New South Wales

Assessment of NorthConnex adequately considered value for money: NSW Auditor-General

THE processes used to assess NorthConnex adequately considered value for money for taxpayers and road users, according to a report released last week by the Auditor-General of NSW, Margaret Crawford.

The report also found that the impact of tolling concessions on road users and the motorway network was consistent with policy objectives described in the 2012 NSW Long Term Transport Master Plan.

"By the measures used to assess unsolicited proposals and public private partnerships in NSW, NorthConnex represents value for money for the NSW Government," Ms Crawford said.

Artist's impression of view inside NorthConnex tunnel
Above: Artist's impression of view inside NorthConnex tunnel / NorthConnex.

The audit identified two areas where there were deficiencies. The current Unsolicited Proposals Guide is not clear on the timing of key assurance stages. Additionally, record keeping for this project did not meet the standards for government record keeping.

"Given the risks associated with unsolicited proposals, it is critical for NSW Government participants to keep complete and accurate records of their activities and decisions," Mr Crawford said.

NorthConnex is a nine-kilometre tolled motorway tunnel between the M1 Pacific motorway at Wahroonga and the M2 Hills motorway at West Pennant Hills. The project was submitted to the NSW Government as an unsolicited proposal by the M7 shareholders in March 2012. Construction began in February 2015 and the tunnel is expected to open to traffic in late 2019.

The Auditor-General recommended that the Department of Premier and Cabinet and NSW Treasury should immediately improve record keeping to ensure compliance with the State Records Act 1998 and the NSW Government Standard on Records Management.

Artist's impression of aerial view of northern ventilation outlet and tunnel portals
Above: Artist's impression of aerial view of northern ventilation outlet and tunnel portals / NorthConnex.

A second recommendation is for the Department of Premier and Cabinet to publish an updated 'Unsolicited Proposals – Guide for Submission and Assessment' by December 2017.

According to the Auditor-General, the update should clarify obligations with requirements in other NSW Government policies, such as the NSW PPP guideline and Infrastructure Investor Assurance Framework. It should also require:

a) a business case to be prepared, and a business case gateway review completed, as part of the assessment of the detailed proposal (currently stage 2); and

b) probity reports must be completed and considered before the decision to proceed to the next stage.

More information is available from the Audit Office of New South Wales website at <http://www.audit.nsw.gov.au/>.

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