The common thread

We're had two financial disasters in NSW lately - the Cross City Tunnel going into recievership, and now the Waratah trains consortium needing a bailout from the state government.

Here are snippets from two articles:


Sydney's Cross City Tunnel could soon enter receivership for the second time, due to a dispute between its owners and the state government about stamp duty.


The Office of State Revenue has given the owners of the motorway until the end of the month to pay a reported $60 million bill.


The bill relates to the $700 million price the owners of the motorway - Royal Bank of Scotland, Eiser Infrastructure Partners and Leighton Holdings - paid when they bought the roadway out of receivership in 2007.

and another:


The major private partner in the troubled Reliance Rail project has welcomed a restructure of the group's financing.


The NSW government has agreed to invest $175 million in 2018 in return for 100 per cent of the equity in Reliance Rail, which is delivering the $3.6 billion Waratah train project.


The troubled consortium consists of engineering firm Downer EDI, Royal Bank of Scotland and interests managed by AMP Capital Investors.


Notice the common factor?

The Royal Bank of Scotland.

Here's what The Spectator had to say about them back in December:


Voodoo business


West Register is the name of a narrow street in Edinburgh that my team of local researchers tell me boasts a cocktail bar called the Voodoo Rooms. West Register is also the name of a subsidiary of the Royal Bank of Scotland, whose fine old pre-Goodwin headquarters is just around the corner. This is the subsidiary into which RBS injected its ‘distressed’ property assets — commercial real estate of which it took ownership in lieu of repayment of loans that the bank (or its NatWest arm) should never have offered in the first place.


West Register’s purpose in life is to sell off these assets whenever someone makes a halfway decent cash offer, and this week it got shot of 918 tenanted pubs, known as the Galaxy estate, to Heineken for £412 ­million. The holding was a relic of the lost era, a decade ago, when owning pub chains — seen as cash-generative businesses, ripe for improvement and sitting on solid freeholds — was a hot fashion for City investors. Now pubs are closing all over the country, and Heineken in turn is expected to dispose of many Galaxy sites that are now unviable.


Taxpayer-funded RBS is well out of the struggling pub trade, but still has tens of billions worth of other skeletons in its cupboards. West Register has also just sold Great Leighs racecourse in Essex, and is trying to make something remunerative out of Newhaven docks in Sussex. Its portfolio includes shopping centres where no one wanted to shop, hotel and apartment schemes where no one wanted to lay their head, and acres of empty offices. Behind every distressed asset is a loan decision that looked good at the time and earned someone a bonus. If trade ever falters at the Voodoo Rooms, West Register could turn it into a showroom for everything it has left to sell and rename it Voodoo Banking.

You have to wonder how much due diligence was undertaken when Labor was in power if they allowed this banking disaster to get involved in funding a variety of projects. I wonder what other NSW projects they've got their sticky fingers in?