Sydney's Cross City Tunnel enters voluntary administration, blames Government for financial woes

Updated

The owners of Sydney's Cross City Tunnel are blaming the New South Wales Government for the company having to be placed in voluntary administration.

Cross City Motorway, which is owned by the Royal Bank of Scotland, EISER Infrastructure and Leighton Contractors, was placed in voluntary administration on Friday.

It could soon be the second time owners of the two-kilometre tunnel linking the western and eastern fringes of Sydney's CBD have gone into receivership.

The current owners bought the concession in 2007 after the first owner collapsed when usage fell well short of traffic forecasts.

Cross City Motorway had been in talks to refinance a $70 million debt, but its chairman Ed Sandrejko says the State Government's legal action to recover $64 million in stamp duty made a deal impossible.

The Office of State revenue is claiming the duty over the purchase of the tunnel in 2007.

A court recently ruled the company would not have to pay the stamp duty, but the Office of State Revenue is appealing against that ruling.

Mr Sandrejko also says the previous Labor government's decision to lift some of the road closures reduced profitability.

The Government has not directly responded to the company's comments.

However, a spokeswoman for Roads Minister Duncan Gay says motorists will not be affected.

"Even though Cross City Motorway Pty Ltd has gone into voluntary administration, it is still required to operate and run the motorway," she said.

"Cross City Motorway Pty Ltd will advise the Government of future plans in due course."

'Classic case of a failed public-private partnership': Greens

The Greens say the tunnel is a failed public-private partnership, and the State Government needs to negotiate a better deal.

The Greens have long criticised the motorway contracts.

MP David Shoebridge says they attempted to force traffic into the tunnel by closing local roads and restricting public transport.

"This is a classic case of a failed public-private partnership which was based on an anti-public transport, an anti-alternative transport model which was never going to be sustainable," he said.

He says the Government needs to make sure there is a better public policy outcome under any new owner.

"We don't want to have those restrictions hanging around the neck of Sydney's transport planners for another 10 or 20 years," he said.

Topics: road-transport, company-news, business-economics-and-finance, states-and-territories, sydney-2000, nsw, australia

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