The WestConnex privatisation “involves arguably the biggest misuse of public funds for corporate gain in Australian history”, Sydney University transport analyst Chris Standen wrote on September 3.
Standen was commenting on the August 31 announcement by the New South Wales Coalition government that it was selling off 51% of the controversial WestConnex tollway complex to a Transurban-led consortium for $9.3 billion.
Transurban already owns seven of Sydney’s nine tollroads. Despite this, the Australian Competition and Consumer Commission (ACCC) gave Transurban the go-ahead to bid for the project and further strengthen its monopoly in the city’s tollway network.
The NSW and federal governments have invested $5 billion of public subsidies into WestConnex. Much of this was raised through the privatisation of revenue-generating public assets, including the state’s power industry, Standen explained.
The state government is also incorporating three publicly-owned motorways into the deal: the M4 (between Parramatta and Homebush), the M5 East (from 2020), and the M5 Southwest (from 2026). Credit Suisse values these public assets collectively at $9.2 billion.
Then there is the $1.5 billion that has been spent on compulsory property acquisitions and the millions spent on planning design, advertising, public relations, consultants and bankers.
The state government is also funding additional works to help prop up WestConnex toll revenues — including raising feeder road capacity into WestConnex and reducing lanes on roads competing with the tollway monster.
On top of all this, the government has agreed to plough $5.3 billion of the sale proceeds back into WestConnex as part of the deal with Transurban.
“Summing up, I estimate the [Gladys] Berejiklian government is pumping more than $20 billion worth of cash, public assets, enabling works and incentives into WestConnex, but recouping only $4 billion for [selling off] a 51 per cent share,” Standen wrote.
“This translates to a financial return of 38 cents for every dollar spent.”
Susan Price, the Socialist Alliance candidate for the seat of Parramatta in next year’s state election, slammed the sell-off.
“This sale is the culmination of a Coalition state government which has privatised $9 billion of public property, even before WestConnex” she told Green Left Weekly.
“The Socialist Alliance is campaigning to rip up the contracts.
“We are also campaigning to lift the tolls — in particular on the M4 — which is hitting the wallets of people who have to commute by car from Parramatta and further west.
“We should be helping those who use public transport, by allocating public funds to make it free and frequent —not giving it away to line the pockets of private developers and toll operators.
“Socialist Alliance members are active in the campaign calling for a massive expansion of rail, bus and tram networks throughout Sydney and NSW.”