Writing from Sydney Australia, global contributor Archie Bayvel talks about a unique business and investment opportunity involving bridges.

Doing something nobody thought of before then running with it seems a good way to acquire wealth, recession or not. Anyone can do it. All you need is to find the “something.”

Chances are there is exactly such a something closer than you think; the commercial template for which has already been thoroughly proven by grossing somewhere between $30 million and $50 million a year!

Exact figures are hard to come by because the company that runs the original model is obsessively secret with its intimate details despite the “something” that earns its fortune being not only bigger than The Ritz but the biggest city landmark in the country that owns it.

The Sydney Harbour Bridge Climb

We’re talking here about Australia’s Sydney Harbour Bridge and the massively successful business, BridgeClimb, that has already had 2.5 million people clamber 470 feet above the water, scrambling among its miles of girders and 6 million rivets.

It is a private company that publishes no figures. But people began asking questions following a news item that its owner, Paul Cave, had lost $50 million in the recent collapse of Babcock & Brown, a mini-version of Australia’s internationally successful Macquarie Bank.

Some focused on a forgotten 2004 report that BridgeClimb grossed more than $62 million in its first three years… then there were these 2.5 million climbers. If one does the math, you too might want to seek a bridge near you.

First some arithmetic: $63 million in the first three years would be $231 million today were no allowance made for increased volume, rising charges, and add-on business. Current climb charges average $200 per person, but for our example, let’s say the average is $150 over the past 11 years. That’s $375 million from the 2.5 million visitors and still doesn’t include merchandise, museum admission and other products sold over the years.

If you’re in the USA and seek a bridge of your own, consider New York’s Hell Gate Bridge and Staten Island’s Bayonne Bridge. Both look almost identical to Sydney’s bridge. Hell Gate is 1,017 feet long compared to Sydney’s 3,770 feet while Bayonne with its 227ft-high arch was specifically designed to be 23 feet longer. British readers might look to opportunities from the 340ft-high cantilevers of Edinburgh’s huge Forth Bridge in the heart of one of the world’s great tourist destinations. There must be many more.

Australia’s Premier Tourist Attraction

That all these bridges have been in full view for decades without their earning potential being realized should be no deterrent. Sydney Harbor Bridge was taken for granted by millions of people every day for 56 years until Paul Cave thought it would be fun to climb it with a group of visiting colleagues. That was in 1989 and they enjoyed it so much he decided to make a business
of it.

It took him 10 years and $12 million (another figure flushed by Babcock & Brown under the cloak of privacy) in start-up loans to wade through the myriad objections. A commentator this week described the loan as having financed a “team of negotiators to deal with petty government ‘muppets’ who would find fault at every turn, pay for consultants, risk assessors, environ-impact freaks and liquid lunches to butter up public servants with few brain cells. At the end of the day, it turned out to be quite cheap and he did well, Sydney did well.”

In the light of $375 million-and-counting, “well” isn’t the word for it. BridgeClimb is arguably Australia’s premier tourist attraction. Better, the company’s contract with the state government of New South Wales has another nine years to run, although it is believed to contain no provision for extension or renewal.

Actual contract details are guarded as business in confidence. But in the light of Babcock & Brown, people began asking how much New South Wales gets out of BridgeClimb. After all, someone who can afford to lose $50 million should perhaps be asked for more. Specifically, someone trading under an unusual name like Ottto Holdings (Aust.) Pty Ltd and who is so private that even requests to explain that third “t” are politely declined. Mr. Cave, 64, is categorical, however, in his denials that he lost anything like $50 million while regretting he didn’t sell his $5 shares at $35 before B&B crashed in March, rendering its equities worthless.

The state’s license fee dream was $40 million over the 20-year contract. But bonus clauses are believed to raise the government’s share to 8% of the annual gross – hot on the $40 million’s heels already with the business growing and near half the term still to run. An end total of $80 million is not beyond possibility.

Finding A Bridge Near You

So finding a bridge near you could also be a good thing for the state or city that gives you the go-ahead. If you have one in mind, some questions to ask include:

• Is it big enough to have a “wow” factor? Sydney Harbor Bridge towers 470 feet above one of the world’s most breathtaking harbors with views over the Pacific Ocean to the east and the distant Blue Mountains to the west.

• Can the basic climb be easily enriched? At Sydney there are dawn climbs, day climbs, dusk climbs and night climbs. Thirteen hundred miles to the south in Auckland, New Zealand, a 200ft-high copycat version was struggling until a new owner added bungee jumping.

• Are you prepared for brain-surgeon-level nitpicking to get your proposal approved? To satisfy the so-called government muppets’ safety concerns, all Sydney climbers are breath-tested, issued with pocketless climb suits, stripped of all personal possessions and pocket contents, asked to sign a blood chit, then run past a metal detector before being allowed on the bridge.

Legend is the government was so anxious to avoid liability for falling climbers that it proposed transferring bridge ownership to Ottto for 20 years then leasing it back to run its trains and taxpayers’ cars over it. Too good to be true, alas, although selling the Harbour Bridge to gullible visitors has been the dream of Australian con men ever since the first GI arrived during WWII.

Would-be climb entrepreneurs don’t have to go for the giant-size experience. Some 600 miles north of Sydney, the city of Brisbane runs a very successful albeit more modest version on its own local Story Bridge. The climb, 279 feet above the Brisbane River, is operated by a private syndicate that includes the two founders of the Auckland climb. It has a 30-year, 24-hour-a-day lease to operate seven days a week.

Innovations include a special Climb for Kids that adds lectures on the chemistry of concrete and the physics of forces on the bridge to the obvious gee-whiz views. With climb prices up to $130 and more than 95,000 climbers since it opened in 2005, revenue must be around $11 million, excluding merchandising and takings from four restaurants in the bridge foundations.

It’s a long way short of Sydney’s millions but its early days and Sydney is far bigger and the South Pacific’s commercial and tourism capital. But it does seem that the bigger your bridge and the farther you see from it, the higher your profits.

Sydney is hilly like San Francisco and some parts seem to look down on the bridge as it nestles among the skyscrapers. So it’s not just the view from the top! It’s the accomplishment drug … the pheromones … the adrenaline rush of thinking: “I’ve got myself up here and it’s like the top of the world.”

For millions who will never even see Everest, this is a personal summit. By simply handing over 200 bucks to Ottto, whoever he is, they get to Euphoria, which sounds like his home state.

As was writ in the beginning: There’s a bridge near you...

Originally published October 30, 2009.

Other Related Topics: Archie Bayvel , Australia Investments , Infrastructure , Taipan Insider , Tourism Industry

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