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Cross-City Tunnel

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About this Item
Subjects -  Tunnels; Traffic; Roads; Government Contracts; Electronic Tolls
Speakers - Harwin The Hon Don; Ryan The Hon John; Pearce The Hon Greg; Deputy-President (The Hon Patricia Forsythe); Rhiannon Ms Lee; Hale Ms Sylvia; Breen The Hon Peter; Pavey The Hon Melinda
Business - 
Commentary - Cross City Tunnel; , Bob Carr;, Carl Scully;, Morris Iemma;, Joe Tripodi;


    CROSS-CITY TUNNEL
Page: 18272


    Adjournment (Standing Order 201)

    Debate resumed from an earlier hour.

    The Hon. DON HARWIN [5.33 p.m.]: I am pleased to participate in this debate. I applaud my colleague the Hon. Melinda Pavey for raising this issue as a matter of urgency in her capacity as the Roads spokesperson in this Chamber. She is doing a very good job in that role. Today we have been shocked by revelations that the Government asked the cross-city tunnel contractors to pay $105 million for cost recovery.

    The Hon. Catherine Cusack: It is a fee for service for screwing up the traffic.

    The Hon. DON HARWIN: I read that the payment was allegedly cost recovery over a 30-year period, but even over that period I wonder how on earth there could be $105 million in costs to be recovered. In my capacity as the Liberal Party's representative of central Sydney in the Legislative Council, I have received numerous representations related to this issue not only from members of the Liberal Party but also from members of communities in the eastern suburbs. This is an extraordinary project and it is a cause of immense concern to the community.

    One of the outcomes of this project is that it has taken away from eastern suburbs residents the option of a public road between the eastern suburbs and the North Shore. It denies them the opportunity of driving on a public road in a relatively straightforward direction from the eastern suburbs to the Cahill Expressway and the Sydney Harbour Tunnel. Effectively they have lost their right to drive in a direct route on a public road from the eastern suburbs and link up with the Sydney Harbour Bridge. We now have the ridiculous situation of people either taking circuitous routes through the back streets of Woolloomooloo or becoming tied up in a conga line of traffic along William Street and Macquarie Street.

    The Hon. Greg Pearce: A Lathamesque conga line.

    The Hon. DON HARWIN: A Lathamesque conga line indeed. This Government and the Roads and Traffic Authority are responsible for the conceptual failure of this project, which is a disgrace. Another revelation that justifies the adjournment of this debate and the attention of this House is that the contract provides for further strangulation of the capacity of eastern suburbs roads. That is just incredible. In the event of projected levels of traffic through the cross-city tunnel not being reached in line with the highly unrealistic figures in the contract, incredibly there may be a further reduction in the traffic capacity of Macquarie Street and Hunter Street. Can honourable members believe that?

    Even before the project, it was difficult enough to drive along Hunter Street, but as a result of the cross-city tunnel project, Macquarie Street has become almost a car park. St Marys Road will be adversely affected. I am sure that many people of the Catholic faith would be horrified at the prospect that, as part of the contract, the capacity of St Marys Road to take traffic will be reduced. The project will impact upon other significant public facilities, such as the New South Wales Art Gallery, the Sydney Hospital, the State Library and Parliament House. All of those ramifications are part of the contract that the Minister for Utilities and this Government negotiated.

    However, it gets worse from the point of view of people who live in the inner eastern suburbs. The contract allows for a further reduction of roads capacity in eastern Sydney, including Darlinghurst, Woolloomooloo, Rushcutters Bay, Woollahra, Double Bay and Bellevue Hill. It is not as though they are currently easy suburbs to drive through, yet there will be further road closures in those suburbs as a result of this project. The inner western areas of Sydney will be adversely affected, including Pyrmont, Ultimo and Glebe. Central Sydney will become a car park as a result of this contract, which is extraordinary. Having made those brief comments, I reiterate my support for the motion moved by my colleague the Hon. Melinda Pavey. The Government stands condemned for its handling of this project.

    The Hon. JOHN RYAN [5.40 p.m.]: I cannot believe the hypocrisy of the Special Minister of State. In debate he shed the most phenomenal crocodile tears about the problems that the Government associates with the cross-city tunnel project. When the cross-city tunnel was announced most Sydneysiders thought it would improve traffic flow and increase traffic infrastructure in the city. Instead, we have discovered that it is a backdoor method of reducing traffic flow in the city. Honourable members would remember that when the cross-city tunnel was due to open arrangements were in hand to ensure that the new Premier of New South Wales would have the opportunity, as one of his first tasks as Premier, to open the tunnel. What a fiasco that proved to be, because the tunnel opened a month later than its scheduled opening.

