By a staff reporter
Litigation funder IMF Australia is bankrolling a $450 million class action on behalf of investors in the defunct Brisconnections against private engineering consultancy Arup Pty Ltd over its "optimistic" traffic forecasts for the Brisbane airport link toll road.
IMF investment manager Andrew Charles said the action was only open to investors who bought into the Brisconnections initial public offering in July 2008, when units were $1 apiece.
The suit will accuse Arup Pty Ltd, a subsidary of London-based consulting giant Arup Group, of breaching the Corporations Act and negligence over traffic forecasts in the product disclosure statement accompanying the IPO.
BrisConnections was put in voluntary administration in February, less than seven months after the airport link opened, after revenue generated from its tolls failed to offset the level of its debt.
BrisConnections management company could also be liable under the action "for making a defective product disclosure statement available to investors".
Mr Charles said the sponsors of the IPO were unlikely to join the action, valuing it at up to $450 million.
IMF will allege that Arup breached the Corporations Act by not including all materially relevant information in the product disclosure statement on its traffic forecasts, and was negligent for providing figures without a reasonable basis.
Maurice Blackburn, who is investigating the action with IMF, said Arup’s traffic forecasts for the airport link in the PDS had proved wildly optimistic.
Arup forecast that 179,276 vehicles would use the link daily after six months of operation but in December 2012, traffic numbers averaged less than 47,102 per day, 26 per cent of the forecast despite despite toll free periods and discounted tolls.
The airport link opened last July.
"It is likely that information about these lower traffic forecasts would have had a material influence on the decision of investors to invest in the BrisConnections Unit Trusts," Maurice Blackburn said.
The action will also charge that Arup omitted reference to substantially lower traffic forecasts for the link that had been prepared by other traffic experts.
Mr Charles said IMF was carrying about $20 million in risk by bankrolling the action.