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Beaches Link Tunnel Officially Cancelled

On 8 September 2023, the NSW Government confirmed the decision to cancel the Beaches Link project.

The announcement came as no surprise. Then NSW Opposition Leader Chris Minns stated in October 2021 a Labor government would scrap plans for the $10 billion Beaches Link toll road tunnel and redirect the money into public transport infrastructure for Western Sydney. 

The current NSW Premier reiterated this during the campaign of the 2023 State Election.

In May 2023, the NSW Government formally placed the Beaches Link Project on hold, with associated land acquisition and project development activities to ceased.. This followed the decision of the former Government to deprioritise the project in the 2022 Budget, as recommended by Infrastructure NSW.

The State Infrastructure Strategy, published last year by Infrastructure NSW, recommended the state government reconsider its large infrastructure projects amid skyrocketing costs. In particular, the government was advised to re-evaluate the need for and timing of major road and rail projects and to prioritise these along growth corridors where new housing is rapidly being built without supporting infrastructure such as roads for workaday commuters - in Western Sydney.

The Upper House Public Works Committee released its report on the Inquiry into impact of the Western Harbour Tunnel and Beaches Link on Monday December 5th 2022 and also recommended to not proceed.

An incoming government brief from the State Treasury revealed that the expected cost of the Sydney Metro rail project had doubled from its initial estimate to $45 billion for two lines.

In April NSW Treasurer Daniel Mookhey delayed the state’s budget until September as he attempted to stabilise a budget stretched thin by the Liberals’ $115 billion infrastructure pipeline.

“We are inheriting significant economic challenges and its difficult to avoid pressures on the budget, including unfunded government programs”, Mookhey said, claiming he had inherited the largest debt in the state’s history.

Heavy borrowings by the former government, used to fund the infrastructure 'list', put NSW’s net debt on track to hit $80 billion with an interest bill of more than $2 billion a year. 

There have been more announcements this week to gouge down the debt and projected costs inherited; 

• on September 8 the new NSW government announced it will slash gross debt by more than $7 billion by suspending contributions to the NSW Generations Fund (NGF) this year, ahead of a major shakeup of the state’s fund management policies. 

''The new settings will be the largest single gross debt reduction measure proposed in the upcoming 2023-24 Budget. Interest payments are likely to fall by $1.1 billion over the forward estimates.'' the government said in a media release

• on Saturday September 9 an announcement the Government will reduce the State’s net debt by more than $4 billion by beginning the overhaul of the controversial Transport Asset Holding Entity of NSW (TAHE). That too is stated to be a big debt reduction measure in the upcoming state Budget,  and a move to end a long-running saga that has embroiled the State’s finances for years. 

Under the changes, the Government will convert TAHE into a non-commercial public non-financial corporation similar to Sydney Trains, NSW Trains and Venues NSW. The decision was made after the Government received advice that a further $615 million in funding in 2023-24 was being sought by TAHE under contractual arrangements it has with the Public Rail Operators.

''The changes will eliminate this funding requirement. It will also avoid the need for the general government sector to borrow [a further] more than $4 billion the former government intended for TAHE under the previous operating model.'' the Government said in a statement

• on September 6 the Government announced it will update NSW coal royalty rates to make sure the state earns a fair return for its resources under modern market conditions.

Coal royalties had not been increased since January 2009...

The new scheme will see coal royalties increase by 2.6 percentage points from 1 July 2024. It will replace the emergency domestic coal cap and reservation measures the previous government introduced in December 2022. The changes will improve the state’s budget position by more than $2.7 billion over the 4 years from 2024 to 2028, the Government states.

That decision also mitigates a $1.3 billion write-down in royalties revenue in the forthcoming budget.

The Western Harbour Tunnel, which included the Warringah Freeway Upgrade where residents are concerned about the sites being razed, is fully funded by the NSW Government and will proceed. The new NSW Government has committed to retaining the Western Harbour Tunnel as a public asset with any tolling revenues to be retained by the State. 

Transport for NSW has advised it will write to the Department of Planning and Environment to withdraw its State Significant Infrastructure Application for this project.

Transport will continue to carry out a road network review to assess what, if any, network improvements may be required in northern Sydney and other impacted areas to ensure a safe, efficient and reliable road network for motorists, TfNSW stated.

The houses that have already been acquired for the project, displacing some people who had thought those homes would be the last time they had, and putting those who opposed the acquisitions under four years of stress just to stay put, will be kept by the government in case they and the land they sit on are required for future roads projects.

The announcement has been applauded by some residents, while others who travel via The Spit bridge are furious they will have to pause and watch the water, birds and sailing, still, every time a boat wants to pass and the bridge is lifted. 

However, those who were counting on the tunnel to expediate funnelling thousands of more developments and people into Frenchs Forest around the northern beaches hospital to create a mini-city there are predicating gridlock on local roads during the next few years or decade.

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