No light at the end of Sydney's city tunnel
Weak traffic numbers mean the motorway continues to struggle financially, and is facing receivership for the second time since it opened in 2005.
Lenders to the consortium that owns the motorway are understood to be considering putting the tunnel into receivership, due to concerns over a disputed $60 million stamp duty bill, and the lower traffic numbers.
The owners of the motorway - Leighton Holdings, the Royal Bank of Scotland and EISER Infrastructure Partners - do not disclose the number of vehicles that travel through the controversial toll road every day.
But the last time the NSW government revealed the figure, in 2009, just 35,400 cars per day on average used the motorway.
In contrast, patronage forecasts by the tunnel's first owners predicted 70,000 cars would be using the tunnel daily in 2005 and more than 90,000 a day by 2013.
The tunnel opened in 2005 at a cost of $680 million and went into receivership in 2006.
Annual reports issued by its current owners, who bought it out of receivership in 2007, show toll revenue growth has increased only at the rate of inflation since 2009.
A spokesman for the motorway said the Cross City Motorway company was "still actively renegotiating to refinance the debt", referring to a $79 million loan it had wanted to renegotiate this month.
But those negotiations have been thrown into doubt by a $60 million stamp duty bill. The motorway successfully challenged this bill in the Supreme Court but the Office of State Revenue has since filed a notice of intent to appeal, placing its future ownership in the hands of main lender RBS.
Frequently Asked Questions about this Article…
The Cross City Tunnel is a tolled Sydney motorway that opened in 2005 at a reported cost of $680 million. Its current owners are Leighton Holdings, the Royal Bank of Scotland (RBS) and EISER Infrastructure Partners, who bought the asset out of receivership in 2007.
Lenders are understood to be considering placing the tunnel into receivership again because traffic volumes have been much lower than originally forecast and a disputed $60 million stamp duty bill has put refinancing negotiations and the owners’ finances under pressure.
The NSW government reported an average of about 35,400 cars per day in 2009, roughly half the traffic the tunnel’s first owners forecasted (70,000 cars daily in 2005 and over 90,000 a day by 2013).
Annual reports from the current owners show toll revenue has grown only at roughly the rate of inflation since 2009, rather than showing strong real growth beyond inflation.
The motorway received a $60 million stamp duty bill that it successfully challenged in the Supreme Court, but the Office of State Revenue has filed a notice of intent to appeal. That unresolved legal dispute has thrown refinancing into doubt and could leave the motorway’s future ownership decisions in the hands of the main lender, RBS.
The Cross City Motorway company said it was actively renegotiating to refinance debt, referring specifically to a $79 million loan it sought to renegotiate, but those talks have been complicated by the stamp duty dispute and weaker-than-expected traffic.
Yes. The tunnel went into receivership in 2006 shortly after opening and was bought out of receivership by its current owners in 2007. Lenders are reportedly weighing a second receivership due to current financial pressures.
Investors following this asset should monitor reported traffic numbers, toll revenue trends (especially growth versus inflation), the outcome of the $60 million stamp duty appeal, and any lender actions or refinancing updates—because these factors are central to the motorway’s financial health and ownership prospects.
Call 1300 880 160
Start a chat
Schedule a call
