Wednesday, August 8, 2018

Pricing Infrastructure

This article highlights a major problem with the pricing of infrastructure.  At what point does revenue turn from a risk adjusted return and capital charge to super profits?  I would argue that Toll Roads in Australia have either gone bankrupt or created super profits for their owners, a very binary outcome.  The question is who is paying for these outcomes?

https://www.morningstar.com.au/stocks/article/transurban-profit-doubles-as-revenue-rises/169399

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