Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Rachael Ward

Watchdog puts a roadblock on Transurban bid for rival

The competition watchdog has blocked Transurban buying the EastLink toll road in Melbourne. (Julian Smith/AAP PHOTOS)

Toll road giant Transurban's bid to acquire a majority interest in the only other private toll operator in the country has been rejected by the competition watchdog.

The Australian Competition and Consumer Commission opposed Transurban's bid to acquire Horizon Roads, the operator of EastLink, on the grounds it could reduce competition for others to enter the Victorian market.

The company operates CityLink and will take charge of the West Gate Tunnel when it opens, while the Victorian government will operate the North East Link, which is also under construction.

If the Horizon deal was ticked off, Transurban would operate every private sector-controlled toll road in Australia, says the commission's chair, Gina Cass-Gottlieb.

She said the commission placed significance on concerns raised by the Victorian government in a submission.

"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," Ms Cass-Gottlieb said.

She said if Transurban didn't acquire Horizon it would likely be taken over by another long-term rival and used as a platform to develop new ways to compete for other toll roads.

Transurban operates 11 major roads in Sydney, six in Brisbane and has interests in North America. 

The commission said the company had an advantage over rivals due to its scale and in-house modelling, meaning the acquisition would entrench that position.

The investigation also considered the extent to which the state government could "constrain" Transurban and level the playing field for other operators.

If Transurban proceeds with the acquisition, the commission could apply for an injunction in the Federal Court to stop it happening.

A spokesperson for Transurban said it was disappointed with the decision and was considering a legal challenge.

"There would be no lessening of competition if Transurban were to own a majority stake in (Horizon), largely because the Victorian government sets the tolls, determines who the operator is and controls the contract," the spokesperson said.

"We are confident that if this transaction were legally considered by a court, the court would find no substantial lessening of competition."

The government said it welcomed the commission's decision.

"The Victorian government made a submission to the ACCC expressing concerns about the impact on competition in the toll road sector if Transurban was to acquire Horizon Roads," a spokesperson said.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.