Roads & Transportation

CSX deserves its new directors

26 Jun 2008

The US railway group is stalling over the results, but it looks like at least two of the five candidates put up by activist funds TCI and 3G have been voted in. CSX is no basket case, but its attempts to stave off the funds revealed an entrenched board that needed a shakeup.

Holier-than-thou CSX misses the point

19 Jun 2008

The US railway company is trying to fend off directors nominated by two activist hedge funds. RiskMetrics is now backing four of the dissidents five nominees. By slinging mud at the proxy adviser s analysis and judgment, CSX is again avoiding the real governance issue.

US road deal shows infrastructure’s edge on LBOs

20 May 2008

Citigroup partnered with Spain's Abertis to buy Pennsylvania's turnpike. It will have a large debt offering and will tap several different markets. The deal won t be easy. But stable cash flow and lower return expectations make these deals more feasible than buyouts.

How disconnected are China’s investors from reality?

13 Mar 2008

Very, if China Railway Construction s poor debut up just 28% is any indication. Nothing changed in China s huge infrastructure story. That the retail investors who determine the price baulked at this IPO shows just how divorced they are from the fundamentals.

Children’s fund throws tantrum over train set

8 Feb 2008

The Children s Investment Fund wants CSX shareholders to have more influence in choosing the US railway company s directors, and says a recent bylaw change is disingenuous . It s part of a valid US governance debate. But this particular complaint doesn't look wellaimed.

Green muck could fuel your car

13 Dec 2007

The ethanol industry turns cheap food into expensive fuel. It isn t particularly effective at fighting global warming either. Icky algae is far more effective at turning sunlight into energy. All it needs is some power plant emissions and a bit of technological progress.

Italian motorway fiasco descends into farce

28 Nov 2007

The Italian government behaved disgracefully last year when it blocked a merger between Autostrade and Spain's Abertis by throwing the tariffs up in the air. After pressure from Brussels, the Prodi government has finally agreed new tariffs with Autostrade only for them to be damned by its own advisory body.

Get to Paris faster. Then get stuck there.

14 Nov 2007

The Eurostar is inaugurating its new, faster LondontoParis line the day French transport workers are going on a massive strike against Sarkozy s pension reform plans. British engineering has finally caught up with gallic highspeed train technology, but the French railway operator s unions are still looking backward.

Piech may sacrifice MAN in monster truck merger

18 Oct 2007

The Volkswagen chairman might let Swedish truckmaker Scania buy German rival MAN. VW is the biggest shareholder in both. Abandoning MAN might offend German sensibilities. But since Piech's own car empire is shaping up, he no longer needs to care very much.

RBS sale of Angel Trains will test infrastructure market

24 Sep 2007

The bank needs cash and is putting its trainleasing division on the block. It is hoping to get £4bn from the sale. But with a Competition Commission inquiry looming and privateequity players more cautious, it might have to revise the price downwards.

US railway investors need a long-term outlook

7 Sep 2007

Warren Buffett has been building an investment in US railroads. The sector s stocks have enjoyed something of a renaissance. But recent operational advances are already priced in. Other trends may be positive, but investors need patience and realistic expectations.

Tube strike teaches credit crunch lessons

4 Sep 2007

The London transport system and the short term money markets are both gummed up. There are strikes by tube workers and by lenders. Despite adverse conditions, the two markets clear. But there is a shortterm cost and longterm risks, whichever way the authorities turn.

Germans head towards reluctant rail privatisation

31 Jul 2007

After months of hesitation, the Merkel government has decided to go ahead with Deutsche Bahn s partial privatisation. But the plan so far looks halfhearted. If unions and politicians prevail, the company won t attract much interest from serious investors.

Cummins guns its engine

30 Jul 2007

In the midst of last week s bloodbath, shares of enginemaker Cummins surged nearly 6% on knockout results and an upbeat earnings outlook. While the credit crunch and subprime mess still haunt equity markets, bulls can take comfort that the old economy is still chugging along.

TomTom directs its attention to map supplier

23 Jul 2007

The Dutch navigation device maker is offering E1.8bn for Tele Atlas. The rapidly growing industry is getting more rational. At 28 times ebitda, the offer is hardly cheap. The stock rose even higher. But a high price can be justified for this scarce asset.

Potholed road attracts infrastructure swarm

2 Jan 2007

Four dozen firms are pursuing the Pennsylvania Turnpike. That s 42 more than were interested in an Indiana toll road earlier this year. So far, most infrastructure action has been in Europe. But interest in the Pennsylvania road shows the infatuation has come to the US. Four dozen firms are pursuing the Pennsylvania Turnpike. That s 42 more than were interested in an Indiana toll road last year.

Scania CEO goes over the top with blitzkrieg remark

7 Dec 2006

The most astonishing thing about his outburst? That MAN, like Scania, is run by a Swede. Likening Germany s MAN to the Nazis, and himself to Churchill, suggests Ostling is ill suited to run a tieup between the two truckmakers.

Infrastructure bubble may not be wholly irrational

30 Nov 2006

At least as far as the fund managers who are sucking in money, pushing up valuations and piling on leverage are concerned. S&P warns of a dotcomstyle bubble. But heads I win, tails you lose incentives mean the behaviour could, in a narrow sense, be rational. At least so far as the fund managers who are sucking in money, pushing up valuations and piling on leverage are concerned.

Eurotunnel will test new French bankruptcy law

28 Nov 2006

Two investors think they have been crammed down by Eurotunnel and the courts. They may have a point. It seems unfair that creditors with different economic interests should be forced to vote together. The law could use a tweak.

French law rides to rescue of Eurotunnel plan

21 Nov 2006

The vote of the senior creditors next week is what really matters. And while there are angry dissidents among them, they are in a minority. The French safeguard bankruptcy process marginalises potential opponents. Bondholders can kick up a fuss, but they ve done relatively well.