Justification for the tunnel
The government has refused to release the business case for the project, despite requests under Freedom of Information/GIPAA laws. Estimates by residents with relevant expertise have suggested that there is no valid business case for the project – that for every $1 spent, it would return only 70-80 cents worth of benefit to the community.
This is similar to an estimate by Dr Peter Abelson made in May 2019 of a CBA of a 68 cent return. Dr Abelson has a PhD in economics with speciality in cost-benefit analyses, having conducted them in the industry for many years. He was mayor of Mosman Council from 2012-2017, and has publicly stated that he was originally a firm advocate for a tunnel whilst mayor of Mosman, but after looking at the financial viability is now opposed to a tunnel.
At a price tag of an estimated $12 billion, or a cost of roughly $45,000 for every single resident on the Northern Beaches, when complete it is estimated to only be worth $3-4 billion to an investor to be profitable.
The only way to make it more profitable is to increase the traffic using the tunnel – achieved by reducing the availability of public transport, significantly increasing visitors by car to the peninsula, and/or increasing population on the Northern Beaches by 20% or more. As part of a standard cost benefit analysis, one of the benefits calculated is the opportunity for population growth – despite overdevelopment not being considered as a “benefit” by the community.
We also know the assumptions for traffic in the EIS have not factored in changes to travel habits and working from home due to COVID-19 and into the future, treating COVID-19 as having only a “temporary” impact. Recent studies have shown travel by private vehicle continuing to be down 10-20%, and public transport down 40-60%(1), This is explained by research showing that over 60% of Sydney workers did so from home during 2020, with 75% of workers believing they would continue to do so into the future(2).
When the COVID-19 pandemic is resolved, at least 40% of Northern Beaches residents who commute to the city or elsewhere will no longer commute daily. Not only will they only go to work 1-3 days per week, but they will not necessarily travel during the morning peak period. This will have a comprehensive impact on the “traffic volume trend” from 2016 that TfNSW have used to justify the tunnel.
Infrastructure Australia is an independent organisation that exists to advise governments on the priority of large projects – and has categorised the Beaches Link tunnel as the lowest possible priority.
