sheppard said.
The group expects to generate surplus cash flows in the year ahead of $30 million a year, or 16c per unit.
An increase in average daily traffic of 2,000 cars a day was expected to translate into a 1c rise in the annual distribution.
© 1999 Sydney Morning Herald