IMF: Funding more litigation
We last wrote about Bentham IMF Limited (ASX: IMF) back in February, and now point out the company has filed proceedings on behalf of former and current BrisConnections unit-holders against Arup. Arup are the engineering consulting firm who prepared the traffic forecasts for the Brisbane Airport Link toll road.
Conducted as a public-private partnership, the project was mired in controversy from the time the winning consortium – comprising Macquarie Group, Thiess and John Holland – was awarded the contract.
BrisConnections was listed on the ASX in July 2008 as a unit trust, via $1.2 billion worth of installment receipts. Arup had forecast traffic of 135,000 vehicles per day, one month after the project opening (July 2012), growing to 160,000 by July 2015 and to 291,000 by 2026. By the time BrisConnections went into receivership in February 2013, traffic numbers were running at 48,000 vehicles per day.
Both The Montgomery Fund and the Montgomery [Private] Fund own shares in Bentham IMF Limited.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
enrico rumi
:
Had a friend who worked for a consortium on the tender for BrisConnects that did not win, who mentioned that traffic projections by winning bidder were at best, grossly inflated. They had to be to win the tender. BrisConnects instalments were worse than Lehman’s triple AAA rated securitised mortgages. Someone should be held accountable for peddling this garbage to unsuspecting investors. The damages/investor losses have nothing to do with the quantum of fees but the size of Arup’s consulting business. In this case, Arup may be going the way of Arthur Andersen.
Reading of the lawsuit gave me the impetus to double my position in IMF which I was looking to do regardless, albeit at a higher cost base.
martin evans
:
Would not touch this with a barge pole. Totally exposed to a change in
legislation.
LUCAS
:
I’m on the other side of the coin on this.
Forecasts are forecasts. There may be some science to them but you know for a fact that these firms who are going to charge 7 digit fees to churn out data will probably try to substantiate your case as opposed to the opposite.
The whole BrisConnections debacle, even from the 2009 Nick Bolton saga is a sham and a black mark on Corp Governance. I believe there’s only one regulation in life that works: failure. If the project doesn’t work, don’t go whining to the courts etc. a 4.7 million fee to do traffic forecasts for a project
I lost a tonne in AFG – didn’t see the signs. I got burned, but I learned my lesson.
The project was stupid from the start. A road merely 6ish KM long, something like 5.7km of that a tunnel, it’s just a Point A to Point B with no real connectivity – that’s why it sucked. CityLink on the other hand was long, it was internetworked, it worked to connect to City, to Airport, to Western Suburbs.
The roads that fail are the tubes from A to B. The roads that go well are roads that are multi-destination roads that are useful to interconnect and become a conduit. EastLink can take you from Portsea to the City in Melbourne. It can also take you from Doncaster to Dandenong in about 1/2 the time. Sure it was slow on the uptake but there’s a whole growth corridor out there that will be tapped.
I can see it with my own eyes the volumes increasing and on a cost per trip basis it’s the cheapest in the country.
Whoever thought this was a great idea to go to court to try and recover funds from a consulting form where less than 1% of the projects funds were spent, is naive and just throwing good money after bad. Give up.