Market mauls tollway debutant

In an opening day performance eclipsing even the falls experienced by the sharemarket laggards RHG (formerly known as RAMS Home Loans Group) and Empowernet on their debuts last year, BrisConnections felt the full brunt of the turmoil affecting toll road and other infrastructure stocks.

Listing the shares after the first of three $1 instalments due over the next 18 months, units in the Brisbane toll-road concern slumped 59c to 41c. At one point they hit 38c.

But the tumble did not unnerve BrisConnections' chairman, Trevor Rowe, who said the toll-road concern would soon prove its worth. "At 40c, our yield is over 28 per cent, so it's clearly over-sold," Mr Rowe said. "Clearly we are in a volatile market and if you look at the turnover today it's incredibly light."

But after he made those comments to the Herald, trading in the company picked up, with 44 million units, or 11 per cent of its units, being traded by the close of trading.

Mr Rowe rejected market concerns BrisConnections had been overly confident in its traffic forecasts. He said unlike Sydney's troubled Lane Cove Tunnel, BrisConnections comprised three toll roads in one, which would be well used.

"This is a direct road to the airport, a direct road to Brisbane's northern suburbs, and from the northern suburbs to the airport," he said.

The $4.8 billion Airport Link and Northern Busway project - for which BrisConnections has a 45-year concession - is due to open in 2012.

Despite the tumble, BrisConnections' planned three-stage $1.2 billion initial public offering has already been fully underwritten, mainly by institutional investors including Macquarie Capital Advisers, Credit Suisse, Deutsche Bank and JP Morgan.

Mr Rowe said the forecasts provided by the consultants Arup were "conservative" - in contrast to the overly ambitious targets set by the ill-fated Lane Cove and Cross City tunnel projects in Sydney.

"This project can withstand a lot of pain because it's so robust," he said. "Traffic can be off 40 per cent [its original forecast] and we can still can still service our debt."

But some analysts remain less confident. Austock's infrastructure analyst, Andrew Chambers, said he shared concerns in the market that BrisConnections' forecasts were "overly optimistic".