ANNUAL REPORT 2011 for Personal Use Only Use Personal For
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For personal use only CONNECTEAST ANNU A L REPO R ANNUAL REPORT 2011 T 2011 For personal use only 2 Hillcrest Avenue Ringwood VIC 3134 Australia PO Box 804 Ringwood VIC 3134 T 03 9955 1700 F 03 9955 1701 ConnectEast.com.au EastLink.com.au EASTLINK CORPORATE DEVELOPMENT CORRIDOR DIRECTORY BOARD OF DIRECTORS REGISTERED AND PRINCIPAL COMPLAINTS HANDLING ADMINISTRATIVE OFFICE ConnectEast has in place a formal Chairman EastLink Operations Centre complaints handling procedure, which AN UPdate ON DEVELOPMENTS WITHIN Anthony Shepherd 2 Hillcrest Avenue is available on our website at THE EASTLINK CORRIDOR Ringwood VIC 3134 ConnectEast.com.au. Directors Tel (03) 9955 1700 The responsible entity is a member Connecting to EastLink at its southern Fax (03) 9955 1701 end, the new 27km Peninsula Link is Dennis Cliche (Managing Director) of the Financial Ombudsman Service. taking shape from Carrum Downs to Bruce Beeren Unitholders unable to resolve a dispute † RESPONSIBLE ENTITY Mt Martha. Design and construction John Collier with ConnectEast may contact the Financial Paul Dougas Ombudsman Service on 1300 78 08 08 or company Abigroup has now commenced ConnectEast Management Limited Jim Hall visit its website at fos.org.au. construction of the project’s 45 structures. Yvonne von Hartel AM 2 Hillcrest Avenue Construction of the seamless interchange Ringwood VIC 3134 PRIVACY between EastLink and Peninsula Link is COMPANY SecretarY Tel (03) 9955 1700 already underway. The first beams have ConnectEast honours without reservation Fax (03) 9955 1701 been placed on the Peninsula Link bridge Tony Hudson our obligation to respect and protect over EastLink, and soil has been excavated the privacy of the personal information SECURITIES REGISTRAR underneath existing bridges to allow for EXECUTIVE MANAGEMENT of individuals with whom we deal. Our construction privacy policy is available on our website Dennis Cliche Link Market Services at www.connecteast.com.au. of the access ramp to EastLink. Abigroup Peninsula Link Managing Director/Chief Executive Level 1, 333 Collins St reports that Peninsula Link is on track to be Officer † appointed on 18 August 2010 Melbourne, VIC 3000 open to traffic in early 2013. the service centres will quickly become a The Key is the most active and sought after Nick McKechnie Tel 1300 551 346 or (02) 8280 7704 very welcome and popular enhancement estate in Melbourne’s south east. The development by AA Holdings of the Chief Financial Officer www.linkmarketservices.com.au to EastLink. two major BP service centres on EastLink The 27ha Eastern Recreation Precinct Tony Hudson is now well underway. The northbound A large 25,000m2 integrated office, ADVICE WARNING General Counsel & Company Secretary service centre is nearing completion and warehouse and manufacturing facility is This annual report is not an offer or expected to be open by Christmas 2011. under construction for TriMas Corporation James Tonkin invitation for subscription or purchase Earthworks for the southbound service at Australand’s The Key Industrial Park. General Manager, Corporate Affairs of or a recommendation in relation to centre are nearly finished, with completion Australand is also constructing a 27,000m2 Stephen Mitchell securities. It does not take into account of that centre expected in early 2012. building that combines two separate General Manager, Information the objectives, financial situation or Both BP service centres will include food, facilities. 33 lots at The Key have now been Technology needs of any investor. Before making retail and rest facilities as well as fuel. sold, and development is progressing on a an investment in ConnectEast Group, Murray Keen With direct connections to and from EastLink number of these. Australand believes the the investor or prospective investor should Human Resources, Risk & Safety for maximum customer convenience, response from the market suggests that consider whether such an investment is Manager appropriate to their particular objectives, in Wantirna South adjacent to the financial situation and needs and consult EastLink – High Street Rd interchange is WEBSITE ADDRESS an investment adviser if necessary. well on the way to becoming the new www.connecteast.com.au home for the State Basketball Centre and Knox regional soccer centre. The soccer STOCK EXCHANGE LISTING pavilion, synthetic outdoor pitches, car park and access road off George Street ConnectEast Investment Trust and have already been completed. The main ConnectEast Holding Trust units are stapled indoor sports stadium is expected to be and quoted on ASX as ConnectEast Group completed and operational in early 2012. (ASX Code – CEU). For personal use only The main stadium is of such a size and importance that it’s already becoming an EastLink landmark. Over 800 residential lots have now been sold at Intrapac Projects’ Somerfield development, with a further 1,000 to go. Lots in Somerfield’s fourth neighbourhood