“But in reality, the risk  was very high. The flow wasn’t  government money, it was traffic  – so there was a user-pays  risk combined with very high  debt level so the stress came on  the asset.”  Investment banks have  been criticised for high-cost  infrastructure projects in the  past. However, the asset class is  not so much risky as complex  and illiquid, says Nick Rowe.  Caveat emptor will now be  the mindset of infrastructure  wannabees. The collapse of the  $1.1 billion Lane Cove Tunnel  in late-January has stripped  the last shreds of the emperor’s  clothes off the asset class, and  Australia will have to learn  from experiences in the UK,  the Netherlands and South Africa  to re-cut the financial coat  to fit the available cloth.

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