The Federal budget cuts are taking centre stage this week with public spending and services being tightened. This wasn't bad news for S&P ASX All Ordinaries Index (ASX: ^XAO) which was up 0.86% on Tuesday.
If the plan to spend $50 billion on roads, rail and other infrastructure over the next six years goes ahead, this will give the economy a financial boost. The possibility of state asset sales of existing infrastructure, could help offset declining resource investments.
Here are three companies that could be part of and potentially profit from this plan.
1- Lend Lease Group (ASX: LLC)
The property and infrastructure developer has a wealth of experience in road projects. It is currently completing a 23km upgrade to the Pacific Highway.
In March it was named as the preferred tenderer for designing and building the $3 billion NorthConnex freight tunnel in NSW.
2- Leighton Holdings Limited (ASX: LEI)
Although the engineering and construction company is seeing less mining related work, it is heavily involved in road and infrastructure development. Some of the most recent work contracts it has won are for motorways and tunnels in places like Hong Kong and the Philippines.
Its annual report stated the backlog of needed infrastructure development should offer the company a range of opportunities in the next few years.
3- Transurban Group (ASX: TCL)
This year has already been fruitful for the toll road developer, operator and manager with its successful bid for Queensland Motorways Ltd. Its consortium will now have control of five of Brisbane's six toll roads and tunnels. That adds to its portfolio of major assets in Sydney and Melbourne.
The company could benefit from both construction contracts and acquiring state assets as they come up for sale.
The federal government sees these infrastructure projects as ways to get money flowing through the economy and expand business. Investors may see benefits from the spending plan if they have these stocks in their portfolio.