    Today we have discovered the $106 million payment to the Government, allegedly to cover infrastructure costs associated with the construction of the cross-city tunnel. Construction of the tunnel cost $600 million, so how on earth could associated tunnel works possibly cost $106 million? Allegedly that payment was required for work that the Government had to carry out to make the construction possible. It is an absolute nonsense. Apparently taxpayers are paying the Department of Planning and the Roads and Traffic Authority to do their normal work. Allegedly the $106 million has something to do with cost recovery, but how could cost recovery amount to 20 per cent of the construction costs of the tunnel project?

    The Government is trying to dive into the contract to get some of the profits that the proponents and owners of the tunnel will make. And who will pay for that? Sydney motorists. Earlier the Minister suggested that somehow this extra amount does not represent a cost to the taxpayers. I inform the Minister that many of the people who are using the tunnel, and paying $20 week or almost $1,000 a year to do so, are taxpayers—they are one and the same. The Government has added $1,000 a year to many family budgets, but their road infrastructure has been reduced, not increased. When the tunnel opened the right-hand turn into Palmer Street off William Street was closed.

    That very night Mr Willoughby of the Roads and Traffic Authority confessed on television, for all to see, that that road closure was about guaranteeing commitments given under the contract to ensure a certain level of traffic flow into the tunnel. He admitted that on television, up front. We then discovered that Oxford Street and William Street are to be narrowed and that other associated works had been designed to funnel traffic into this overpriced tunnel, adding an extra $1,000 a year to people's travelling budgets. What an outstanding achievement on the part of the Government! It has built infrastructure, which the Minister lauded as wonderful engineering, which reduces the traffic flow amenity in the inner city.

    The Minister for Roads, Mr Tripodi, was seen at his best when interviewed by Alan Jones early on the morning of those revelations. Mr Tripodi thumped the table, saying, "This is a commercial decision for the proponents. They are free to charge whatever toll they wish." He supported everything the proponents had done to date. As the anger grew, and as there were more interviews, Mr Tripodi banged the table saying that he wanted to meet with the proponents to urge them to cut the toll. What nonsense—he knows that they will not cut the toll. The Minister knows that he can flail his hands in mock anger until the sun sets, but nothing will happen—the tunnel will continue to cost $4 per trip and will continue to be underutilised. However, the Government persists with the outrageous narrowing of William Street, the outrageous refusal to not allow a right-hand turn into Palmer Street and the outrageous decision to narrow the traffic capacity of Oxford Street.

    Those decisions will stuff up inner-city traffic, particularly, as the Hon. Don Harwin said, along Macquarie Street and Hunter Street. What an outstanding achievement! When one hears the Hon. Joe Tripodi, the Minister for Roads, and the Hon. John Della Bosca, the Assistant Treasurer, it sounds as though they are talking about some other government when they say, "Too many compromises were made." I ask: Who made them? The then Carr Government, the current Labor Government, which is now pretending it had nothing to do with that arrangement and saying that it cannot do anything. The Government will wear this decision like a millstone around its political neck. The Government made this mess and it is up to it to find means to solve the problems because the motorists of Sydney will not forgive them for the outrage that is the cross-city tunnel.

    It is no good for Mr Tripodi to tell us that he will get angry and ask the tunnel proponents to cut the toll, because he knows full well that will not happen. Maybe over time the tunnel will become further utilised. However, it is outrageous that an extra 50¢ was added to the toll because of the consumer price index adjustment on the day that the tunnel opened. On the same day there was a 50¢ increase in the cost of the Eastern Distributor toll. It is no surprise that the many motorists who would have used both tunnels, had the tolls not been increased, have chosen not to do so. The tunnel project has been completely mucked up by the Government, from beginning to end, and now it wants to blame someone else.

    I never cease to be shocked at the capacity of the Labor Government to try to shift the blame for its stuff-ups—it blames the Federal Government, the weather or some other situation. It now wants to blame the proponents for this stuff-up, but the Carr Government signed the contract. The Government alleges that the tunnel project was open to public consultation. Perhaps it was open to public consultation—perhaps at midnight on a public holiday! Quite obviously, when the documents were put out for consultation neither the Government nor the people of Sydney fully comprehended what would happen. Few people understood that the opening of the tunnel would result in a reduction of traffic flow in the inner city. That is what happened.

