Am a bit worried about the geopolitical risk with TCL, if Government changes hands, in Victoira or NSW, the contracts could be conceivably ripped up without compensation?
The event of an Australian state government ripping up contracts without any form of compensation, while not inconceivable, looks highly unlikely to me.
If you remember what happened with the East West Link in 2015, for instance, the EW Connect Consortium did manage to reach reasonably quickly an agreement with the Victorian Government to cover the costs incurred to the point when the project was abandoned.
I see no reason to think that anything different would happen with Transurban in the event that a change in state government did entail a cancellation of pre-existing construction plans. A less amicable outcome would be seriously detrimental to any future investment into Australian infrastructure, which, beside political posturing, is in no one’s interest.
TCL Price at posting:
$11.50 Sentiment: Buy Disclosure: Held
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