Cross City Tunnel

Updated on Oct 27, 2023

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Location Sydney Opened August 2005 Length 2.1 km (1.3 mi) Operator Transurban		Work begun January 2003 Owner Transurban Start Western Distributor Number of lanes 4

Toll $5.47 (class 2), $10.93(class 4) Ends New South Head Road, Sydney, Eastern Distributor

The Cross City Tunnel is a 2.1 km-long twin-tunnel tollway located in Sydney, New South Wales, Australia, which is operated by Transurban. It links Darling Harbour on the Western fringe of the central business district to Rushcutters Bay in the Eastern Suburbs. The tunnel is actually two distinct tunnels and they largely follow a route underneath William Street and Park or Bathurst Streets, depending on whether it is eastbound or westbound.

Map of Cross City Tunnel, New South Wales, Australia

In early 2002, a year before construction began, transport planner Michelle Zeibots was quoted in local newspapers saying the tunnel would not reach its traffic targets. In December 2006 the tollway became insolvent due to low traffic volumes, accumulating debts of over A$500 million. On 20 June 2007, Leighton Contractors and investment bank ABN AMRO were chosen as preferred purchasers of the Cross City Tunnel Group for $700 million.

It is privately owned and operated, but will revert to public ownership in 2035.

Design

The tunnel in fact comprises two road tunnels — one eastbound and one westbound — each with two traffic lanes, in addition to a third small ventilation tunnel. The Cross City Tunnel also links with the Eastern Distributor, enabling vehicles traveling from the West to travel to the Airport and Southern Suburbs. From the Eastern Distributor Northbound, motorists have the ability to connect to the Cross City Tunnel Westbound, avoiding the CBD once again.

The tunnel was Sydney's first completely electronic tollway requiring the driver to have an electronic tolling tag installed in their car or register for an electronic pass (for casual or less frequent users).

History

Sydney's Cross City Tunnel was predicted to fail before construction even began. In February 2002, a year before tunnelling commenced and four years before it ultimately fell into receivership due to low traffic volumes, Sydney traffic planner Michelle Zeibots told local media that the tunnel was incapable of carrying the volume of cars that the Transport Minister, Carl Scully had predicted. She said it was "physically impossible" for the tunnel to carry the predicted 95,000 cars each day. While the NRMA was enthusiastic about building the new motorway, Dr Zeibots was scathing. "It's not a serious transport project," she said at the time. "The inputs and outputs just don't add up."

Despite the warnings of a traffic shortfall, in 2002, the government of Bob Carr awarded Cross City Motorways the contract to build, own, and operate an east-west tunnel underneath the Sydney CBD.

Construction work for the cross city tunnel commenced in January 2003, and the tunnel was originally scheduled to open in October 2005. In April 2005 the NSW government announced that the tunnel would open four months early, on Sunday 12 June.

The opening day was subsequently postponed due to detailed commissioning works, with the official opening going ahead on Sunday 28 August 2005. The tunnel was opened by the Premier of New South Wales, Morris Iemma, using the same pair of scissors used to open the Sydney Harbour Bridge in 1932, the Sydney Harbour Tunnel in 1992 and the Anzac Bridge in 1996.

Prior to the vehicular opening there was a charity walk-through, as is customary for new roadways in Sydney, which attracted a large number of public visitors. The first traffic passed through the tunnel late on 28 August.

Later a three-week toll-free period was announced by the operators. At the same time, the operators announced a freeze on toll increases for twelve months and the fee for casual (non-electronic tag) users was waived.

In February 2006, media speculation of a "buy-out" by the New South Wales government began. The rumoured price would exceed A$1 billion while the tunnel only cost A$680 million to build. The government stated no discussions had taken place, and the Cross City Tunnel Consortium stated that they were not considering selling the tunnel and were "in for the long haul". At the time the average trips per day was approximately 30,000.