    The Government ought to be honest about this, because the consultation was not open. The Government did not explain that as a result of the tunnel opening it would deliberately reconfigure the streets of the eastern suburbs and the inner city to ensure that a certain amount of traffic flowed into the tunnel. If people do not use the tunnel, they face long delays in other streets. The Government never explained that. There may have been pretty pictures in brochures that hung around various places for people to look at, but those bold facts were never explained to the people of New South Wales, particularly the people of the inner city, when the tollway was first mooted. No-one had any idea that the tunnel would have this impact, and the Minister ought to be honest enough to say so. He ought to come up with a facility that ensures that, at the very least, something will be done about the right-hand turn into Palmer Street.

    Traffic congestion in other parts of Woolloomooloo is unbelievable, with people doing rat runs while trying to find alternative routes to the Cahill Expressway. It is obviously in the best interests of the public that the right-hand turn into Palmer Street be reopened. The decision to close it was outrageous in the first place, and should not have been part of the contract. It must be one of those many compromises that Mr Tripodi was talking about yesterday. It is time for the Government to not just flail its hands in mock indignation, it is time for the Government to come up with a plan because Sydney is too important a city and its traffic flow far too important to allow it to become the subject of this stuff-up that the Government has created in the cross-city tunnel.

    The Minister gave an incredible explanation about why the Government received $106 million. Perhaps he could give back some of that money in return for changing some of the contract items. No doubt the money has not yet been fully received and therefore has not yet been spent; that might be an option for the Government to consider. Why not give some of the money back to the tunnel proponents in order to change some of the more outrageous aspects of the scheme? For instance, it could delete the requirement for transitways in William Street, where they will not be needed. Today in the media I saw an announcement that many transitways are ineffective because they are difficult to police. They just muck up the traffic—I think Mr Harold Scruby of the Pedestrian Council of Australia said that. Regardless of whether that is true, there is clearly a problem. The Government is doing nothing but wringing its hands. This is a problem of the Government's making, and the Government ought to fix it.

    The Hon. GREG PEARCE [5.50 p.m.]: The cross-city tunnel is an outrageous example of this Government going way too far in its merciless grab for money wherever it can get it. The concept that a project could be delivered by the private sector at no cost to government is a legitimate and sensible proposition in relation to infrastructure projects, but in this case the Government has taken that concept and perverted it into a grab for a hidden fee, a slug on the toll paying public, which will last for the term of the lease of the project. Today quite a bit of concern was expressed about the $105 million fee for this project. The contract summaries that were released by the Government in accordance with its obligations describe the payment as a development fee. They describe the payment as "a fee for the right to undertake the project", which is completely contrary to the concept of a no cost to government proposition.

    To hear the Minister today attempting to justify the payment by listing various payments that he claims were the costs of this project simply begs the question: Is he telling the truth? I support the comments made by a number of other honourable members who spoke today and who called for the release of documents that will show conclusively whether this was a development fee, a fee for the right to do the project, a profit grab by the State, or a legitimate reimbursement of costs associated purely with delivering this project. I am sure that will enable us to tell whether the Minister lied to the House today or whether what the Government is claiming is true, in which case we will all be astonished to understand how $105 million of costs could have arisen.

    This is not just a problem for the Government in relation to this project; another couple of projects are currently under way. In each of those projects the Government has also made a grab for an extra slug on the toll paying public. When one goes to the contract summaries for the Lane Cove tunnel project one discovers a slug, a development fee, a fee for being given the Lane Cove tunnel project of $79.3 million, plus GST. The Minister should get his advisers to start working on an explanation for that one. On the M7 west link the fee is $193.48 million, plus GST. The reason I emphasised the words "plus GST" is that GST is paid on a fee, it is paid on a development fee and it is paid on a transaction. It is not paid on reimbursement of expenses.

    So the Government, by its own documentation, is admitting that this was a fee, a grab, an extra tax and a hidden slug on the toll paying community. Honourable members should bear in mind that in large part the M7 is funded by the Federal Government. So that is a major concern. There are a number of other major concerns in relation to this project. Again, referring to the contract summary, it states that the Roads and Traffic Authority [RTA] provided projections for the usage of the cross-city tunnel. Minister Tripodi might blame the company or suggest that it got it wrong but he might want to explore how his RTA gave those projections to that company.

