The History of HSR in Australia 7 March 1989 - 1991 VFT has Prime Ministerial support It is reported that in a caucus meeting, Prime Minister Bob Hawke strongly supports the VFT project saying that it would revolutionise the geographic and demographic aspects of cities on the route. 7 July 1991 Report urging government tax concessions A confidential report prepared by Credit Suisse First Boston Australia Bank for the Joint Venture partners allegedly finds that the VFT proposal is not viable without government tax concessions. The report lists the project’s other weaknesses as: •an unsatisfactory nominal internal rate of return (15.9% for equity investors) •no established track record… •the possible non-attainment of passengers and freight market revenues •the possibility of capital and operating cost over-runs and completion delays August 1991 Cabinet rejects proposals regarding tax concessions Cabinet rejects the Joint Venture’s proposals regarding taxation treatment that would have allowed tax deductions for tax losses from construction to be passed to shareholders in the operating company… Former Federal Finance Minister Peter Walsh claims that the tax concessions as proposed would have cost $1.4 billion. August 1991 VFT Joint Venture folds The project subsequently folds allegedly because of Cabinet’s rejection of the Joint Venture’s proposals regarding taxation. Other reasons for failure may have been the suspicion that the project was motivated by real estate development, very high costs, and a disparate group of backers who lacked a coordinated and focused approach.
Posted on: Thu, 05 Jun 2014 10:49:59 +0000
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