This was shortly followed by a report from the NSW Upper House committee headed by MP Fred Nile recommending that the toll be reduced, and surface road closures reversed. While the recommendations could not be enforced, the Cross City Tunnel Consortium did consult with the government before announcing a discount to the toll, as well as other changes on 3 March 2006. Specifically, the Consortium announced that the toll would be halved to $1.78 for three months, that some planned road closures would not be pursued, and that some existing road closures would be reversed. Two days prior to the end of the half-price toll period, the Premier of NSW, Morris Iemma, ended negotiations with the Cross City Tunnel Consortium without an agreement, announcing the immediate reversal of some road closures, contrary to the contract.

In November 2006, it was reported that the motorway was in financial difficulties, and that additional equity would be required from the tunnel's investors in order to avoid placing the tunnel in administration. At the same time, it was suggested that traffic volumes of between 60,000 and 90,000 per day were needed in order for the consortium to meet the tunnel interest payments. The NSW government responded to the reports by indicating that it would not buy out the tunnel, nor assist in its financing.

On 27 December 2006, a syndicate of 16 Australian and International banks appointed the insolvency firm KordaMentha as receivers and managers for Cross City Motorway Limited after the project accrued debts exceeding A$560 million. The tunnel was later sold.

On 13 September 2013 the new owner of the tunnel placed itself in voluntary administration, saying that it was unable to refinance its debt due to action by the New South Wales government to claim $64 million in stamp duty on the original sale. Transurban purchased the tunnel from the managers and receivers in June 2014 for approximately $475 million.

Financing and Ownership

The $680M tunnel was originally financed by a combination of international equity and both locally and internationally sourced debt.

Equity of $220M was provided by three international companies, Cheung Kong Infrastructure (50 percent), DB Capital Partners (30 percent) and Bilfinger Berger BOT (20 percent). The remaining $580 million was financed through a syndicate of Australian and international banks led by Westpac and Deutsche Bank.

Usage

There has been some controversy over the expected and actual usage of the tunnel during its initial operation. The number of vehicles traveling through the tunnel has been debated in the media, along with alleged discrepancies between the actual number of trips and the anticipated number of trips in the tunnel's financial projections.

Tunnel operators indicated that they expected initial uptake of the tunnel to reach approximately 35,000 vehicles per day, increasing over its first year of operation to a projected 90,000 vehicles per day. Once documentation of the official projections was released, it was found that the operators projected daily traffic after six months at 85,352.

Approximately one month after opening it was reported in the media that only 20,000 vehicles a day were using the tunnel, although the government and toll operators maintained that the average number of daily trips since opening was approximately 25,000.

At the completion of the initial three week toll free period, the tunnel operators announced that the daily tunnel usage had increased to 53,000 during that time.

A few weeks after the toll had been reinstated, it was reported in the media that usage had dropped back to approximately 27,000, an improvement of 7,000 cars per day compared with usage prior to the toll free period.

Following the toll-free period, the tunnel operator indicated that it would likely be two to three years before the tunnel reached its full potential.

In March 2006, in the first few weeks after the tunnel operators announced a temporary halving of the toll, media reports indicated that usage had increased to approximately 33,000 per day.

Criticisms

There are a number of criticisms that have been made about the tunnel, more so than for similar large capital works programs in Sydney, including the following:

Disruption to traffic in the CBD not using the tunnel: The tunnel has attracted significant media attention, as many of the diversions put in place on the streets above caused increased traffic congestion and motorist confusion. Some resentment regarding surface road changes has been expressed in the media. The disruption that has generated the most complaints is the reduction of William Street to one general lane, and one bus lane in each direction, which has exacerbated traffic jams. The bus lanes are now T2 transit lanes. On 6 December 2005 the head of the Cross City Tunnel said under oath that the company would not seek compensation if some of the controversial road changes were undone; but on 7 December that decision was reversed.