    The Minister blithely stated he did not think there were any problems for the Government in relation to this project but he might want to explore what sorts of liabilities there are under the contract, whether there have been misrepresentations in relation to these figures, whether they have been wrong and whether the RTA has not done its job properly. We heard also about air filtration for this tunnel. That issue was raised mainly in the context of the number of potential users. I think it might be worth having a look at the standard of air filtration in this tunnel. My good friend the Hon. Charlie Lynn, who is not in the Chamber at the moment, would know that many members in this place have to use the M5. For a long time we have been concerned about air filtration in the M5 tunnel. It might be quite instructive to compare air filtration in the M5 tunnel with the facilities in the cross-city tunnel. I again ask Mr Scully how he can justify not improving air filtration in the M5 tunnel.

    The Hon. Rick Colless: He simply cannot add up. He cannot do the calculations. He is Minister for Police, is he not?

    The Hon. GREG PEARCE: He has certainly run away as fast as possible from this responsibility. The only unfortunate thing is that he is not the Premier. Instead we have Premier Morris Mirror—"I will look into that."

    The Hon. Amanda Fazio: Point of order: The Hon. Greg Pearce well knows that he should refer to members either in this Chamber or in the other place by their proper titles. He should not attempt to make silly little jokes about their names. I ask you to ask the Hon. Greg Pearce to follow the standing orders. If he wants to refer to the Premier he should refer to him by his proper name.

    Madam DEPUTY-PRESIDENT (The Hon. Patricia Forsythe): Order! A convention of this House, which is supported by numerous rulings of Presidents, is that a member must refer to members of this House and the other place by their correct titles.

    The Hon. GREG PEARCE: I was not reflecting on the Premier's actions. However, Premier Iemma was Minister for Public Works during the period of these contracts. When I looked for evidence of his involvement in preventing the Government from getting into the trouble in which it now finds itself I was reminded that as Minister for Public Works he did not have any responsibilities other than to move a few bureaucrats around central business district offices. He was also responsible for ordering the stone for repairs to some of the heritage buildings, including this building. We are told that the tunnel is now attracting about 20,000 cars a day, which is significantly below the operator's target of 90,000. The Government should get its facts right on its projections. In the budget papers the Government talks about a figure of 105,000. I would be interested to see just what those projections reveal.

    Whilst I am on the budget papers, I emphasise the fact that this was no reimbursement of expenses; this was an unexpected windfall that the Government dragged out of these companies. I invite members to refer to the budget estimates for 2003-04 where they will find accounted for two of the payments received in 2002-03. Where do honourable members think they appeared and how do they think those payments were described? They were described as other revenue. The budget for other revenue was $50.8 million but—surprise, surprise—the Government received $344.9 million in other revenue and there is no explanation for it. It happily appeared as the Government collected this money, which had never been expected or budgeted for in relation to reimbursement. It is just a slug that taxpayers and toll users are going to have to pay over a period.

    I refer briefly to another issue that has been referred to in the media—the toll increases that were built in as a way to pay this $105 million. Those toll increases, which were put in place by the Government purely to facilitate this massive and unexpected payment, are a slug on the community.

    Ms LEE RHIANNON [5.59 p.m.]: I welcome this opportunity to discuss the cross-city tunnel debacle. However, we must remember that, while we in Parliament have this chance, residents and business people hit hard by this ill-conceived tunnel project cannot get the ear of government. This tunnel deal has many ugly aspects. One key problem is the lack of meaningful consultation. Yes, there were meetings with local residents, but these events—which were nothing more than a tick in the box for the Roads and Traffic Authority [RTA] as proof that it had consulted the community—in no way delivered satisfactory outcomes. These meetings changed nothing. The Government, after a round of feedback and consultation, simply ploughed on with its original plans.

    This deal is an example of how public-private partnerships play out. As part of the Greens' Very Cross City campaign, I met this morning with small business owners and residents in the vicinity of the cross-city tunnel to discuss the impact of tunnel-induced road closures. These residents and businesses certainly need support. Some of the stories I heard from business owners were most concerning. For example, three generations of Peter Carroll's family have run a hardware shop on William Street since 1923. It is the only hardware shop in the area. Surely this Government should be committed to retaining small business diversity in that locality. However, more and more businesses are going under. We hope that Peter Carroll's business will not be one of them, but it is not looking good.

    Peter used to employ two people to work alongside him in the shop. But he has been forced to let them go because of the drop-off in business caused by the cross-city tunnel. Peter now has enormous problems getting deliveries to the shop because trucks can no longer stop around the back. Large trucks are forced to stop on William Street, which is a most unsatisfactory place to unload goods. It is clearly a very bad situation. This morning I also met representatives of the Darlinghurst Business Partnership, which has about 100 business members—and their number is expanding rapidly. Members such as restaurants, cafes, dry cleaners, clothing stores and so on are supporting each other at a time when the Government is quite difficult to deal with. Those business owners know that, while Joe Tripodi is happy to meet cross-city tunnel operators, they and residents are not on his to-meet list. This Government has lost the plot when it comes to managing traffic, managing people and managing this city. It is time that Premier Iemma intervened. The Minister for Roads, Joe Tripodi, needs to go. Perhaps he should get another ministry—

    The Hon. Rick Colless: No, no.

