City Hub

WestConnex privatisation likely

The NSW Govt is considering selling its remaining stake in the WestConnex toll road construction. Photo: Alec Smart

by ALEC SMART

The NSW Govt is planning a scoping study to consider divesting its remaining 49 per cent stake in WestConnex toll roads and sell it to the private sector. NSW Treasury will seek to appoint advisers to conduct the scoping study with a report expected to be handed to the Government in the second half of 2020.

NSW Treasurer Dominic Perrottet said the intention of the privatisation study was to examine whether the government should use the capital to invest in new infrastructure projects. “No decision has been made – we will await the outcome of the scoping study and will always do what is in the best interest of the people of NSW,” he added.

Asset recycling
Perrottet described it as an “asset recycling strategy” and claimed the money from the previous sale of Sydney Motorway Corporation, used to fund the M4-M5 link (final stage of WestConnex) had also enabled investment in infrastructure such as “schools, hospitals, roads and rail NSW needs as part of our record $97.3 billion infrastructure pipeline.”

Abigail Boyd, Greens NSW Transport Spokesperson, told City Hub: “How can the Coalition be considering the sale of our remaining stake in WestConnex after it practically gifted 51% of it to Transurban? On the one hand, the Treasurer is arguing that private investment is needed to build these types of infrastructure projects, while on the other hand he is happy to sell off our public infrastructure at a fraction of what it cost the public to build it.”

In Sept 2018 the NSW Govt sold 51 per cent of its stake in the Sydney Motorway Corporation (which is building WestConnex), to Sydney Transport Partners, a consortium led by Transurban Finance Company, for $9.26 billion.

Transurban is one of the world’s largest toll road builder-operators with toll road networks in Australia, USA and Canada. The consortium also included Canada Pension Plan Investment Board, Tawreed Investments (a subsidiary of Abu Dhabi Investment Authority) and AustralianSuper.

A statement the NSW Govt sent to City Hub said: “Concessions for the right to operate all stages of WestConnex will revert to the Government in 2060. Any sale of the State’s 49 per cent stake will not impact this outcome. The construction, operation and tolling of WestConnex will continue unchanged.”

Whichever consortium takes over the WestConnex operation will be able to reclaim their investment via vehicle tolls until 2060.

However, Pauline Lockie, an independent councillor on Inner West Council who has campaigned against WestConnex, revealed: “It means the toll revenue for at least the next 40 years will funnel entirely into private coffers – the government will get a one-off cash injection with the sale, but the ongoing revenue (which would have to be greater for any private company to want to get on board), which could have been spent for public good, will be lost.”

Ms Boyd added: “This is just another example in a long list of privatisations where public money has been used to prop up the profits of private corporations.

“A huge amount of public money has been spent building WestConnex and now the hundreds of billions in tolls the public will be forced to pay will go straight into the pockets of companies like Transurban. The NSW Government needs to stop gifting public money to private companies.”

Questions, questions..
City Hub asked the NSW Govt: Because WestConnex will be a revenue-earning facility once it’s in operation and collecting tolls from users, why not retain that stake to claim a share of the toll income? Surely the NSW Govt is not so cash-strapped that it will have to divest this asset in order to invest in other infrastructure schemes?

However, they declined to answer our query.

Ms Lockie added: ”If construction’s still going, the contractors will only be beholden to the owners – not the government – so we’ll be in even less of a position to get them to stop making a mess of the community and people’s lives. And any transparency and public accountability over the project will go from near-zero to zero.”

City Hub also asked the NSW Govt: Once the concessions to operate the different stages of the WestConnex project are removed from Govt supervision – from tunnel digging to spreading bitumen to landscaping to maintenance to ultimately collecting users’ tolls – doesn’t this weaken accountability?

There are already issues with reported violations of night curfews by large construction trucks around St Peters..

[In recent weeks residents around the St Peters’ WestConnex construction sites have reported on violations of the night curfew with heavy trucks thundering through private neighbourhoods at all hours.

Residents affected claimed that once these noise concerns were publicly raised, instead of WestConnex contractors reinforcing the curfew, they merely removed the signs warning construction truck drivers a night time curfew was in operation.]

Recently a female cyclist was run over in a hit-and-run incident by a construction lorry in the vicinity of a WestConnex site in Marrickville that police are still pursuing. How will the government prevent breaches in health & safety if in future contractors are only accountable to themselves?

[In Dec 2019 a female cyclist was run over at the Edgecliff Road/Alice Street interface in Marrickville in a hit-and-run incident by a construction vehicle towing a trailer, which was highly likely to have been coming from a WestConnex site nearby.]

However, although we received a generic statement from NSW Treasurer Dominic Perrottet, they again declined to answer our questions.

“We’re making sure NSW taxpayers get the best value for money from our assets.”

 

City Hub’s previous coverage of WestConnex: https://cityhubsydney.com.au/?s=westconnex

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