Australia's Bentham IMF files suit over optimistic toll road forecasts

SYDNEY, July 29 Tue Jul 29, 2014 1:53am EDT

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SYDNEY, July 29 (Reuters) - Australia's Bentham IMF Ltd , which funds litigation, on Tuesday said it has filed court proceedings seeking A$50 million ($47 million) from a traffic forecaster on behalf of 30 investors who claim to have suffered loss because of optimistic predictions.

Bentham IMF said the investors were among many to have indirectly put money into a toll road based on data from forecaster Arup Pty Ltd, which showed almost twice as many vehicles would use the road than actually did.

The A$4.8 billion, 9 mile Airport Link in the Queensland state capital Brisbane was built under a government contract by BrisConnections Unit Trusts - a consortium of Macquarie Group Ltd and Leighton Holdings Ltd companies.

BrisConnections hired Arup which forecast average daily use would be 135,000 vehicles, local media reported.

But BrisConnections entered voluntary administration last year, reporting Airport Link traffic of only 80,000 vehicles a day during the first month of the road's 2012 opening before any toll had been imposed.

"(Arup) made some forecasts in the (investment) prospectus and the numbers obviously didn't eventuate. We say they ought to have identified that those figures were not reliable," IMF Director Clive Bowman told Reuters by telephone.

"Had reliable information been included in the traffic forecasts, people wouldn't have subscribed and wouldn't have suffered loss."

A spokesman for Arup said the forecaster would defend against the class action.

Arup provided forecasts "on the basis of stated and agreed project risks, assumptions, limitations and methodologies, all of which are set out very clearly in our reports and agreed with our clients," the spokesman said.

"That would also apply to any work prepared for the Airport Link."

BrisConnections listed on the Australian Stock Exchange in 2008 by selling stapled securities requiring payment in instalments. Arup's forecasts featured in the sale prospectus.

A year after listing, around 70 percent of investors failed to pay the second instalment because of concern the traffic forecast was too high, local media reported.

The securities were issued at A$3 and were last traded at A$0.40 in November 2012.

In a statement to the Australian Securities Exchange on Tuesday, Bentham IMF said its lawyers filed proceedings at the Federal Court of Australia.

A spokesman for BrisConnections' receiver PPB Advisory declined comment. Macquarie and Leighton were not immediately available for comment.

The lawsuit comes as Queensland prepares to sell some A$33 billion of power, port and rail assets to pay for new infrastructure. The state has set an Aug. 6 deadline to receive proposals from banks for advisory roles.

($1 = 1.0642 Australian Dollars) (Reporting by Byron Kaye; Editing by Christopher Cushing)

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