Feb 14, 2017

Auditor General condemns Coalition WestConnex fiasco

The Australian National Audit Office has condemned the Federal Government for ignoring expert advice and failing to follow proper process when forwarding funding for the construction of Sydney’s controversial Westconnex toll road.

In a scathing audit report released today Auditor General Grant Hehir revealed the Government had not sighted a business case for Westconnex before it handed the NSW Government a $1.5 billion grant and a $2 billion concessional loan in 2014.

Mr Hehir wrote:

The WestConnex project had not proceeded fully through the established processes to assess the merits of nationally significant infrastructure investments prior to Australian Government funding being committed.

This situation was identified in departmental advice to decision makers prior to decisions being taken.

The report echoes similar criticism of the Coalition’s failure to observe proper process before giving the Victorian Liberal Government a $1.5 advance payment billion toward the now- defunct East-West Link in 2014, again against departmental advice.

The East-West Link was a dud project which would have returned only 45 cents in public benefit for every dollar invested.

The latest report confirms the Coalition misled Australians in the 2013 election campaign when it promised not invest in major projects without the completion of proper cost-benefit analysis.

It is clear that when it comes to infrastructure, this Government was prepared to spend billions of dollars of public money towards toll roads with no evidence as to whether they represented value for money.

This is an extraordinarily cavalier approach.

Westconnex is Australia’s biggest road project and has required the acquisition of more than 300 homes.

Mr Hehir’s report follows my letter to the ANAO in January, 2016, warning of the Opposition’s concerns about a collapse in proper process.

Mr Hehir’s report says the Commonwealth gave the NSW Government its concessional loan well before it was required and that ministers were warned that this was the case.

And while the Government had promised before taking office that it would use milestone payments for major projects to ensure accountability, the report says the criteria for milestone payments on Westconnex were agreed to “after the respective event had already occurred’’.

Labor calls on the Government to heed this report and to ensure infrastructure funding is not released to project that have not been subject to rigorous analysis.

It could start right now by dumping its support for the Perth Freight Link, another project it committed to in 2014 without a scrap of evidence as to value for money.