The NSW Government injected $5.3 billion in subsidies and equity into WestConnex before selling it to Transurban for $9.26 billion in 2018. The NSW Audit Office found the business case was revised four times, the sale price did not recover the full taxpayer investment when the government's funding cost is accounted for, and the tolling regime was agreed before the social impact was properly assessed.
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$1.8B of Australian taxpayer money was wasted at NSW Department of Transport. The NSW Government injected $5.3 billion in subsidies and equity into WestConnex before selling it to Transurban for $9.26 billion in 2018. The NSW Audit Office found the business case was revised four times, the sale price did not recover the full taxpayer investment when the government's funding cost is accounted for, and the tolling regime was agreed before the social impact was properly assessed.
Spread across Australia's 10.8 million households, that's roughly $167 per family — enough in total for funding roughly 15 public hospitals for a full year.
WestConnex was conceived as a privately financed toll road. It became a de facto public project when private financing proved unviable at the returns needed. The NSW Government: committed $1.8B in equity funding in 2014; provided $2B in concessional loans through the NSW Treasury Corporation; injected a further $1.5B equity during construction to cover cost overruns; and wrote off construction risk premiums worth approximately $1.1B. Total direct and indirect government support was $5.3B. The 2018 sale of a 51% stake to a Transurban-led consortium for $9.26B was presented as a profit, but the NSW Audit Office 2018 performance audit found: the IRR calculation used to justify the sale did not apply the government's weighted average cost of capital over the 11-year construction and development period; if standard public project discount rates were applied (7%), the net present value of the government's return was negative; the tolling regime lock-in prevented the government from recapturing value as traffic volumes grew; and the sale prospectus did not disclose the full subsidy history to the market.
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