Key Highlights

  • The present value of all payments to the Tennessee Department of Transportation is US$21 billion, with revenue sharing not included.
  • The earlier US$24.8 billion figure combined present-value and nominal components; construction-period payments for 2027 to 2033 total US$7.7 billion in nominal terms.
  • Gearing and capital structure will be finalised at financial close, and every figure remains subject to financial close.

Transurban Group (ASX:TCL) released details on 28 October 2026 of the payment schedule and revenue-sharing terms for the I-24 Southeast Choice Lanes project in Nashville, Tennessee. The release responded to an announcement the previous day by the Tennessee Department of Transportation (TDOT) on commercial close with the DriveTN Consortium. Transurban said the present value of all payments to TDOT is US$21 billion, the same value as in the DriveTN offer, and that revenue sharing is not included in that figure.

Reconciling the headline numbers

The company explained that the US$24.8 billion figure published at award combined present-value and nominal components, as the request for proposals required. On a consistent present-value basis, Transurban said, that figure equals US$21 billion. Present values are measured as of 12 July 2027, the official deadline to financial close, at a blended discount rate of 5.2 per cent.

Under the Concession Agreement signed on 30 September 2026, US$0.5 billion of operating-period payments sit outside the investment-grade rating and are discounted at 8 per cent. All other payments are investment-grade rated and discounted at between 5 and 5.5 per cent depending on payment priority. Transurban noted that all amounts are in US dollars, are subject to amounts available at financial close, and that the financial structure requires an investment-grade rating.

The payment schedule

Payments to TDOT are heavily weighted to the construction period. The present values listed are US$1.50 billion for 2027, US$0.99 billion for 2028, US$0.94 billion for 2029, US$0.90 billion for 2030, US$0.85 billion for 2031, US$0.81 billion for 2032 and US$0.77 billion for 2033. No payments are shown for 2034 and 2035. Operating-period payments follow: US$0.47 billion for 2036 to 2040, US$0.59 billion for 2041 to 2045, US$1.53 billion for 2046 to 2055, US$2.34 billion for 2056 to 2065, US$3.72 billion for 2066 to 2075 and US$5.63 billion for 2076 to 2085.

Transurban said construction-period payments for 2027 to 2033 total US$7.7 billion in nominal terms, equating to roughly US$1.1 billion a year at peak.

Sharing upside with the state

The release also clarified two revenue-sharing mechanisms that apply only if the road outperforms. The first is an excess revenue share, which begins when accumulated revenues exceed the base case. TDOT's share rises in bands of 200 basis points of additional internal rate of return above the base case: 12.5 per cent for the first band, 25 per cent for the next, 50 per cent for the third, and 75 per cent beyond 600 basis points.

The second relates to tolls. Revenue from any per-mile toll above US$3.20 (in 2025 dollars) is shared with TDOT. The state's share is nil up to US$3.20, 50 per cent between US$3.20 and US$4.80, 75 per cent between US$4.80 and US$6.40, and 90 per cent above US$6.40.

Funding and what remains open

Transurban said gearing and capital structure will be finalised at financial close, and that its equity share is expected to be funded from existing balance sheet capacity over time. The release noted a maximum debt-to-equity leverage of 75 to 25 under the Transportation Infrastructure Finance and Innovation Act (TIFIA) term sheet, which was a procurement requirement.

The announcement does not give Transurban's equity amount, expected returns, traffic assumptions or construction timetable beyond the dates above, and every figure remains subject to financial close.

Why the detail matters

The disclosure sets out, in one place, how much the concession is expected to cost in present-value terms, when cash leaves the consortium and how the state shares in any outperformance. Because the schedule is front-loaded through 2033 and then rises steeply in later decades, the structure ties a large share of payments to the operating life of the lanes. Whether those terms are met will depend on the rating outcome and on financial close by the stated July 2027 deadline.