Story emerging in Galway that the Ballinsloe to Galway tool road is heading for bankruptcy or at the very least for some serious restructuring.
The majority stake is as I understand owned by Globalvia. Globalvia is a vehicle set up as some class of investment fund into which the parent ( FCC) could offload projects that it had constructed. FCC/Globalvia are individually rather large, Globalvia claims to have a huge amount of roads under long term concession worldwide.
FCC/Globalvia are under a lot of scrutiny over some of their Spanish 'investments. Notable among them is the Cartagena - Vera AP7 where a motorway was built through a sparsely inhabited desert area and is unsurprisingly not carring enough traffic to pay off its debts. Unsurprisingly it went bankrupt early this year and I am sure that FCC and/or Globalvia have provided adequately…in my opinion the road is worthless and costs more to maintain than the low traffic numbers can cover…parts were even washed away last year in flash floods.
When Cartagena - Vera AP7 went bankrupt with debts of €550m it was carrying around 3k movements a day for a gross income of perhaps €20k a day or €7m a year. That’s a gross yield of sligtly over 1%. Genius what!!!
This week the same geniuses of infrastructure finance have admitted that another of their globally diverse portfolio is somewhat underwater. This is the Ballinasloe-Galway motorway. The motorway carries a decent whack of traffic but not as much as originally predicted. Somewhere around 12k movements, income north of €30k a day or €10m a year and debts of perhaps €250m to start with.
This is mad…they cannot charge someone €1.90 just to skip Ballinasloe
Not as big a shortfall as on the AP7 Cartagena - Vera road
I’ll say they have.
The EIB is a preferred creditor so that means, in effect, that some Spanish Infrastructure Financing genius will take the wipeout…all of it. The Spanish went buck mad on infrastructure and gave us Ghost Motorways and Ghost Airports by the shedload , Even Top Gear showed a tour of ghost infrastructure in Spain only a week back…involving cars of course.
Globalvia wrung a concession out of the authorities where they can charge tourist prices on another of their concessions ( Malaga - Marbella) from June to September. That now costs €7.30 a trip and for only 30 miles if that. Wow. In fact Globalvia like the cash cow so much they increased their stake in it in Februrary…from a partner on Ballinsaloe - Galway and all.
The Spanish came very late to the party here and were involved in perhaps 5 motorway projects at most ( out of around 35) right at the peak. Shame they had no idea how to price risk eh!!! Anyway, they’ll make some of it back on the M50 where they also have a concession.