NSW’s mega transport project boom hits the skids

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NSW’s mega transport project boom hits the skids

By Matt O'Sullivan

It is a pivotal moment for a Coalition state government which has staked its reputation as a builder that can deliver major transport projects.

After years sledging Labor for failing to deliver on promises when it was in power, the government will use a key report by the state’s infrastructure adviser to justify decisions to kick plans for several major road transport projects into the never-never.

There is no surprise that the Northern Beaches Link motorway is among those to be put on ice, despite then premier Gladys Berejiklian insisting five years ago that she was “absolutely committed” to the toll road from North Sydney to Balgowlah.

Premier Dominic Perrottet and Transport Minister David Elliott tour a new metro rail tunnel under Central Station in February.

Premier Dominic Perrottet and Transport Minister David Elliott tour a new metro rail tunnel under Central Station in February.Credit:James Gourley

Shelving the Beaches Link will appease residents opposed to the project and help nullify attacks from Labor, which went to the last election promising to cancel plans for the motorway.

The next state election hinges on western Sydney. If the government demands greater housing density there, it needs decent public transport and other infrastructure in areas deprived of anything matching that in the city’s east.

That is why, despite Infrastructure NSW recommending it be delayed, the government will take to the next state election a promise to build the $3 billion second stage of the Parramatta light rail line from Camellia to Olympic Park. The marginal state electorate of Parramatta, which the line will dissect, is among those set to determine the outcome of the poll next March.

Whether it will be built is, of course, another question. When the proposed route of the second stage was unveiled in 2017, the-then transport minister Andrew Constance said he was hopeful construction would start before 2020. The final business case for the project was handed to Infrastructure NSW three years ago.

An artist’s impression of the multibillion-dollar Beaches Link motorway, which is set to be put on ice amid soaring construction costs.

An artist’s impression of the multibillion-dollar Beaches Link motorway, which is set to be put on ice amid soaring construction costs.

In fairness, there is no question that the government has delivered on many promises to build major transport projects. The Northwest Metro rail line opened in 2019, while the final stage of the WestConnex motorway will be completed next year. By 2024, driverless trains will carry passengers on a new metro rail line under Sydney Harbour and the central city.

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But a pause on mega projects which it is yet to sign contracts for makes sense rather than risk enormous cost blowouts after the state election.

The cost of building infrastructure is skyrocketing. The City and Southwest Metro rail line from Chatswood to Bankstown via the CBD is at serious risk of blowing out by more than $4 billion to $17 billion. Internal government estimates have shown the country’s biggest rail project – Sydney Metro West from Parramatta to the CBD – is likely to cost up to $27 billion.

Grattan Institute transport and cities program director Marion Terrill has repeatedly said that it is prudent for governments to step back from the “megaproject binge” of recent years.

And it is not only the capital cost. An expanding transport network costs the public purse more to operate every year.

The NSW government simply does not have a bottomless pit of money to pay for these projects. An infrastructure building boom in NSW has inadvertently pushed up the cost of mega projects as governments compete for a small pool of large contractors. And as the price of building projects surges, the benefits of them relative to their cost diminishes.

There is also a valid claim to be made that more bang for taxpayers’ bucks can come from enhancing the existing transport network than shiny new rail lines.

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Several years ago, then Sydney Trains chief Howard Collins made an astute observation that a digital upgrade of the signalling system at a cost of about $3 billion would be the “biggest improvement we can make to the capacity of this city in a very short space of time”.

Infrastructure, Cities and Active Transport Minister Rob Stokes has also made clear that he favours a wider focus on things such as cycleways and better public spaces than just mega projects, station upgrades or road pinch-point improvements.

The big question now is whether voters will accept the government delaying indefinitely a number of its promised projects.

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