Private finance for ‘Ghost Metro’ – fact or fantasy?

Plans to fund much of the $5.3 billion Rozelle to Central CBD Metro with private finance are a fantasy according to The Greens. But the Transport Minister says they have their facts wrong.

“The Rees government is living in fantasy land if it thinks it can attract private funds into their Metro” said Greens MP and Finance spokesperson John Kaye.

“In case the Finance Minister Joe Tripodi had not noticed, the world is in the grip of a crippling credit crisis. The large institutional investors are not moving funds around.

“After the collapse of the Cross City Tunnel PPP and the controversy surrounding potential passenger numbers, the Metro will not be seen as the place to park funds even for the few institutions that have spare cash,” said Dr Kaye.

The comments come after the project was left with little funding from the Federal Budget, and revelations that it will run 87% empty for some time if it is built.

In addition, Metro Light Rail, which runs the existing light rail line, has claimed that under the terms of its contract, taxpayers will have to pay it ongoing compensation as the CBD metro will compete directly for passengers to and from Pyrmont.

This prospect could have some bearing on the Minister’s apparently newfound support within Cabinet for extending the light rail line to Dulwich Hill, a project which would cost millions not billions. The first extension stage to Summer Hill could be up-and-running in a year whereas the underground metro has at least a six-year time frame.

Member for Balmain Verity Firth, who is only marginally ahead of The Greens in her seat, is a keen supporter of the light rail extension. She acknowledges her community “has been asking for it for years”.

The Transport Minister has also conferred with the City of Sydney which advocates extension of the light rail around a city loop to Circular Quay and Barangaroo.

The extended light rail line, however, would make the CBD metro even less viable than it appears now, making it a less attractive prospect for private finance.

“Joe Tripodi will have a tough time selling the Ghost Metro,” Dr Kaye said.

Transport Minister David Campbell says the CBD Metro was never dependent on Federal funding.

“John Kaye has got his facts wrong. Let’s be clear, the NSW Government is fully funding the CBD Metro and the project is full steam ahead,” he said.

“While Government has the capacity to fully fund the CBD Metro we’re also exploring the option of including private sector finance for the IMO contract as this has the ability to drive greater efficiencies and better customer outcomes.

“However, the contract will not depend on this and will be awarded to the best tender submission for commuters and taxpayers.”

by Michael Gormly