Transurban consortium named best value proposer for US$24.8 billion Tennessee Choice Lanes project
The Drive TN Consortium (DriveTN) has been selected as best value proposer to deliver Tennessee’s I-24 Choice Lanes project in Nashville, marking a material North American growth win for Transurban Group. The consortium, comprising Ferrovial, Transurban and Tikehau Star Infra, will design, build, finance, operate and maintain the new Choice Lanes.
The project carries an estimated construction value of approximately US$9.2 billion and a total concession value of approximately US$24.8 billion. The selection remains subject to government approvals, meaning the outcome is not yet contractually locked. The win aligns with Transurban’s stated strategy of pursuing growth opportunities in North America.
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Inside the I-24 Choice Lanes project
The 26-mile project will add Choice Lanes in both directions along I-24 between Nashville and Murfreesboro, targeting one of the region’s most congested corridors.
According to Transurban, the project is anticipated to deliver a dual benefit. Choice Lane users are expected to gain more reliable travel speeds, while drivers in the free general-purpose lanes should see reduced congestion. The announcement also notes the project contemplates future extensions to I-24 to be developed over time, an element of optionality rather than committed scope.
Key project specifics include:
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Length: 26 miles, both directions
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Corridor: I-24, Nashville to Murfreesboro
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Consortium: Ferrovial, Transurban, Tikehau Star Infra
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Delivery model: design, build, finance, operate, maintain
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Future extensions contemplated over time
This delivery structure places the full lifecycle of the asset, from initial design through decades of operation, within a single concession framework held by the consortium.
The numbers behind the deal
The financial structure of the concession remains partly open. The gearing and capital structure remain subject to availability of concessional government funding, which will be finalised by financial close, expected mid-2027. As a result, no final gearing figure has been confirmed.
Transurban’s equity share is expected to be funded using existing balance sheet capacity over time, indicating staged rather than upfront funding. The company has not disclosed its specific equity share amount, whether as a percentage or a dollar figure.
Transurban’s equity contribution to the Tennessee project is expected to be drawn from existing balance sheet capacity over time, a posture consistent with the group’s broader capital management approach; its recent debt facility expansion to A$3.475 billion reinforced the financial headroom available to pursue exactly this kind of staged, long-dated commitment.
| Metric | Detail | Investor Note |
|---|---|---|
| Estimated construction value | ~US$9.2 billion | Scale of build phase |
| Total concession value | ~US$24.8 billion | Long-term revenue base |
| Financial close | Expected mid-2027 | Capital structure finalised by then |
| Funding source (Transurban equity) | Existing balance sheet capacity, over time | Staged funding, no new raise flagged |
| Selection status | Best value proposer, subject to government approvals | Not yet contractually locked |
These figures frame the scale of the opportunity, while the qualifiers around funding and approvals underline that key commercial terms are still to be settled.
What are Choice Lanes?
Choice Lanes run alongside free general-purpose lanes. The project is anticipated to provide more reliable travel speeds for Choice Lane users, while also reducing congestion for drivers in the free general-purpose lanes.
The delivery model, known as DBFOM (design, build, finance, operate, maintain), sees a private consortium responsible for the entire lifecycle of the road under a long-term concession. The consortium builds the asset, funds it, and then operates and maintains it for the concession period.
For investors, the significance lies in the cash flow profile. These concessions are structured to generate long-dated cash flows over decades.
Long-dated concession cash flows are the structural foundation of Transurban’s investment case, a dynamic visible in how lenders approach the group’s assets; the A$300 million Westlink M7 refinancing closed on a three-year syndicated facility specifically because bank appetite for toll road cash flow exposure remains robust.
Why this matters for Transurban investors
The project represents a disciplined, value-accretive growth opportunity in North America and extends Transurban’s US footprint into a new state, Tennessee. The long concession horizon underpins the potential for durable future earnings.
Investors should note, however, that the equity funding profile is similarly staged.
Michelle Jablko, CEO, Transurban
“The I-24 Choice Lanes Project represents an important opportunity to bring Transurban’s proven capabilities to Tennessee. The project is aligned with our strategy of pursuing disciplined, value-accretive growth opportunities in North America.”
“Our focus is always on the customer and creating journeys they can rely on. Together with our partners, we look forward to working with the state of Tennessee to deliver a project that transforms everyday connectivity and provides stress-free, reliable travel choice for decades to come.”
What happens next
The pathway from selection to operation involves several sequential steps:
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Secure government approvals, as the selection is subject to these
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Finalise concessional government funding, gearing and capital structure
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Reach financial close, expected mid-2027
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Commence the design and build phase
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Develop potential future I-24 extensions over time
With the consortium named best value proposer, the focus now shifts to securing approvals and finalising the funding structure. Should these milestones be achieved, the I-24 Choice Lanes project would position Transurban for a long-dated presence in a new US market, though the timeline and staged nature of both funding and revenue temper the near-term earnings impact.
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