Technical report

New South Wales Auditor-General’s report performance audit: NorthConnex

Department of Premier and Cabinet, NSW Treasury, Infrastructure NSW, Roads and Maritime Services, Transport for NSW
Infrastructure Roads Transport Public-private partnerships Sydney
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apo-nid94331.pdf 2.15 MB

NorthConnex is a nine -kilometre tolled motorway tunnel between the M1 Pacific motorway at Wahroonga and the M2 Hills motorway at West Pennant Hills. Major construction work commenced in February 2015 and the tunnel is expected to open to traffic in late 2019.

In March 2012, the M7 shareholders (also referred to as the proponents) submitted an unsolicited proposal for NorthConnex to the NSW Government. The proponents, led by Transurban, include the Queensland Investment Corporation and the Canada Pension Plan Investment Board. A steering committee, with representatives from the Department of Premier and Cabinet, NSW Treasury, Infrastructure NSW, Transport for NSW and Roads and Maritime Services, as well as an independent member, assessed the proposal in accordance with the ‘Unsolicited Proposals - Guide for Submission and Assessment ’ (the Unsolicited Proposals Guide).

The Unsolicited Proposals Guide sets out a three- stage assessment process:

  • Initial Submission and Strategic Assessment — A comprehensive initial assessment to identify any potential benefit to the NSW Government of further consideration and development with the proponent
  • Detailed proposal — The NSW Government and proponent work collaboratively to develop and assess a detailed proposal
  • Negotiation of final binding offer — Outstanding issues are finalised with a view to entering a binding agreement should the NSW Government accept the final offer.

As this was a Public Private Partnership (PPP) proposal, the steering committee also assessed the proposal against the National and NSW PPP Guidelines. This audit assessed whether the process used to determine the NorthConnex funding model adequately considered value for money for taxpayers and road users. In making this assessment, we answered the following questions: How did the assessment of the NorthConnex funding model ensure value for money for NSW taxpayers? Did the assessment adequately consider the overall impact of tolling arrangements to road users and the community?

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