    The Hon. Melinda Pavey: Just go, full stop.

    Ms LEE RHIANNON: I acknowledge the interjections. Clearly, he is not up to the job. Anybody who has heard the tortuous interviews with the Minister on this subject knows that.

    The Hon. Melinda Pavey: He didn't sign the deal, though, Lee.

    Ms LEE RHIANNON: No, he did not sign the deal but he is part of the Government. The Government has a problem and the Minister is not coping. He simply does not know how to respond; he is out of his depth. We are talking about the closure of public roads—let us not lose sight of that. The Government has the power to reverse the closure of public inner-Sydney roads as a result of the cross-city tunnel. The Greens and local residents have called consistently for the reversal of these tunnel-induced road closures. This action is needed so that public buses can run on time and the disruption to local businesses and residents can stop. I urge the Premier—if he plans to get his hands dirty on this issue—to talk to people and hear what it is like out there now that this crazy project has gone ahead. There is growing anger in the community that cannot be ignored or avoided. The Greens again call on the Government to initiate immediately meaningful discussions with residents and businesses affected by the cross-city tunnel.

    Remember that we still do not know the finer details of the tunnel deal. The Greens will give it another go and continue to call for the release of the contract. We know that the Government will persist in claiming commercial in confidence, but it should remember the basic lesson of public relations: when there is a disaster, admit all problems and then things can only get better. That is why this Government must come clean about what it has signed off on in this contract. Many tunnel documents have been released. In 2003 the Greens were successful in gaining the release of hundreds of documents. But the crucial financial and planning information remains secret. The Government constantly uses the excuses of public interest privilege and legal professional privilege to keep people in the dark. That is why the current situation is so dangerous.

    Five times since 2004 government agencies have failed to disclose all documents requested by New South Wales Greens members through the call for papers process. I emphasise that point because those requests related to a range of issues. It is evident that the Government is not abiding by the rules that were put in place following the famous High Court case. Sometimes the documents are held by the government agency and not released and at other times the Government relies on defences at law, including legal professional privilege, commercial in confidence and Cabinet in confidence.

    The Hon. Catherine Cusack: And terrorism.

    Ms LEE RHIANNON: Yes, that too. Legal advice has shown that the defences are not always claimed validly. The Greens have exposed that as a result of legal advice that we have accessed through Parliament. Many documents are released finally only through the persistence of the Greens and other members of Parliament. The Government is abusing the call for papers process to cover up sensitive documents that have significant public interest value or hiding behind falsely claimed defences at law. Big projects such as the cross-city tunnel and the private construction of public schools and issues such as the state of branch lines in rural New South Wales—all matters about which the Greens have tried to get the Government to release papers—have significant ramifications for the community. A healthy government would not fear public scrutiny, which is the cornerstone of democracy. But this Government does—and that tells us a lot about how it works.

    It is unacceptable that the public will be asked to foot the bill for the disaster that is this tunnel. That is how public-private partnerships work. That is how they play out. If a single good thing can come from this deal I hope it will be that people will understand what happens with public-private partnerships: the corporations get the handouts and the public wears the mistakes. As with many public-private projects, in this case the corporation, the cross-city tunnel consortium, will get the profits while the people carry the risks. The tunnel is a massive opportunity cost, draining hundreds of millions of dollars that could have been invested in public transport. The Government must shift its thinking and get behind public transport in a big way. That is the only way to solve the traffic crisis that is gripping this city.

    The tunnel is adding to the traffic burden in the inner city, with adverse impacts on pedestrian and cyclist safety, noise and urban amenity. Cross-city tunnel induced street closures are causing huge problems, many of which I heard about today as I stood on William Street. People told me that traffic is building up on Oxford Street and stretching back even to Moore Park. They said it is now difficult to get a taxi. Taxis used to transit the area and pick up passengers en route but with the street closures it is no longer worth the drivers' trouble. We have a big mess on our hands. The Government must get involved. It looks as though the Premier will have to take action because the Minister for Roads is clearly not up to the job. This is a fundamentally bad deal for the future of Sydney. We need a sustainable, healthy and intelligently planned city. That means looking beyond motorways and exploring public transport options that are integral to this process.

