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NSW government seeks private partner for second harbour tunnel

The agency said a development partner for the procurement and delivery phase of the motorway would not be involved in any financing of the project.

“Project costs will only be finalised when construction contracts have been awarded,” it said.

The proposed route of the Western Harbour Tunnel.

The proposed route of the Western Harbour Tunnel.

Transport for NSW also confirmed it was seeking expressions of interest for upgrades to the Warringah Freeway, one of the country’s busiest roads, to which the new tunnel will connect.

The NSW Opposition is demanding the government recalculate the cost-benefit analysis of the harbour tunnel before it embarks on the build, arguing the coronavirus crisis’ impact on population growth and traffic movement must be factored into the overall cost.

“We are asking whether the project’s benefits have been impacted by the current crisis and the change in travel patterns in Sydney, and calling for the benefit-cost ratio to be recalculated,” Labor roads spokesman John Graham said.

“The world has changed, people are working from home and migration has fallen. The government should spell out its plan to avoid the tight construction market conditions that they have blamed for previous transport project cost over-runs.”

Plans for the tunnel have sparked fierce backlash on both sides of the harbour, with locals voicing environmental, health and traffic concerns.

A petition of more than 11,000 signatures was presented to NSW Parliament on Thursday, with much of the opposition coming from Premier Gladys Berejiklian’s electorate of Willoughby.

The tunnels will be built in a trench on the harbour floor, and large pre-fabricated concrete tubes lowered into place from barges above.

The state’s port authority has warned that the amount of highly contaminated sludge dredged from the harbour for the tunnel could be “more significant” than predicted.

Macquarie Equities analyst Ian Myles said the government was likely pushing back a decision on how it would fund the massive motorway project.

“The government is effectively taking [the] funding risk at this point in time until they go and sell the concession or borrow against the Harbour Bridge,” he said.

“The revenue from the Harbour Bridge is a significant source of capital to fund the expansion of the Western Harbour Tunnel, and it’s a logical thing to do.”

Construction of the new tunnel has been separated from the connecting Beaches Link roadway, though the combined cost has been estimated at more than $14 billion.

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The Western Harbour Tunnel will extend from an underground junction for the WestConnex toll road at Rozelle to the Warringah Freeway at North Sydney, and eventually on to the Beaches Link, which will extend to Balgowlah and Seaforth in the north-east.

Transport Minister Andrew Constance said on Friday that the government was committed to the Beaches Link and was about to begin “very serious market engagement” on the project.

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