By Alexandra Smith, Michael Koziol and Shane Wright
NSW taxpayers have been hit with a $1.4 billion blow to the state’s infrastructure pipeline, with federal funding axed for 17 projects including the critical western Sydney interchange linking the M7 with the new toll-free M12 motorway to the city’s second airport.
The interchange – which will connect the existing M7 motorway to the under-construction M12 to the new western Sydney airport – is one of 17 NSW projects that will no longer receive federal money under a major overhaul of infrastructure funding.
An artist’s impression of the interchange between the M12 and Elizabeth Drive near the M7 in western SydneyCredit: Nsw Government
Treasurer Daniel Mookhey said the state government was “disappointed with a capital D” with the federal government’s decisions, which early analysis showed would leave NSW projects in doubt.
He said preliminary calculations by NSW Treasury showed the state would be $1.4 billion worse off over the forward estimates.
“What’s even worse is that some of the projects for which the Commonwealth have yanked money are already in delivery,” Mookhey said. “When the minister said that the Commonwealth would back the projects that are contracted, we expect her and her government to stick to its word.”
Mookhey expected the Commonwealth to “return the funding” for the M7-M12 link, which has been under construction since August. He vowed the NSW government would complete that project, but could not guarantee the future of others.
“It seems the Commonwealth are far more eager to pass the buck to us, rather than meet their responsibilities to our citizens,” Mookhey said.
“We expect better from the Commonwealth, regardless of who is in charge. NSW is doing the most to back in the Commonwealth’s population policy. We expect them to help us get the houses built, the roads built and the public transport built.”
The state government wanted lower tolls and did not intend “at this point” to place a toll on the M12 to pay for the interchange, he said.
Infrastructure Minister Catherine King on Thursday released the independent review of the 10-year, $120 billion pipeline of major works that found, without changes, it could not be delivered.
NSW has lost one-third of all projects axed in the federal government’s overhaul of infrastructure funding. King on Thursday announced 50 projects across the country that would be cut.
The multibillion-dollar upgrade of the Great Western Highway between Katoomba and Lithgow and faster rail between Sydney and Newcastle are also on the federal government’s funding hit-list.
Other projects that will have federal funding pulled include commuter car parks at St Marys and Kingswood in Sydney’s west as well as one in Woy Woy on the Central Coast.
A deal struck last year with Transurban will see motorists pay tolls on the M7 motorway for an extra three years in exchange for the tolling giant widening the highway, building the interchange and connecting an arterial route near the city’s new airport.
The former Coalition government accepted late last year an unsolicited proposal from a Transurban-led consortium to widen 23 kilometres of the motorway from two to three lanes in both directions between Prestons and Oakhurst, as well as building an interchange between the M7 and the new M12 motorway. The interchange was to be partly funded by the NSW government.
King acknowledged the interchange was an “important” project, but said there were additional “cost pressures” that needed to be worked through.
“That’s one of the projects we’ve got some continued discussions to talk about, but that’s pretty important that we deliver the connectivity to [to the new airport],” King said.
In the past month, the International Monetary Fund and the OECD have raised concerns about the volume of infrastructure projects underway across the country. The IMF warned without change, the inflationary pressures caused by so much construction could force the Reserve Bank to keep interest rates higher for longer.
The 50 projects across the country axed by King were worth a combined $11 billion, while an extra $6 billion was committed towards a series of road, rail and bridge works that are already underway.
King signalled some of those would be delayed to smooth out the construction timeline. At present, construction - expected to reach $14.1 billion this year - peaks at more than $18 billion in 2027-28 before falling away to $7 billion two years later.
King said the federal government can spend, at most, between $10 billion and $12 billion a year. “Part of this exercise has been ensuring that we do smooth that pipeline because we know we have got considerable constraints when it comes to labour costs and supply constraints as well,” she said.
A Transurban spokesperson said the “M7-M12 Integration Project has commenced construction, with all necessary funding arrangements already in place between the state Government and WSO Co, its delivery partner.”
“The project is critical in supporting the growth of western Sydney by widening the M7 Motorway and delivering a seamless connection to the 16-kilometre M12 motorway to provide direct access to the new Western Sydney International Airport,” the spokesperson said.
NSW Opposition Leader Mark Speakman said the state government should have anticipated major cuts to projects were coming, particularly the M7-M12 link.
“It defies belief that any competent state government could be blindsided by the cancellation of funding for such an important project,” Speakman said.
“Chris Minns has failed to stand up to Anthony Albanese [and] the federal government and its savage cuts to funding in NSW.”
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