11/03/2015 - 14:40

Downer in $163m private transport play

11/03/2015 - 14:40

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Downer in $163m private transport play
TRANSPORT MOVE: Downer has bought one of Perth's bus operators.

The companies that run Melbourne’s trams and the Gold Coast’s privately owned light rail service are set to enter the Western Australian market after buying one of Perth’s major bus operators.

The Keolis Downer joint venture – owned by international tram operator Keolis and Australian contractor Downer EDI – announced today that it would pay $163 million for private company Australian Transit Enterprises.

ATE operates a fleet of more than 900 buses in three states, including Path Transit in Perth.

Path Transit is one of three privately owned companies contracted by Transperth to run bus services across metropolitan Perth.

Its competitors in Perth are Swan Transit, owned by private company Transit Systems, and Transdev, owned by French multinationals Veolia Environnement and Caisse des Depots.

Keolis Downer and Transdev have both played lead roles in the development and operation of privately owned light rail systems in Australia.

The state government is currently evaluating whether to proceed with the MAX light rail system or opt, as Transport Minister Dean Nalder has suggested, for a cheaper bus service.

Another option is to follow the lead of the Gold Coast and Sydney, which have opted for privately funded light rail systems. 

Keolis and Downer, along with construction company McConnell Dowell, railcar manufacturer Bombardier, and finance group Plenary, was contracted to build the $1 billion Gold Coast light rail system.

Since July last year, Keolis Downer has operated the Gold Coast service.

In Sydney, a Transdev consortium has recently been named as the developer and operator of a $2.1 billion light rail system, which will run 12 kilometres from the CBD to the eastern suburbs.

The ALTRAC Light Rail consortium consists of Transdev Sydney, Alstom Transport Australia, Acciona Infrastructure Australia and Capella Capital.

Capella Capital has played a lead role in two public private partnerships in WA – the $140 million QEII medical centre car park and the $232 million Eastern Goldfields Regional Prison.

Another link to WA is that the equity investors in the ALTRAC consortium include British developer John Laing Group, which is also the major private investor in Perth’s new sporting stadium at Burswood.

Downer chief executive Grant Fenn signalled today the group would be looking for more opportunities in the public transport space.

“Keolis Downer is well placed to build on this acquisition and become the leading operator of public transport in Australia,” Mr Fenn said.

The ATE purchase adds to Downer’s expansive operations in WA, which include contracts with the Public Transport Authority to supply and maintain Perth’s railcars, through a joint venture with Bombardier.

It also has a series of maintenance contracts with Main Roads in regional WA, while its mining division is one of the state’s largest mining contractors.

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