    Ms SYLVIA HALE [6.09 p.m.]: I endorse the remarks of my colleague Ms Lee Rhiannon. The Greens welcome this debate about the cross-city tunnel and the underhand deals being done between the Government and private contractors. This is the kind of debate we should have had before, not after, the tunnel was built. Many of the issues being debated today are issues that the Greens have consistently raised over the past decade about tunnel and motorway construction in this State. It has been, unfortunately, a decade of motorway madness that is not yet over. The people of Western Sydney will soon be lumbered with the Los Angeles-style M7, ironically at a time when Los Angeles itself is vowing not to build any more motorways. The Government is still trying to foist the M4 East extension and the Lane Cove tunnel on the people of Sydney. And it is refusing to rule out the possibility of the revived F6 cutting a huge swathe through the Royal National Park or the possibility of the Marrickville truck tunnel whose purpose is to link the now privatised airport to the M4.

    The debate that needs to be had now is about the nature of public-private partnerships that the Government enters into to build tunnels. The consortium behind the cross-city tunnel is made up of Cheunge Kong Infrastructure Holdings Ltd [CKI] with a 50 per cent holding, DB Capital Partners with a 30 per cent holding, and Bilfinger Berger BOT GmbH with a 20 per cent holding and it is the investment company of Bilfinger Berger AG. CKI has a history of cosy links with governments. With its 50 per cent stake, CKI is the major shareholder in the cross-city tunnel. The chairman is Li Victor, the eldest son of Hong Kong tycoon and Asia's richest man, Li Ka-shing. Li Ka-shing is the chairman of Hutchison Whampoa, which operates Hutchison's 3G network "3", which is the first 3G network in Australia that was launched by non other than two Labor Premiers, Bob Carr and Steve Bracks, on 15 April 2003.

    I suppose what is unique about the cross-city tunnel ownership is that Macquarie Bank does not have its finger in the pie. Macquarie describes itself as the world's largest developer of tollways, but in Australia its projects have been confined solely to New South Wales. It boasts that its portfolio includes the Eastern Distributor, the M2, the M4, the M5 South-west and the M7 Westlink. And now, Macquarie numbers among its tollway and airport acquisitions the former Premier of this State. As today's Australian Financial Review notes:

    Macquarie's acquisition of a former politician continues a tradition in the bank. It also employs former federal Liberal Minister Warwick Smith, MP Ross Cameron and, until earlier this year, former Victorian Treasurer Alan Stockdale. It also has a former New Zealand deputy prime minister and a former minister for Britain's Blair government.

    Why should anyone worry? We should all worry because the public quite rightly interprets such cosy retirement deals as a reward for past favours or as a way to ensure that large institutions have intimate access to all levels of government. The cross-city tunnel typifies the problems that result from public-private partnerships from cosy secret deals entered into by the Government and major developers, construction companies and finance institutions—all major contributors to both the Australian Labor Party and the Liberal Party. On 10 October 2005 in the Sydney Morning Herald Paul Sheehan put his finger on some of these problems and stated:

    And then there's that iceberg, the big picture, the public-private infrastructure model which has built the M2, the M4, the M5, the Eastern Distributor, the Cross City Tunnel and soon the Lane Cove Tunnel, all of which revert to public ownership after 30 years. You might ask, since governments have lower debt costs than private companies, why governments don't build and operate these public assets with public debts? …

    Let's not forget what happened to the first major project, the M2, which began operation in May 1997, and cost $650 million to build. Earlier this year, after eight years of operation, the M2's owner, the Hills Motorway Group, sold the tollway to Transurban. The price was $2.07 billion.

    That's a tidy $1.42 billion appreciation over the cost price eight years ago. This superb capital gain was based on the secure revenue flow provided by toll-paying motorists, who are already taxpaying voters. To get these deals done, the State Government offers incentives in the form of guaranteed minimum revenue. Each project is unique. Some financial projections are more realistic than others. With the Cross City Tunnel, a target was set at 90,000 cars a day, wildly optimistic …

    Paul Sheahan continued:

    The officials who signed off on this vision of building the tunnel and blocking the major artery of William Street and other streets in and around the CBD have all moved on—the former premier Bob Carr, the former lord mayor Frank Sartor, and the former transport minister Carl Scully—leaving the public to pay for this tunnel, one way or another.
    This is how public assets are turned into private banks in NSW.

