Corporate Report for the year ended 30 June 2022
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Section B: Notes to the Group financial statements for the year ended 30 June 2022
Section B: Notes to the Group financial statements for the year ended 30 June 2022
B21 Other liabilities—concession and State loan liabilities
2022
2021
$M
$M
60 80
M1 Eastern Distributor concession notes
56 77 82
M2 Motorway promissory notes
State loans
209
M1 Eastern Distributor The Eastern Distributor project deed between Airport Motorway Pty Limited, Airport Motorway Trust and Transport for New South Wales (TfNSW) provides for annual concession fees of $15 million during the construction phase and for the first 24 years after completion of construction of the M1 Eastern Distributor. Until a certain threshold return is achieved, payments of concession fees due under the Project Deed will be satisfied by means of the issue of non-interest bearing concession notes. The face value of concession notes on issue as at 30 June 2022 is $375 million (2021: $360 million). M2 Motorway The Hills Motorway Trust has entered into leases with TfNSW. Annual lease liabilities under these leases total $13 million (2021: $12 million), indexed annually to the CPI over the estimated period that the M2 Motorway will be used. Until such time as a threshold return is achieved, payments under these leases can be made at any time at the discretion of the trustee of the Hills Motorway, by means of the issue of non-interest bearing promissory notes to TfNSW. The face value of promissory notes on issue as at 30 June 2022 is $254 million (2021: $241 million). State loans Transurban WGT Co entered into loan agreements with the State of Victoria for the purpose of funding amounts owed by each party under the West Gate Tunnel Project D&C Subcontract, and also for funding advance payments to the West Gate Tunnel Project D&C Subcontractor. Loans are made between the parties on a short-term basis and are non-interest bearing. The value of the State loans payable to the State as at 30 June 2022 is $209 million (2021: $82 million).
KEY ESTIMATE AND JUDGEMENT Concession and promissory notes
The Group has non-interest bearing long term debt, represented by promissory notes and concession notes payable to TfNSW, measured at the present value of expected future payments. The calculations to discount these notes to their present value are based on the estimated timing and profile of the repayments. Assumptions are made in determining the timing and profile, based on expected available equity cash flows of the Group's CGUs. A discount rate is used to value the promissory notes and concession notes to their present value, which is determined through reference to other facilities in the market with similar characteristics. A discount rate of 7.50% (2021: 7.50%) has been used for notes issued during the reporting period, which recognises the subordinated nature of these notes.
172 172
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