"The last time we bid against Cintra we lost by $1 billion on a $3 billion project, and if we put our financial metrics through some of the other bidders' assets that they won over the last year or two, we'd get blown away by them as well."

Transurban lost a tender to build express lanes on Virginia's Interstate-66 highway in 2016 to Spain's Ferrovial, which owns Cintra.

Transurban had acquired about one-quarter of its tollroads out of receivership for half their original cost, and was prepared to do the same on WestConnex, Mr Charlton said.

"When excessive prices are paid, the assets often come back."

Transurban plans to submit a conditional bid for WestConnex as part of a consortium in the next few months, with final bids due mid-year.

Cintra is also expected to bid with a partner, the Plenary Group.

Infrastructure lift

Transurban was "buoyed" by US President Donald Trump's $1.5 trillion infrastructure plan, which relies on states and the private sector to build new roads and railways, Mr Charlton said.


It is currently looking at opportunities in Maryland, where the state government is considering bringing in private investment to add express lanes to tollroads. It already owns and operates two tollroads in the neighbouring state of Virginia.

Transurban's net profits for the six months to December rose 280 per cent from $88 million a year earlier, aided by favourable movements in net finance costs and non-cash income tax benefits.

Proportionate earnings before interest, taxation, depreciation and amortisation (EBITDA) – which measure income relative to the company's ownership stakes in its toll road assets – rose 11.6 per cent to $911 million.

Group proportional EBITDA margins rose to 75.4 per cent from 74.7 per cent a year earlier. Transurban makes its highest profit margins in Melbourne, where margins run at 88.5 per cent, and Sydney, where they run at 81.2 per cent.

Group toll revenues rose 9.6 per cent to $1.13 billion, while construction revenues jumped 69 per cent to $462 million. The company passes construction revenues through its books when it manages projects.

Toll revenue increases were driven by both traffic growth and higher toll fares, with increases in truck tolls boosting income in Sydney.

Average daily traffic growth across all of Transurban's roads in Australia and the US rose 1.4 per cent, although some roads were disrupted by construction works.

Average daily traffic fell 1 per cent in Melbourne but was up 2.9 per cent in Sydney, up 3.5 per cent in Brisbane and up 3.4 per cent in the US.


Transurban said all projects in its $11 billion development pipeline were on time and on budget. Construction has started on the company's biggest project, Melbourne's $5.5 billion West Gate Tunnel.

A political backlash against the tunnel was "ridiculous" because Melbourne needed new roads to ease congestion, Mr Charlton said.

Mr Charlton has expanded his executive management team to 12 people (excluding the CEO), half of whom are women.

Transurban will pay an interim dividend of 28¢, in line with analysts' expectations, compared with 25¢ a year earlier.

The company reaffirmed guidance for a full-year dividend of 56¢, up almost 9 per cent on a year earlier.

Transurban's shares closed down 2¢ at $11.33. The stock is up 3 per cent over the past 12 months compared with a 1.6 per cent rise in the S & P/ASX 200.