    The problems associated with public-private contracts are numerous. They include: the non-transparent, secret nature of the contracts, which has been referred to frequently in this debate, the essential details of which are kept hidden from the public; contracts skewed towards the interests of the operating consortium rather than the interests of the public, which is typified with the cross-city tunnel; closure of feeder roads, again exemplified with the cross-city tunnel; contracts that stop public transport competing with the tollway, an example of which is the airport rail link; contract terms that protect the revenue of operators and require the taxpayer to bail them out—the Sydney Harbour Tunnel and the airport rail link; and in relation to the M5-East and the cross-city tunnel, constructions that endanger the very health of the citizens of this city who use the tunnel or live in the vicinity of the stacks or the portals at either end of the M5-East tunnel with air polluted with carbon monoxide and fine particulate carcinogenic matter.

    I said it is timely to have this debate but it is unfortunate we are having it in the aftermath of the opening of the tunnel rather than prior to contracts being entered into. The problems that this tunnel represents have been consistently identified by numerous community and other groups over the years. Unfortunately this country seems to have a fetish to adopt policies that are all the go overseas in one way or another but by the time we put them into practice we see that overseas people start to learn from their mistakes. We do not learn from the mistakes overseas, we just copy them blindly, and the cross-city tunnel is a perfect example.

    The Hon. PETER BREEN [6.18 p.m.]: This is an unusual motion that raises what I believe is a matter of public importance. I understand there will not be a vote at the end of the debate and so there is no real necessity to take a position one way or another, but this important issue deserves to be articulated. I agree with the Hon. Don Harwin, who said that if St Marys Road were to be further reduced to traffic it would cause extreme chaos. St Marys Road, which runs from College Street down to Woolloomooloo, is permanently blocked at peak hour as a result of the traffic divergence following the opening of the cross-city tunnel. Traffic in Woolloomooloo is also chaotic in the sense that it has been redirected in the entry onto the Cahill Expressway from Woolloomooloo up along Sir John Young Crescent and back towards the entrance to the bridge.

    The Hon. John Ryan mentioned proposals to alter traffic flows in Palmer Street and Oxford Street. He will correct me if I am wrong but I do not think he mentioned William Street. When I am not in Lismore I reside in a unit adjacent to William Street. William Street originally had six traffic lanes, three in each direction. It now has five lanes—three coming from the east to the city and two heading east out of the city. Because there is no right turn into Palmer Street for the three lanes coming down the hill from the east, the traffic in William Street actually flows better than ever. That is the first point I would like to make.

    The second point is that because there are now five lanes operating in William Street instead of six and there are 20,000 fewer cars as a result of the opening of the cross-city tunnel, traffic on William Street has never been better. That needs to be noted because it is proposed to close an additional lane when the trees are planted, which will mean four lanes operating in William Street. The real question is what happens with those four lanes. Provided they are open to traffic in each direction and we do not have dedicated bus lanes, for example, I believe traffic in William Street will operate efficiently and will prove to be very successful. As a result we will have fewer cars and less pollution in the central business district [CBD]. I am surprised to see the Greens opposed to the motion and speaking so vehemently against the cross-city tunnel when ultimately it will reduce traffic and pollution in the CBD.

    Ms Lee Rhiannon indicated she had spoken to people in the area and mentioned Peter Carroll, who is a businessman in William Street. I have been into his store many times and apart from Mr Carroll and his dog I have never seen anybody else working in the store. His dog is there for security, as a matter of interest. I do not know what impact the cross-city tunnel would have had on his business or any other businesses in William Street except to the extent that it is no longer possible to park in William Street. I agree this is a problem for shopkeepers and businesses generally, but most of the big businesses in William Street are up-market car dealerships that have their own entry into their premises.

    The Hon. Melinda Pavey: Don't worry about the little guys.

    The Hon. PETER BREEN: There are not many little guys there. That is the reality of William Street. Another point is that the co-ordination of the lights is now better in William Street. You can cross William Street much more easily than you ever could. There is no bank-up of traffic in College Street. I was there at 4.15 this afternoon. There is a problem from Woolloomooloo to the cathedral and there are problems in Palmer Street, but apart from one lane in William Street I am not aware of any other road closures at this stage. I know there are proposals to close roads, but we will not know what the impact will be until those proposals are implemented. Hopefully at that stage more people will be using the cross-city tunnel.

    It is certainly a matter of concern that only 20,000 cars are using it when the projected figure was 90,000. It seems obvious to me that the cost of the toll is the problem. The toll should be reduced as an experiment to see what difference it makes. From my point of view, as someone who spends some time in William Street, the proposal seems to be working—20,000 fewer cars on the streets in the CBD is a good development for people who live in the area. If that figure goes from 20,000 to 90,000 it will make William Street and the area around Darlinghurst very pleasant as a result of there being fewer cars.

