here it is.27 February 2008CONNECTEAST GROUPRESULTS FOR HALF...

here it is.

27 February 2008
CONNECTEAST GROUP
RESULTS FOR HALF YEAR ENDED 31 DECEMBER 2007
AND UPDATE ON EASTLINK
Financial Performance
The ConnectEast Group (ASX: CEU) today reconfirmed that the EastLink project is on
budget and on track to open by mid-2008, well ahead of its contract date of November
2008. Approximately $2.4 billion or 96% of the total $2.5 billion construction budget
has now been expended.
ConnectEast also said it remained in a strong financial position in the wake of the
refinancing in December 2006 which locked in very competitive interest rate margins.
The interest rate on the Group’s debt is 100% hedged to 2010 and 80% hedged until
2014. ConnectEast has no requirement to refinance its debt facilities until November
2010.
ConnectEast reported a net result of $Nil for the six months ended 31 December
2007. The following items were accounted for in the Income Statement for the half
year ended 31 December 2007 – net administrative costs of $5.325 million,
depreciation of $0.857 million and an income tax benefit of $1.870 million, resulting in
an Operating Loss after Income Tax and before Finance Costs Attributable to
Unitholders of $4.312 million. However, as ConnectEast Group units were classified
as debt for the period 1 July 2007 to 21 December 2007, the result has been recorded
against net assets attributable to unitholders rather than equity, resulting in a $Nil
result for the ConnectEast Group.
The constitutions of ConnectEast Investment Trust and ConnectEast Holding Trust
were amended on 21 December 2007 to remove finite life clauses. Accordingly, the
units in both trusts are classified as equity for accounting purposes from 21 December
2007.
Annual Distributions from 1 October 2007
As previously advised and as a result of the positive progress and prospects for
EastLink and the strong financial position of ConnectEast, the Board gives notice that
it intends to declare a distribution for the period 1 October 2007 to 31 March 2008 of
5.25 cents per stapled unit. This represents an increase of 2 cents per stapled unit. Itis the directors’ intention to increase the remaining semi-annual distributions to 31
March 2010 to 5.25 cents, amounting to an annual distribution of 10.5 cents.
The ConnectEast Group’s Distribution Reinvestment Plan (DRP) is available for the
full distribution of 5.25 cents per stapled unit, 3.25 cents per stapled unit being
underwritten and the remainder funded from cash reserves.
EastLink’s Progress Towards Operation
As the many facets of the landmark EastLink project move closer to completion,
ConnectEast is finalising its preparations for the transition to operations.
Managing Director John Gardiner said the outstanding progress on EastLink’s civil
engineering works was being matched by advances in the delivery of the motorway’s
tolling, traffic management, safety and customer service elements.
“The rate of progress across the project has been outstanding and means
ConnectEast can reconfirm its high level of confidence that EastLink will be open to
traffic by mid-2008 – well ahead of the contract schedule of November 2008,” Mr
Gardiner said.
“The complex nature of the remaining tasks as well as the extensive testing and
independent verification regime required means that ConnectEast does not wish to
commit to a specific opening date at this stage.
“Suffice to say, we are focused on delivering EastLink as soon as possible, whilst
ensuring the motorway, and particularly its twin tunnels, is safe to open and that
ConnectEast can efficiently operate as a business with a high level of customer
satisfaction.”
Mr Gardiner said the Group’s preparations for operations are well-advanced. Key civil
engineering works currently being finalised include the final asphalt layers along the
motorway, completion of the interchanges at Springvale Road and the Frankston
Freeway, ongoing landscaping works, and completion of the last of EastLink's 88
bridges.
“Fit-out of EastLink's 1.6km tunnels is close to completion, with the traffic
management features (such as automatic incident detection cameras), ventilation and
safety systems steadily being commissioned and thoroughly tested.
“The safety and traffic management systems are not only related to the tunnels.
These systems are integral to safe and efficient travel along the entire 39km length of
the road.
“Of equal significance, the final stage of end-to-end testing of the complex software
components and sub-systems that make up the integrated tolling and customer
service system is moving towards completion,” Mr Gardiner said.
From a corporate perspective, ConnectEast continues to build up its team and
infrastructure in readiness for operations. The recent official opening of the Group's
corporate headquarters in Ringwood, co-located with the EastLink Operations Centre
(ELOC) adjacent to the motorway itself, marked a key milestone in preparations.
ConnectEast has also now opened all five of its customer service centres in major
shopping centres strategically located within EastLink's 39km corridor. Staff are now
engaging with our future customers.
“Consistent with our previous experience at mobile displays and information booths at
local community events, the feedback from visitors to the EastLink shops has been
