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Lane Cove Tunnel into receivership PDF Print E-mail

LaneCoveTunnel.jpgThe Lane Cove Tunnel has collapsed into receivership, becoming the third major infrastructure project in Sydney to fail in the past two decades due to over estimates in traffic forecasts.

The failure of the tunnel a little more than three years after the financial collapse of the Cross City Tunnel puts further pressure on the State Government to turn to the private sector to fund new tollroads.
The receiver KordaMentha was appointed yesterday to take control of the 3.6-kilometre tollroad, which analysts value at between $400 million and $600 million - way below the nearly $1.6 billion the tunnel cost.
Connector Motorways, a consortium of Leighton Holdings, Mirvac and the Hong Kong billionaire Li Ka-shing, operated the Lane Cove Tunnel. Before its financial collapse, they had already written off their direct investment in the project.
The tunnel, which connects the Gore Hill Freeway with the M2, was a ''good road'' but ''never stacked up financially, especially considering the $96 million upfront payment to [the Government] and the dodgy traffic estimates the State Government provided prior to its construction'', the Opposition roads spokesman, Andrew Stoner, said yesterday.
From the outset, traffic using the Lane Cove Tunnel fell far short of estimates, with the initial traffic volume of about 55,000 a day barely half the 100,000 vehicles a day forecast by September 2008.
KordaMentha said yesterday traffic using the tunnel had risen 9 per cent over the past year. In November, traffic hit a high of 62,500 cars a day, falling back to 58,000 a day in December.
The Cross City Tunnel, which collapsed financially in December 2006, was acquired in September 2007 for $695 million, well short of the expected price of $1 billion. The tunnel cost $680 million to build.
The $700 million Airport Link, the rail line between Central Station and Wolli Creek, went into receivership just six months after it opened in 2000
 
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