    The Hon. MELINDA PAVEY [6.23 p.m.], in reply: I thank all members for their contributions and their interest in this issue, which is impacting on the lives of people in Sydney, and particularly the inner suburbs of Sydney. I would like to respond to some of the points made by honourable members. The Hon. Peter Breen's suggestion that there are 20,000 fewer cars in Sydney as a result of the cross-city tunnel is not quite right.

    The Hon. Peter Breen: I think I said in the CBD.

    The Hon. MELINDA PAVEY: Those cars would not necessarily have gone to the CBD. The problem for many people wanting to access and use the CBD is that they cannot get into the CBD. A lot of the cars are still going to the CBD but the tunnel is providing a service from the eastern suburbs to the inner west and vice versa. The Hon. Greg Pearce made some very valuable points. He raised some very interesting aspects in relation to the contract and the many unanswered questions that led to this matter being put before the House. It has forced the Government to reveal information that it had been keeping from the public and not talking about. The public was on to the Government

    The public knew there were contractual arrangements and agreements that had forced the Government to close lanes in William Street, stop right turn access to Palmer Street, install traffic calming measures in Oxford Street, and all the other barriers that have been put around the CBD and its environs to funnel traffic into the tunnel. The debate has been useful in shedding some light on the arrangements. The Hon. John Della Bosca tried to relieve our concerns by saying the money was all for work that was carried out, but that was quite well discounted by the Hon. Greg Pearce. GST is not paid on actual work, it is paid on a fee. The Government has received an enormous amount of money as reimbursement. The $98 million paid by the consortium was a fee; it was not generally reimbursement of expenses. That is a very good point.

    Another question is how the consortium was given projections that were plainly so wrong. That matter will be tied up in the courts into the future. The consortium developed this tunnel on figures that were wrong. Let us say a lot of people do not like using the tunnel because of the cost—at $3.56 it is very expensive. When I went through the tunnel recently I had to pay over $5 because I was not registered with the company for a pass. Let us say that price is not an issue for 50 per cent of people. You have to look at the other 50 per cent. If 45,000 people were supposed to be using the tunnel someone has got their figures extraordinarily wrong. It will be very interesting to follow this. There clearly has been an absolute breakdown in communication between Minister Joe Tripodi and the consortium.

    The Hon. Catherine Cusack: And the motorists.

    The Hon. MELINDA PAVEY: And definitely with the people of Sydney, who are very cross about what has happened. Most importantly, there must be discussion, negotiation and co-operation between the parties to resolve this issue. Minister Tripodi has been dropped in a huge mess from a great height and unfortunately does not have the ability or the strength of character to get the Government out of this mess.

    Minister Joe Tripodi was not around the big Cabinet table when the contract was signed. The mess that we are now in is not Joe Tripodi's fault. Ms Lee Rhiannon quite rightly pointed out that, although he was not responsible for the mess that we are now in, he is incapable of getting everyone out of the mess that Carl Scully put us in. This is probably the first big test for the Premier, although some might say it is his second big test. After all, he has not been able to outline to the people of New South Wales the true budget position. Now he has failed in his responsibility to find a solution for the small business people in William Street who are affected by the cross-city tunnel. I acknowledge that there are also some very big businesses in William Street. Businesses, be they pubs or cafes, are affected if they cannot receive deliveries—and as a result proprietors are unable to pay rent and other associated business costs. Not only are motorists affected by traffic congestion and access to the CBD. Motorists have said that they would like to use the cross-city tunnel much more often.

    The Hon. Amanda Fazio: How do you know?

    The Hon. MELINDA PAVEY: Because I talk to people outside my political circles. I talk to people all the time. One only has to listen to concerns expressed by callers on talkback radio and read letters to newspaper editors.

    The Hon. Amanda Fazio: So it is policy by talkback. Now we know.

    The Hon. MELINDA PAVEY: The Hon. Amanda Fazio would know all about policy by talkback. This is a disastrous situation. I acknowledge the contributions of the Hon. John Ryan, the Hon. Don Harwin, the Hon. Greg Pearce and Reverend the Hon. Fred Nile. I thank all members for their consideration of this matter, which is of urgent concern to the people of New South Wales.

    Motion lapsed.

    [The Deputy-President (The Hon. Patricia Forsythe) left the chair at 6.35 p.m. The House resumed at 8.00 p.m.]


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