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WestConnex: good debt or bad debt?

14 May 2017
Description

Background Briefing asks whether Australia's largest transport infrastructure project will live up to its promise to reduce Sydney's congestion.

As WestConnex has morphed over the years, the cost has increased, partly due to inflation, and partly due to its greater scope. From a rough initial estimate of $10 billion, the cost rose quickly to $12 billion, then to $15 billion and now it's $17 billion, more expensive per kilometre than the Channel Tunnel. And it could rise further if tenders on stage three, the most expensive, come in higher than expected.

WestConnex was conceived in 2012 and the number one objective was to give better access to trucks travelling from the port of Botany and Sydney airport to the industrial areas in the west.

As the 2013 federal election approached, both sides of politics jumped on board, promising $1.5 billion in commonwealth funding. This was before the WestConnex business case had been prepared, and despite the fact that Infrastructure Australia had put the project in the lowest-priority category.

When he became Prime Minister, Tony Abbott ensured WestConnex got a $2 billion loan on very favourable terms, well below market interest rates.

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2017
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