The Livable Blog

I missed this juicy tidbit when composing the previous post. Sorry to do two posts on the same basic subject on the same day, but I feel the need to share this great news. This is a very important nail in Gateway's coffin since the Port Mann / Highway 1 expansion is supposed to be financed with tolls squeezed out of Surrey commuters. Very simply, traffic has not been increasing as much as Macquarie has been counting on, and has actually been declining on some toll freeways as the recession deepens.

If Macquarie gets financing for Gateway, it will only be because the provincial government has guaranteed the traffic volumes and revenue levels. So if we drive less to reduce carbon emissions, the public would have to pay compensation to the P3 corporations.

Weak US traffic fells Macquarie Infrastructure Group

Katherine Jimenez | December 17, 2008
Article from: The Australian

WEAKER than expected traffic volume forecasts from the northern hemisphere, mostly from the US, and a dislocation in global economic conditions has forced Macquarie Infrastructure Group to slash the value of its portfolio by a massive 35 per cent.

MIG revealed that a "preliminary calculation" on its projected portfolio valuation as at December 31 showed a $2 billion deterioration over the June period and that the value of its portfolio now stood at about $6.5 billion.

[snip]

The MIG announcement follows recent commentary by legendary short seller James Chanos, who maintains a short position on Macquarie Group, that Macquarie has overpaid for the toll roads and airports.

Speaking on CNBC's Squawk Box, he said: "What we've seen is that not only has the credit environment tightened but actually things like toll roads and airports are seeing less traffic and, also, the projections haven't come.

"I think Macquarie's auditors are going to have a hard time come March of revaluing the assets, which is what they were doing every year, so they could pay dividends."

As part of its announcement, MIG said its distribution would be 10c per security, in line with previous guidance.
Full text at http://www.theaustralian.news.com.au/business/story/0,28124,24811249-36418,00.html