Toll road U-turn on privatisation stance for WestConnex motorway

A surprising about-face by the NSW government could lead to the privatisation of its remaining stake in the WestConnex motorway.

NSW Treasurer Dominic Perrottet. Picture: AAP

A surprising about-face by the NSW government could lead to the privatisation of its remaining stake in the WestConnex motorway, despite previous and ­repeated ­assurances that there were no plans to sell off the ­remainder of the project.

Treasurer Dominic Perrottet is expected to announce on Friday the commissioning of a scoping study to examine whether the government should retain or trade its 49 per cent stake in the new $16.8bn toll road.

If sold, the money raised would be used to invest in further infrastructure.

“The scoping study will look at all the available options and we will only proceed if there is clear evidence that doing so would be in the best ­interest of the people of NSW,” Mr Perrottet said.

NSW Treasury will appoint advisers to carry out the study, which will report back to the government later this year.

The decision follows an ­announcement by Mr Perrottet last month that NSW would not seek to privatise $1bn worth of forestry assets due to damage caused by the recent bushfires.

A scoping study had been investigating whether it would be viable to sell the state’s softwood plantations, but it ultimately recommended this should not proceed because of the damage.

The government has already sold 51 per cent of its stake in Sydney Motorway Corporation, the entity that built WestConnex, to a Transurban-led consortium for $9.26bn, money that was used to fund additional investment in road infrastructure around western Sydney. That sale was completed in September 2018.

Last April Gladys Berejiklian said a further selldown of WestConnex was “not on the agenda”. Mr Perrottet gave similar assurances.

Selling the government’s remaining stake would not require the approval of the NSW parliament, an official said. The state is managing ­expanding debt on account of its spending program on tunnels, stadiums and other infrastructure.

According to the most recent budget papers, net debt is forecast to expand over the next three years from $25.3bn in 2021-22 to $41.4bn in 2022-23, when the next election is expected to be held.

At the same time, the prospect of another budget surplus is similarly in doubt due to the unforeseen impacts of rolling natural disasters and the recent coronavirus pandemic.

“Our priority is providing the schools, hospitals, roads and rail NSW needs,” Mr Perrottet said, pointing to “asset recycling” — its program of selling infrastructure to pay for new projects as the means by which this goal was achievable.

Since 2011, the Coalition government has sold half its electricity networks, the Land and Property Information service, the desalination plant, the bulk of WestConnex, and its electricity generators.

In doing so, it has been able to pay for the Metro Northwest and Southwest rail lines, the redevelopment of three stadiums, the partial completion of WestConnex, the F6 freeway south of Sydney, numerous schools and hospitals and the Parramatta Light Rail project.

Mr Perrottet said this had increased the state’s net worth to $250.2bn, making it the nation’s first “quarter trillion-dollar state economy”.

Concessions for the right to operate all stages of WestConnex will revert to the government by 2060.