Operators struggle to maintain profit despite stable revenue growth
Melbourne, Australia (PRWEB) May 06, 2013
The Toll Road Operators industry has grown steadily over the past decade as governments have sought to lower the cost of transport infrastructure through public-private partnerships (PPPs). As a result, industry revenue is projected to grow at a compound annual rate of 3.5% over the five years through 2012-13 to $2.0 billion. The completion of new toll roads and increased traffic on existing ones has supported this growth. Over 2012-13, industry revenue is expected to increase by 4.2%.
According to IBISWorld industry analyst Caroline Finch, “The industry's revenue streams are, in theory, relatively stable. Industry revenue is highly correlated with population growth.” More people mean more cars, even though growth in car ownership per capita has stabilised in the past 10 years. Operators with established assets in mature markets such as New South Wales have benefited in the past five years, as public roads and public transport have become more crowded.
Large expansion in industry revenue results from increases to capacity, i.e., the opening of new toll roads. This has been a feature of the past five years, driving industry revenue growth ahead of population or business activity. However, the effect on industry profitability has been negative. “Many of new projects, especially in Queensland, have struggled to attract traffic volumes at toll rates sufficient to continue operations,” says Finch. In April 2013, the operators of two QLD toll roads were in administration proceedings.
The failure of toll road projects over the five years through 2012-13 casts a shadow over the coming five years for the industry. Government enthusiasm for capacity expansion is expected to be subdued and the private sector is likely to be wary of the robustness of traffic forecasting. Growth in revenue from the Toll Road Operators industry's existing concessions is expected to support industry performance, with less capacity expansion in the wings to support higher growth.
The industry’s three largest players are the Transurban Group, Queensland Motorways Limited and Horizon Roads Group.
For more information, visit IBISWorld’s Toll Road Operators report in Australia industry page.
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IBISWorld industry Report Key Topics
Toll road operators provide toll road and bridge operations.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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