One of the NSW Labour Government’s flagships, but more recently troubled public private partnerships, the Sydney Cross City Tunnel has collapsed into receivership less than 18 months after it opened.
The $800 million tunnel has only achieved one third of the planned 90,000 cars a day, with the net effect that the company became unable to pay interest on its massive debt.
The CrossCity Motorway Board met yesterday, appointing administrators, with ownership of the tunnel passing to the banks, which subsequently called in receivers KordaMentha.
The tunnel will remain open though with tolls possibly falling as receivers, Martin Madden and David Winterbottom attempt to attract more traffic.
The receivers have said that their plan is to revive the business but also that they are likely to sell it within 18 months, with the most probable buyer being Transurban.
The receivers said they would work with the Government and the RTA to secure a long-term sustainable business and they described the change as a “fresh start”, with Mr Madden adding, “We believe, with some changes, it can and will succeed.” “We don’t intend to make significant changes immediately, but we will look at all the options to ensure sustainable growth in the business.” “It is year 2 of a 35 year project and we believe that the tunnel can ultimately be successful.”
The three major shareholders, Cheung Kong Infrastructure – 50%, DB Capital Partners 30% and Bilfinger Berger 20% per cent, will reportedly lose their investment, with banks, including Westpac and Deutsche Bank, hoping to recoup as much of their $560 million loan as possible.
Report by The Mole
