Metro Transport Sydney

AIX interest in Metro Transport Sydney:	38.89%
Other HFM interest in Metro Transport Sydney:	38.9%

Metro Transport Sydney (MTS) comprises the Metro Light Rail (Light Rail) and the Metro Monorail (Monorail). The Light Rail operates from Central Station to Sydney's inner west, under a concession that expires in 2028. The Monorail operates through Darling Harbour, linking Sydney Harbour with the central business district, under a concession that expires in 2038.

Performance highlights 2011

MTS achieved a substantial increase in earnings in the 12 months to 30 June 2011, with EBITDA of $4.1 million compared to $0.6 million in the prior financial year. This was partially due to the final settlement of the long-running legal claim against ABB Service Pty Ltd, with costs being awarded in April 2011. In addition to the $2.0 million of damages and interest awarded to MTS in September 2009, MTS received a further $3.8 million in costs. When normalised for the revenue and expenses related to this claim, MTS generated EBITDA of $0.8 million for the year to 30 June 2011, compared with $0.3 million in the prior financial year.

The Light Rail performed in line with expectations, with patronage marginally below the prior year. For the Monorail, patronage continued to contract due to the softening domestic and international tourism in Sydney, which has been adversely affected by global economic uncertainty and the strong Australian dollar. However, the Monorail showed early signs of recovering, with patronage for the 12 months to 30 June 2011 declining only 4.7 percent on the prior year, compared with a fall of 7.8 percent in the 12 months to 30 June 2010. Despite the lower patronage on the Monorail, MTS achieved strong advertising revenues which, combined with strict cost management, delivered positive earnings for the year.

Performance outlook

In February 2010, the NSW Government announced its Metropolitan Transport Plan, proposing significant upgrades to the public transport network in Sydney. This included extending the Light Rail network from the existing terminus at Lilyfield through inner-west Sydney to Dulwich Hill (the 'Inner West Extension'), and from the existing terminus at Circular Quay through Barangaroo to Haymarket (the 'CBD Extension').

In December 2010, MTS entered into an agreement in principle (AIP) with the NSW Government. The AIP establishes a framework to enable MTS to provide the NSW Government with a binding proposal for the construction and operation of the Inner West Extension, as well as providing indicative terms for the CBD Extension. The NSW Government is not obliged to accept any proposal MTS may submit.