Transportation infrastructure, such as ports, rail networks, toll roads, tunnels, bridges, airports and ferries is essential to support the transportation of bulk cargo and containers via land, air or sea.
Transportation infrastructure generally requires a high level of initial cost outlay, with low on-going variable costs, creating a significant barrier to entry. This asset class may also be regulated, which can limit the development of competing infrastructure.
Transportation infrastructure can often be categorized as economic infrastructure, meaning revenue is driven by economic growth and contains an element of patronage risk. On some transportation infrastructure projects, demand risk can be mitigated by government support or an availability payment structure.
Key attributes:
- Diversified revenues backed by strong competitive positions
- Upside from increased economic activity
- Significant opportunities to invest in system expansions at attractive returns