What to look for., page-27

You make a good point around a high proportion of users switching from public transport to cars as we return to normality - explaining why we are seeing the uptick in TCL's share price. Which is why I stressed that my pessimism was more on a long term basis and i'm happy to remain a holder until $15.

Like many other assets in Australia (eg: residential high rise property), TCL has also been underpinned by the unspoken 'Big Australia' policy which all levels of government have promoted. Will the Big Australia policy continue in a post COVID world, or is migration going to be stalled because of the public's sensitivity to incoming future virus risk?

The other point to add here is that, for TCL to continue to grow, it will increasingly have to play the role of a developer (not a just an opportunistic buyer of distressed assets). There are no more operational assets for them to buy in Aust. Toll road development can be a very dangerous place to operate, and the recent experience in Melbourne (with John Holland and CIMIC basically terminating the tunnelling contract at West Gate) carries heightened risk and reduced earnings potential vs brownfield assets. I don't see WestConnex being an accretive asset for them either - capital costs and tolls are way too high.

In addition, with interest rates at practically zero, hard to see the company getting any further cost of capital benefits from here either. All infrastructure assets are facing this bottoming out point on cost of capital.

I could well be proven wrong on this (ie: population growth continues to surge, people abandon public transport for cars, petrol prices remain low) - but I feel like the risks are more weighted to the downside over a longer term horizon.