High speed rail fans, above all those with means to become co-owners from the beginning, turn out to need convincing that their pet project - dubbed a “necessity” – has a business case that stacks up, at least at its first stage of funding.
Liberty Mutual Insurance are involved as underwriter on a “capital guarantee” included in a draft pitch for a “stakeholder offer” under review by selected Australian financiers.
A draft summary seen by Banking Day promises a return of 8.6 per cent per annum, for early stage investors in High Speed Rail Development Authority LP.
The early backers will be paid out by Liberty or the projects own funds in August 2023.
The “Development Authority” is for now a private consortium backed by the SUMO Group of companies.
This offer “facilitates building a balance sheet for the Authority … which it needs to deliver confidence” and is not otherwise intended to be part of a total project cost estimated (in late 2017) at “about $114 billion (in 2012 terms), comprising $64 billion between Brisbane and Sydney and $50 billion between Sydney, Canberra and Melbourne,” on the most recent study for the Department of Infrastructure and Transport.
The green light depends on Labor winning the election and a enabling law of Antony Albanese’s proposed High Speed Rail Planning Authority. His private member’s bill on high speed rail lapsed yesterday with the dissolution of parliament.