Downer pays out over $100m worth of dividends each year. Geoff...

Downer pays out over $100m worth of dividends each year. Geoff Knox has said they intend to pay it out again this year. If they had a cash flow problem they would not do that. As for Reliance Rail it is a ppp and the major shareholder is the NSW gov, and they are about to get voted out too.

This is not the first time a ppp has developed a cash problem. According to Knox, Downer is not at fault for the cost blowout and not liable for it. So its up to the NSW Gov and Downer to decide what to do about it. They wont make any decision until after the election and no need to either.

If there is an expectation that the private contractor should donate funds to a ppp whenever a cost blowout occurs it would create a dangerous precedent and give governments a blank cheque to spend spend spend at shareholders expense.

The only ones pushing for Downer to pay money into Reliance Rail are the Banks because they reckon its easier to get money out of shareholders than the government. They don't care where the money comes from. I hope Downer sticks to its guns on this.

I don't believe this will affect Downer's reputation or their bottom line at all. But it will make everyone think twice before entering ppp with any government. If Downer tender for a project and the project owner wants to pay more and get less from someone else then it is their loss.

Downer is good at what they do and the ones who matter know that. So whats the problem? Nothing! In the end the bottom line is all that matters. On those stats Downer must be the most undervalued company on the asx - and everyone knows it.

I'm not loaded up yet - still watching. The bottom is impossible to pinpoint. I will buy more this afternoon. I think the shorters are running out of bullets. (Now 0.14% shorted.) Its also bounced on a down day. A shadow is developing on the weekly chart and looking at previous bounces its due.