But six months later – following consultation with government property developer UrbanGrowth NSW – it was announced the new line would only use a small part of the heavy rail corridor before diverting along the thoroughfare of Hunter Street. This is despite Transport for NSW's advice to cabinet that running light rail down Hunter Street would mean a slower service, disruption of traffic, and higher construction and heavy rail corridor remediation costs. The advice put the cost of the preferred option at $206.7 million. The "on road and corridor" solution – similar to the final announcement – was priced at just over $300.7 million. Among those publicly advocating for a full Hunter Street option at the time was property developer and then Newcastle mayor Jeff McCloy. Mr McCloy last year played a starring role in the Independent Commission Against Corruption's inquiry into illegal political donations before the 2011 state election.

Then Liberal MP for Newcastle, Tim Owen, admitted lying to ICAC about being given $10,000 cash by Mr McCloy. Mr Owen resigned from parliament shortly after the admission and Mr McCloy later quit as Lord Mayor. The confidential documents also show the government acted against Transport for NSW advice not to end heavy rail services into Newcastle before the third quarter of 2015 as part of the plan. A minute brought to the Cabinet Infrastructure Committee by transport minister Gladys Berejiklian shows Transport for NSW advised the heavy rail line truncation "can occur at end 2014". However, it said "this would require additional investment" including a temporary platform extension, new crossovers, changes to stabling and new signalling to be installed "which would later become obsolete".

"A preferable option is for enabling works to commence in Q1 2015 with truncation occurring in Q3 2015 and all construction, including light rail, to be completed by Q1 2017." Despite this, the government decided to end heavy rail services into Newcastle on Boxing Day last year. The documents show the decision favoured what Transport for NSW called an "urban revitalisation-centric approach" over a "transport customer-centric approach". Labor transport spokeswoman Penny Sharpe said the decisions about the Newcastle light rail "have always had a stench about them".



"Rumours of changing decisions at the behest of developers rather than good transport outcomes are shown as more like fact through these documents," she said.



"The Government must explain why they have ignored Transport advice throughout this process." A spokesman for Ms Berejiklian said the route was chosen following UrbanGrowth's involvement and "strikes the best balance in providing a quality transport outcome for Newcastle and also allowing the city and its waterfront to be reconnected and revitalised".