Cheung Kong Infrastructure Holding Setting Acceptable Toll Charges


Cheung Kong Infrastructure Holding Limited (CKI) is a global infrastructure company that aims to make the world a better place by investing in transportation infrastructure and other global developments. CKI also diversifies its investments to other infrastructures such as household, energy, waste-to-energy as well as infrastructure-related business. The company’s operations are available in Australia, Continental Europe, Mainland China, Hong Kong, the United States, New Zealand, the United Kingdom, and Canada. In all the countries where CKI is available, it is the player in infrastructure development.

The business model used by CKI in all its operations is collaborating with other companies to form a consortium that will be used to submit requests for published tenders. For instance, CKI works with other companies such as Bilfinger Berger, Deutsche Bank AG, and Baulderstone Hornibrook Pty. Limited to form a Cross City Motorway (CCM) to form a consortium that won the tender of constructing Sidney Crossing Tunnel in 2002. The collaborating model is usually beneficial to CKI because it usually accepts sharing in case of loss.

After winning the CCT tender, CKI opened the project to the traffic earlier than the expected time in the terms. This is a clear indication that the company delivers its work as required. In addition, the CCT project was meant to reduce congestion in the Sidney Central Business District (CBD). The project was also delivered to New South Wales (NSW) government at a cheaper cost than the government had estimated of AU$1 billion. To add value to the project, the motorist who used the tunnel incurred toll charges to maintain the tunnel and compensate CKI and its partners. The toll charges led to the principal issue concerning the CCT discussed in the next section.

Principal Issue

The main issue with the CCT project is that it failed to reduce congestion in the CBD. It was regarded as a ghost tunnel because motorists avoided it and preferred using public roads. The reason why the project was avoided by vehicles was that the toll charges were too high. The project also led to another issue, increasing congestion due to reductions of Lanes at William Street. In addition, the CCT project caused disruptions in the CBD since some traffic lights were changed. Another issue developed by the tunnel is misleading since their signage said it was the only way to a particular destination, whereas there were public roads to those destinations. The recommendation in the next section will help resolve the main issue caused by the CCT.


To resolve the issue that led to the failure of the CCT project: first, the CKI should have set the toll charges depending on the national average earning for households of Australians. Secondly, introduce toll-free periods to make the motorist realize the importance of the tunnel. Thirdly, ensure that the toll fee stays constant for a longer duration until the public entirely accepts the project. Finally, offering weavers to sure motorists, especially those offering public transport to households working within the CBD. In all of these choices, CKI should select the alternative that ensures the project reaches 90,000 usages per day.

My best alternative is CKI should set tolls according to the Australian national average for households. CCT is a project expected to be used by the households within the CBD and its environs; therefore, setting charges using national average earnings will ensure the prices are fair to everybody. In addition, this will make sure that motorists use the tunnel because its prices will be lower. It will also make sure that public transport is utilized since there will be no increase in commuters charges.

To ensure that the setting of accordance with the national average earning, CKI should start by getting the data from the Australian Federal government. Secondly, reduce prices for a motorist who will exit the tunnel along the way. Finally, after opening the project, the company should collect daily data to know if the projected number of users per day has been reached. These three steps will ensure that CKI receives the full picture of the project implementation and achievement of the set goal.