The City of Sydney has proposed abandoning stage three of the controversial $17 billion WestConnex toll road in a new submission to the NSW Government.

Lord Mayor Clover Moore briefed Premier Gladys Berejiklian on a set of alternatives at a meeting a fortnight ago.

The proposal she put forward could save NSW some $7 billion, by scrapping the stage three plans for a 9-kilometre underground tunnel from inner-city Haberfield to St Peters, which will join the M4 East tunnel and the new M5 tunnel.

Background Briefing has obtained a draft copy of the proposal, which sets out a range of alternatives, including demand management, upgrades to King Georges Road, a realignment of the new M5 tunnel to come out closer to the Port of Botany, linking to the CBD via the Eastern Distributor and the sale of the vast St Peters Interchange site for housing.

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The City of Sydney's transport adviser Terry Lee Williams, who has had a 30-year career in transport including working for the NSW government, said it was not too late to redirect the new M5 tunnel, which is currently under construction, with six road-headers tunnelling underground.

"We've put to the Government they have had so many design changes to this network called WestConnex already that [they need to] pause for a few months and go back and look at their own planning," he said.

Mr Lee Williams said stage three could be abandoned easily.

No guarantees price won't rise

The Premier this morning announced the sale of 51 per cent of WestConnex, to be completed by next year, and revealed the concept design for stage three of WestConnex, which will be followed by a full environmental impact statement and then proceed to tender.

Sydney Motorway Corporation (SMC) chief executive Dennis Cliche told Background Briefing there were no guarantees the cost would not rise again, above the forecast $7 billion.

"We do our best, we've gone through extensive, exhaustive analysis [and] planning," he said.

"One hopes, touch wood, that we'll able to deliver it on time, on budget.

"I'm confident we will. But you just look around, read the papers every day — mega projects are mega difficult, and mega difficult to deliver on time and on budget."

Even as the stage three design is finalised, the NSW Government is set to appoint investment banks to sell down a half-stake in the whole project this year, for a reported $6 billion.

Toll road behemoth Transurban, which already owns 13 out of the 15 private toll roads operating in Sydney, Melbourne and Brisbane, is the mooted frontrunner and has expressed interest in bidding for WestConnex.

Ms Berejiklian rejected the city's alternate plan, saying it was "all well and good for the residents of the CBD [but] it's hopeless for the people of Western Sydney".

"Our plan is about the residents of Greater Western Sydney," she said.

"For too many years they've put up with a really crappy road network. For too long they've had governments come and go, promise them the world. We're actually delivering.

"We know people don't like to pay tolls but I bet you people would prefer to pay a fair toll rather than sit in traffic and spend money on extra fuel because they're not moving quickly enough."

Scrapping stage three would mean 'unmitigated disaster'

The 33km WestConnex, two-thirds of which is tunnels, is the nation's largest transport infrastructure project.

It's causing mayhem in inner Sydney as construction gets underway on stage one — a $4.3 billion widening of the M4 from Parramatta to Strathfield, an underground extension to Haberfield, and the $4.5 billion duplication of the M5 from Beverly Hills to St Peters.

An artists impression of a tunnel, which forms part of the stage one M4 extension. ( Supplied: NSW Government )

In an interview last week the Minister for WestConnex, Stuart Ayres, said the new M5 would be built along its existing alignment.

He said extending the M4 and duplicating the M5 without connecting the two, would be an "unmitigated disaster".

"All you would be doing is pushing more traffic through it," he said.

"You'll definitely improve travel times there, but you wouldn't be able to distribute that traffic anywhere. That will mean that tunnel will bank back up, very similar to what the existing M5 looks like now.

"Same thing would happen with the M4. You'd get further down the line, but the bank up would still happen as you got to the bottleneck.

"If you don't do that [stage three], then WestConnex simply won't work."

Minister Ayres said completing stage three, which is forecast to open in 2023, would "free up the opportunity for [the project] to connect into future road programmes".

True costs approaching $45 billion?

The City of Sydney recently estimated that the true cost of WestConnex was approaching $45 billion, after the cost of necessary local road upgrades was factored in.

That's on top of the huge expense of other new tunnels, including the Western Harbour Tunnel from Rozelle to the north shore, the Northern Beaches link and the Southern Connector to the Princes Highway.

"The planning model of road planners has long been that you create the next congestion point, that creates a crisis, the crisis creates money you get to build another road," Mr Lee Williams said.

"In bringing the M4 and M5 together through WestConnex you create a link that wasn't necessary for car traffic, it was very necessary for truck traffic, and in doing so it brings congestion very close to the western edge of the city," he said.

"The Anzac Bridge, which has been operating at capacity for nearly a decade now, is somehow expected to take an extra 18,000 to 20,000 vehicles a day, which is clearly not possible.

"And so something then has to be done because a crisis has been created and that leads us to the Western Harbour Tunnel."

Demand forecasts overstated: Lee Williams

Earlier Sydney toll roads, including the Lane Cove Tunnel and the Cross-City Tunnel, as well as Brisbane's Clem 7 and Airport Link projects, have gone broke, as opening traffic failed to meet expectations.

The SMC argues that WestConnex is a brownfields project, rather than greenfields one, which taps into proven demand in the existing M4 and M5 corridors.

But Mr Lee Williams said analysis commissioned by the City of Sydney showed demand forecasts for WestConnex were overstated.

He said the already-fragile business case would be further undermined by recent announcements about the Sydney West Metro and Western Sydney Airport, which could further undermine demand to travel along the new tunnels of WestConnex.

"I think it's critical ... that investors aren't misled and don't end up trying to support a project that doesn't actually connect and deliver what it needs to make money," he said.

"What's the public getting out of a road going to the wrong place?"

Mr Lee Williams urged the NSW Government to re-think WestConnex.

"It would be ... a sign of true leadership to say 'actually we had it right in the first place and we should go back to the original plan.'"