👉 Background: Transurban operates 19 toll roads across Melbourne, Sydney, and Brisbane. In fact, the only tolls in Australia that Transurban doesn't own is EastLink in Melbourne and the Sydney Harbour Bridge and Tunnel.

👉 What happened: When Eastlink's owners put the toll road up for sale, Transurban was one of the likely acquirers. But now, the ACCC has blocked Transurban from bidding for the EastLink toll road because it would "substantially lessen competition" for future toll road projects in Victoria.

👉 What else: Given the long-term nature of these contracts, the concern is that it could create a monopoly that is hard to undo.

What's the key learning?

💡Long-term contracts may offer stability for infrastructure projects, but they can have long-term consequences on market competition.

💡Here's how it works:

• The Australian government typically contracts a toll operator to build a toll road.
• Once they build the toll road, they get the rights to operate the toll road too.
• The toll operator generates all the revenue from that toll road for a fixed period of time... which is usually around 30 years.

💡These long-term contracts can act as a huge barrier to entry for new competitors - so the ACCC is now being extra cautious because one little oversight can have long-lasting consequences on the competition.

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