Roads & Transportation

Crumbling America demands smarter repair blueprint

13 May 2015

Tuesday’s tragic Amtrak crash is stoking conversations about U.S. infrastructure. Just a day earlier, a trio including Evercore’s Roger Altman urged a higher gas levy and tax-free bonds to fund new projects. The challenge will be getting businesses to shoulder more of the costs.

Alstom’s growth train has Chinese twist

6 May 2015

The French group’s focus on transport is paying off, with train orders up 10 pct and rising margins. But the merger of two larger Chinese rivals intensifies competition in Alstom’s global markets. Teaming up with Bombardier or Siemens may be its next destination. 

Bombardier may be the little Canadian that can

30 Apr 2015

The manufacturer is mulling selling a majority stake in its rail unit to a Chinese rival. Political objections are likely: even home-improvement chains are off limits to foreigners. Using the proceeds to keep its aviation business flying, though, may keep critics in the hangar.

Serial dealmaker makes smart truck stop in France

29 Apr 2015

Bradley Jacobs’ XPO is paying an undemanding 3.2 bln euros with debt for French trucking firm Norbert Dentressangle. The U.S. buyer’s timing is good: the euro is weak while France is increasingly open to deals. And the capital markets could hardly be better for M&A machines.

China SOE fusion could topple cult of competition

28 Apr 2015

A mooted $569 bln merger between Sinopec and PetroChina looks a step back for reform and efficiency. But competition between state-backed firms isn’t always helpful. A more demanding shareholder, pricing power and superior regulators could be better spurs to improve performance. 

China’s answer to Uber may be worth more than Uber

13 Apr 2015

Twin taxi-hailing apps Didi and Kuaidi Dache may be worth $14 bln – twice their last reported amount – a Breakingviews calculator shows. They could even close in on the $40 billion valuation of Uber itself. All hangs on what passengers will pay for something they now get free.

U.S. toll road investor dodges predecessors’ ditch

12 Mar 2015

Australia’s IFM will pay $5.7 bln for a bankrupt Indiana turnpike operator, 50 pct more than Macquarie and a Spanish partner shelled out in 2006. Less than half the amount is debt, though, and the road is in far better shape. That should help the firm steer clear of any potholes.

India goes back to future with $137 bln rail push

27 Feb 2015

The government’s ambitious plan will require finesse in raising money. But the investment case is strong. India’s British rulers reaped huge productivity gains by building out the railways 150 years ago. Modernizing the dilapidated network could produce even better returns. 

Renault’s turn of speed needs careful handling

12 Feb 2015

The French carmaker has beaten expectations for 2014 by a mile. A 30 pct jump in operating profit, plus an optimistic outlook, pushed the shares up 9 pct. Europe’s recovery should keep Renault on the road. But worsening woes in Russia are a big worry.

Heathrow upstarts have London’s best airport plan

4 Feb 2015

A new runway may be finally built near the UK capital at a cost of up to $28 billion. The three rival proposals all seem to be financially viable, but the independently conceived scheme that would double the length of one of Heathrow’s existing runways looks best placed.

China rail merger reveals topsy-turvy reform logic

31 Dec 2014

The People’s Republic is re-creating its domestic train-building monopoly to boost competitiveness abroad. State-backed CSR will buy almost identical CNR for $14.4 bln. Synergies may take time to realise but the new giant should be able to turn up the heat on foreign rivals.

Baidu’s Uber stake is more hype than substance

17 Dec 2014

The Chinese web giant is already behind rivals Alibaba and Tencent in mobile taxi-apps. Strategically the tie-up looks like a coup. But without financial terms, investors are left in the dark. Uber’s controversial track record and Baidu’s shrinking margins add to the uncertainty.

German carmakers tune up the basics of banking

5 Nov 2014

The in-house operations of VW, Daimler and BMW are all solidly profitable. They follow some basic rules that rivals and bigger institutions often forget. Lend to people who can repay, expand carefully and find secure and cheap funding. Successful owners also help.

BMW extends lead over Daimler

4 Nov 2014

Quarterly results show the Munich carmaker is growing profitably across the world. That makes life harder for arch-rival Daimler, which wants to overtake BMW as the top premium carmaker by 2020. BMW’s share price does not fully reflect that strength.

Train merger could be China’s ticket to elite club

29 Oct 2014

Coupling together two big train-builders into a domestic monopoly sounds like a step backwards. But it would help China better compete against an oligopoly of big, rich-world rivals. For a growing superpower, that probably seems a good enough reason to bend the market norms.

Beijing’s strap-hangers put socialism to test

29 Oct 2014

Increasing the capital’s subway fares for the first time in seven years raises a development dilemma. Should China stump up for public goods like transport, or ask commuters to pay their way? Markets imply the latter, common sense says subsidise. Expect the worst of both worlds.

Most of the heavy lifting lies ahead for Volvo

24 Oct 2014

An unexpected earnings jump propelled shares in the Swedish truck maker up 10 pct. But Volvo is facing an uphill struggle. The outlook for its core European market is weak, and its new cost cutting targets are ambitious. 

Daimler can turbo-charge its cash return

23 Oct 2014

The German carmaker is boasting of record sales, rising margins and rich proceeds from asset disposals. But its dividend has not grown in line with a recovery in performance. After years of parsimony, Daimler can afford to be more generous to shareholders.

Edward Hadas: Surge pricing and the just economy

15 Oct 2014

Car service Uber raises its prices to balance supply and demand when drivers are reluctant and customers are eager. That works, but the method has an anti-social edge. For the common good, it’s better to start with just prices and add allocation by patience, need or merit.

Bankrupt toll road leaves taxpayer sitting pretty

30 Sep 2014

Private investors in a 157-mile Indiana toll road are set to be wiped out in bankruptcy court – but only after they sunk millions into new lanes and tolling technology. It’s a rare example of a boom-era deal successfully transferring risk from the public to the private sector.