RTR4LH7O
A man walks along a newly-built tunnel, consisting of rainbow colours, in Zhengzhou, Henan province January 13, 2015. The 400-metre-long tunnel is the first of this kind in China, local media reported. Picture taken January 13, 2015. REUTERS/Stringer REUTERS/Stringer

A planned nine-kilometre tunnel project that will connect Sydney’s northern suburbs with the city’s Orbital road network has received a $515 million investment from the Canada Pension Plan Investment Board or CPPIB. The latter is the body that invests the $234-billion portfolio of assets of Canada Pension Plan. It was the fund’s first large investment in unbuilt infrastructure.

Apart from CPPIB, the consortium that has stakes into the new tunnel motorway called NorthConnex include money manager Queensland Investment Corp., toll-road developer Transurban Group, along with the New South Wales and Australian governments. The project costing A$2.9 billion is expected to be completed in 2019.

CPPIB will have a 25 percent ownership stake in the infrastructure project. Transurban is majority owner at 50 percent. Queensland owns the remaining 25 percent.

The new tunnel is expected to slash freight traffic congestion on an existing arterial road in the region, thereby relieving easing vehicular traffic north of Sydney. It is dubbed to be the longest road tunnel project in Australia.

A report by Reuters said this is not the first time CPPIB will be investing in Australia. In fact, it already has placed sizable investments in a number of established Australian infrastructure assets like roads, airports, real estate and telecommunications companies. Australia’s reliable annuities-style returns and relatively stable regulatory environment were the factors that prompted CPPIB to invest in the land Down Under.

CPPIB has investments in Australia’s Westlink M7 as well as in Broadcast Australia. As of end September 2014, CPPIB’s investments in Australia, including real estate, infrastructure, public equities, real estate investment funds and direct investments, totalled C$7 billion, according to the Wall Street Journal. Its worldwide infrastructure investments totalled C$12.6 billion during the same period, portal Pension and Investments said.

In late January, Mark Wiseman, CPPIB chief executive, called on urged to place more of the country’s investments in Asia where the world’s fastest growing economies, “the emerging markets,” rather than focus on the local market to improve Canada’s international business success.