Australia’s Macquarie, responsible for some of the biggest road-infrastructure “private-public partnerships” of the early and mid-2000s, may pull the plug on its stake in one ambitious investment, the South Bay Expressway in San Diego.
TOLLROADSnews reports that a Macquarie entity recently disclosed the following:
Given its current financial position, the [South Bay Expressway ownership company] is currently working with key counterparties (including lenders) to attempt to resolve these issues. Should these negotiations break down or be unsuccessful, SBX is likely to come under the control of the senior secured lenders and bankruptcy or foreclosure may follow at any time thereafter.
The culprits include over-eager traffic and financing projections by Macquarie and its lenders. (One lender is the U.S. government.)
Macquarie’s experience here and its similar travails on the Indiana Toll Road mean that lenders are unlikely to be as generous with their financing for infrastructure projects in the future. PPPs are still possible, but they’ll likely involve more financing from the government.
Anyway, to see what a PPP would look like, Albany-style, read this.