are now being sold. 140 families have already moved into Somerfield, and 180 homes are currently under construction. Somerfield CONTENTS OPERATIONAL HIGHLIGHTS 2 CHAIRMAN’S STATEMENT 3 MANAGING DIRECTOR’S Report 4 SustainaBILITY REPORT 6 A B B BOARD OF Directors 10 SENIOR MANAGEMent 11 C Corporate GOVernance 12 D FINANCIAL Report 18 For personal use only E Photography: Brett Price Photography and Life Through a Lens Photography Design: Night and Day Communications CONNECTEAST | ANNUAL REPORT | 2011 1 OPERATIONAL HIGHLIGHTS EastLink Traffic and Toll Revenue Operating Costs and Operating Cashflow 600 120 2011 2011 2010 500 2010 100 6.3%^ 400 80 72.7 300 $ million 60 68.1 58.5 200 40 183 199 169 173 100 20 0 0 Average Daily Trips Toll Revenue -8.1 ’000 $ million Operating Costs EBITDA POSITIVE CASHFLOW AND GROWING TRAFFIC AND REVENUE DROP IN OPERATING COSTS Casualty Crash Rates - Metropolitan Freeways, including EastLink, 2009 to 2010 (Source: VicRoads Information Services & Road Safety and Network Access) 10 9 9.36 8 7 7.29 7.45 6 7.03 6.64 6.40 5 5.22 5.56 4 3 2 Casualty crash rate per 100 million veh-km 2.54 1 0 Monash Princess Tullamarine West Gate Eastern Fwy Metro Ring Western Frankston EastLink Fwy West Fwy Fwy Road Ring Road Fwy For personal use only 2 CONNECTEAST | ANNUAL REPORT | 2011 CHAIRMAN’S STATEMENT On behalf of your Board I am pleased provide an update on their progress. From would significantly ease congestion at to report on the past 12 months of ConnectEast’s perspective, the key project is the western end of the Eastern Freeway, ConnectEast’s development – a year of the 27km Peninsula Link which will connect thereby enhancing its attractiveness as steady progress and consolidation that at EastLink’s southern end and will pave a route to the north of the city and as a has seen the Group build on its status as the way for easier travel to and from the reliable alternative to the Monash Freeway. a mature tollroad business. Mornington Peninsula. Construction is well However, it should be noted there is no progressed and its developers, Southern certainty as to whether and when these EastLink’s continuing traffic ramp up and Way, say the untolled freeway remains on projects will proceed. CPI-linked revenue growth has been track for completion by early 2013. supported by reductions in ConnectEast’s ConnectEast continues to enjoy a cost base and enhanced revenue Peninsula Link’s opening will be good cooperative and constructive relationship collection. This has resulted in improved news for EastLink motorists because it will with the Victorian Government and supports operating cashflow. Accordingly, we have remove the peak period bottleneck on the development of these projects in the been able to make a two cent distribution Frankston Freeway and improve travel interests of an efficient and integrated road for the year supplemented by free cash times, particularly during summer. It will network that maintains the State’s economic from reserves. also be good news for ConnectEast, with growth and living standards. We also independent traffic forecasts prepared work closely with the Government’s road In addition, the Tollway’s ongoing for the Group in 2009 by IMIS assuming agencies, VicRoads and the Linking operational performance confirms its increased total toll revenues on EastLink Melbourne Authority, and on behalf of the status as a world class infrastructure asset, of 2-3%, however under our Concession business I thank them for their ongoing with effective incident response systems, Deed 50% of any associated net revenue cooperation and support. high maintenance standards and an uplift is liable to be shared with the State. impressive safety record. In conclusion I would like to thank my Looking to the longer term, the change of fellow directors for their strategic counsel Importantly, by maintaining safe and free State Government at the November 2010 as we have strengthened the ConnectEast flowing traffic conditions we generate election has led to a change of infrastructure business over the past year. I also enhanced travel time reliability for our and investment priorities. The Baillieu commend our Managing Director, Dennis customers which we believe is a factor in Government has announced its plans to Cliche, and his team for their hard work the high rate of commercial vehicle growth redevelop the Port of Hastings, located in in growing traffic, reducing costs and on EastLink. south eastern Victoria, as an alternative improving operational efficiencies. Our Similar to experience on the M7 tollway in container port to the Port of Melbourne. collective efforts have positively positioned Sydney, EastLink’s overall traffic ramp-up It has passed legislation to create a new the Group for the longer term. period continues more than three years after independent Port of Hastings development In light of the approval by our unitholders tolling began, with 9.1% growth recorded in authority with the aim of creating a key of the Horizon Roads Proposal to acquire the 12 months ended June 2011.