Undisclosed contract conditions: It is generally thought that the state government agreed to the lane reductions in William Street as part of contract for the Cross City Tunnel. However, the government has repeatedly refused to make the contract which it agreed to public, much to the dismay of the media and the state's auditor-general. A summary has been released, which contained details of more possible road disruptions which would result in making traffic congestion worse for motorists not using the tunnel. It was also revealed that 50 cents of the toll price is due to a $105 million payment that the operators had to make to the government for permission to build the tunnel. In late October 2005 after ongoing criticism, some contract terms were released to the public, but the government is still refusing to release 3,000 pages of material. A few days after this, the head of the Roads and Traffic Authority was sacked, for failing to disclose an amendment to the contract, which allowed the toll to be increased by 15 cents. In November 2005, the ICAC was asked to investigate allegations that sensitive Cabinet documents were leaked to the Cross City Tunnel operator during negotiations. The investigation found that the allegation was not substantiated.

Misleading signage: There have been complaints in the media after the opening of the tunnel about deceptive signage indicating the tunnel was the only route to get to the Harbour Crossings (in particular, the Sydney Harbour Tunnel) from Sydney's Eastern Suburbs. In response, the NRMA motoring group published a route outlining how to reach the harbour crossings while avoiding the Cross City Tunnel toll.

Toll applies in both directions: the toll for the Cross City Tunnel is being charged in both directions, unlike other toll roads near the city centre, such as the Sydney Harbour Bridge, the Sydney Harbour Tunnel, and the Eastern Distributor, all of which only charge for travel in one direction.

Price of the toll: The price of the toll for a one-way trip is $4.32 with an E-tag, and $6.75 without an E-tag (westbound and eastbound) $1.87 with a tag when exiting on Sir John Young Crescent/Eastern Distributor, and $5.35 without. Some would say this is a rather high price for a short 2.1 kilometre journey when a slightly slower but free alternative is available. The Government's then-Roads Minister, Joe Tripodi, has pressured the tunnel's operators to reduce the toll, but has admitted he cannot force them to do this. The tunnel's operators have previously ruled out a toll reduction. Additionally, the price of the toll is automatically increased by the CPI each quarter, whereas other tolls are usually increased less frequently, but in neat increments of 50 cents.

No cash payment, and higher price for drivers without an E-Tag: This was the first cashless motorway in Sydney. Drivers who did not have an E-Tag and who used the tunnel had to phone the tunnel operators or go the tunnel's website after their journey, and pay the toll, plus an additional $2.50 administration fee. Those who didn't do this received 2 warning letters, then a $130 fine. This is now the case for all toll roads and bridges in Sydney.

Concerns about exhaust fumes from the tunnel: After opening, the tunnel proved to be quite poorly ventilated for the expected number of vehicles, and even for the much lower number of vehicles actually using it. Currently air is released from the tunnel via the single 65-metre high ventilation stack located between the existing Western Distributor viaducts above the eastern side of Darling Harbour. There is general unease in Sydney about exhaust stacks from any motorway, after reports in the media about people living near motorway exhaust stacks experiencing health problems. However, since the tunnel's opening there has been almost no discussion of this topic, with most of the focus directed towards the issues listed above, together with general concerns regarding "Public Private Partnerships" (or PPPs).

One of the tunnel's major shortcomings is the fact that traffic is forced straight onto suburban roads at both ends, creating additional traffic congestion at these locations. This might be rectified at the Western end if construction of the M4 East tunnel goes ahead.

In September 2005, as part of the media attention surrounding these criticisms, a local newspaper commissioned an audit of the usage of the tollway by independent surveyors who found that on a single day, around 20,000 vehicles had used the tunnel. This was countered by a spokesman for the tunnel operator, who said about 550,000 vehicles had used the tunnel in its initial operation, at an average of approximately 25,000 cars per day.

In October 2005, a call centre handling calls related to the Cross City Tunnel halved its staff due to the low number of calls.

In September 2006 by a Sydney Morning Herald report that unpaid tolls were not pursued for 12 months (along with the M2 Hills Motorway) due to a lack of agreement on a system for passing of the details to the RTA. The Cross City Motorway has since promised that toll evaders will be pursued.

References

Cross City Tunnel Wikipedia

(Text) CC BY-SA

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