overwhelmingly positive, with an ever-growing sense of anticipation of the day
EastLink will open,” Mr Gardiner said.
“People are increasingly frustrated by traffic congestion in Melbourne's east and
south-east, and are impressed by the sheer scale of EastLink and the potential travel
time savings and improved transport reliability it will bring.”
To build on this positive feedback, ConnectEast will shortly begin the first phase of its
marketing campaign for EastLink with the commencement of advertising targeted at
local residents and businesses.
Mr Gardiner said the prospects for EastLink continued to be highly encouraging,
reflected in the strong commercial and industrial activity along the tollway corridor as
businesses move to take advantage of the enhanced connections that will be
delivered.
Companies such as Jayco, Leighton Properties, Salta Properties, Pellicano Builders
and Grenda Corporation have secured large holdings of land in the south-east of
Melbourne. Australand has established the 100 hectare South Park Industrial Estate
in Dandenong South adjacent to EastLink and has already acquired high quality
tenants such as Priceline, Allied Pickfords and San Remo Foods.
In relation to traffic projections, ConnectEast has continued to test and re-evaluate its
original forecasts for EastLink by monitoring three years of real traffic and travel time
trends in the corridor and comparing these to projected growth during this time. The
Group's confidence in those forecasts has been maintained.
“Our anticipation of a relatively fast ramp-up phase of around 15 months for EastLink
to achieve steady state traffic volumes is primarily based on the wide acceptance of
electronic tolling in Melbourne, the presence of more than one million tags in the
marketplace and the high level of congestion on alternative routes,” Mr Gardiner said.
“We have already recruited and trained most of customer service team, with around
160 people currently employed at our Mount Waverley contact centre and in our five
retail stores. This number will rise to around 200 when EastLink opens to traffic.
“Customers will be able to engage with ConnectEast through a range of convenient
avenues, including online at EastLink.com.au; at our five retail stores and the
customer service centre at Ringwood; by telephone to our 24 hour contact centre; and
at hundreds of participating Australia Post offices, Bill Express newsagents and Coles
Express outlets throughout Victoria.”
Mr Gardiner noted the interoperability agreements that have been finalised with other
Australian tollway operators, including Melbourne's CityLink, enabling customers to
travel on all tollroads in Australia. No one in Australia needs more than one toll
account to use any Australian tollroad.
Project Milestones
• $2.4 billion (96%) of the total $2.5 billion construction budget has been expended.
• Bulk earthworks involving 7.3 million cubic metres of fill and 6.1 million cubic
metres of cut earthworks have been completed.
• The untolled Dandenong Bypass opened on 9 December 2007, almost 12 months
early.
• Lining of the twin 1.6 km tunnels has been completed. Asphalting in the tunnels
was completed in early February 2008. Light green architectural panels are being
installed throughout the interior of the tunnels, with more than half installed to
date.
• The current focus in the tunnels is on the complex mechanical and electrical,
communications, fire emergency services and systems. All 24 jet fans have been
installed, with testing and commissioning being progressively undertaken.
• To date, 90% of the asphalt required has been laid along the motorway.
• Work is nearly complete on all 88 road, creek and pedestrian bridges with 85 of
these bridges considered structurally complete. Works continue on the Springvale
Road interchange, Frankston Freeway connection and Harrison Street pedestrian
bridge.• Over 90% of the total noise walls (post and panel, cantilever and composite acrylic
panels) have been installed.
• Around 85% of dry land and wetland planting has been achieved.
• More than 90% of the three metre wide EastLink Trail (shared use path) has been
completed.
• End-to-end testing of the integrated tolling and customer service system has
commenced.
• Final commissioning and testing of the 13 toll points along the motorway is well
advanced.
• Information signs are being progressively delivered and installed, including travel
time signage, and side mounted and overhead gantry signage.
• Mechanical and electrical installation continues along the entire motorway,
including the installation and energisation of traffic signals and light poles.
• Recruitment of staff by Transfield Services, ConnectEast’s operations and
maintenance contractor, is complete, with training and familiarisation with EastLink
underway.
• Recruitment of key customer services management and staff has been completed
and training has commenced.
• Customer service centres in five shopping centres along the EastLink corridor
have been established and are now open to the public.
• ConnectEast’s corporate headquarters and the EastLink Operations Centre in
Ringwood officially opened by the Minister for Roads and Ports on 15 February
2008.
• Fabrication and roadside installation of the EastLink Art Collection is underway.

Interesting to see that the tunnel is the only thing not done yet. We are very very close to completion i think.