how realistic was the prospectus forecast?, page-4

The 3 main problems I see with Eastlink at the moment are:

1. Short trips by cars that were predicted are not happening. ie: people are still using Stud Rd and Springvale Rd for short trips rather than getting on to Eastlink as they see the time savings as negligble.

2. The bottleneck at the Hoddle St (City) end is getting worse. This is deterring many people from the Eastern/South Eastern Suburbs from taking this route to the city and airport and hence they are not using the tunnels.

3.ConnectEast's marketing of the tunnels has been pathetic. I have seen no real marketing efforts implemented to boost traffic on this key section for six months. This section is where the revenue can be quickly grown with a few innovative campaigns such as "use the tunnel daily for a week and go into the draw for a 40" LCD TV. Winners announced Monday morning and names posted on the electronic freeway sign". Something like this run over a few weeks/months would give people an extra incentive or justification for using the tunnel and get them enjoying the time savings. They should also look at some sort of frequent driver program that lets drivers earn points for every kilometre they drive on Eastlink. At the moment however the management of Connecteast are a bunch of engineers rather than smart marketers that can better sell the road to the public.

I travel Eastlink twice a day everyday and certainly see the traffic growing slowly. I am certain that the bus lanes on Springvale/Stud Roads and the construction of the new rail crossing on Springvale Rd will boost the numbers a little but the key will be the connection to the Western Ring Road. When this happens the traffic numbers will boom as suddenly all the residents in the Eastern/South Eastern suburbs will see it as a true link and not just a road to a giant bottleneck.

As an investor from day one I still hold out hope that the share price will move back up to reasonable levels but time looks like it is going to be our best friend. So much more needs to happen for Eastlink to reach its numbers but many of these things are underway and hence there is some light at the end of the Eastlink tunnel.