The Sydney Cross City Tunnel has been placed in receivership for the second time in eight years, as the infrastructure continues to suffer as part of the trend of poor-performing infrastructure projects.
The collapse of infrastructure project operators such as the Queensland-based RiverCity Motorway Group back in 2011 has left investors nervous about pledging money to long-term construction deals – specifically in roads.
KordaMentha announced yesterday partners Martin Madden and Cassandra Mathews had been appointed to Cross City and its associated entities. The appointment comes after voluntary administrators were called in last week.
The administration came after the NSW Office of State Revenue decided to pursue an unpaid tax debt worth over $60 million.
Fairfax has reported the debt dates back to when the current owners, which include the Royal Bank of Scotland, Leighton Holdings and EISER Infrastructure Partners, bought the tunnel out of receivership back in 2007.
In a statement, Madden said the appointment doesn’t affect the operation of the tunnel, which will continue as normal.
“The tunnel is a world-class piece of Sydney infrastructure that will continue to play a vital function for the people of this city for generations to come,” he said.
“The receivers are confident the tunnel is an attractive asset which will provide solid returns for the right buyer.”
KordaMentha is also handling the sale process for the RiverCity Motorway Group, which operated the Clem Jones Tunnel in Brisbane.
The company collapsed in 2011 when it couldn’t get 24 separate lenders to agree on a new funding deal. Investors were drawn to the project based on significant traffic targets.
However, there could be a future for the Cross City Tunnel – Fairfax reports New South Wales Premier Barry O’Farrell could consider a plan to purchase the tunnel, in order to ease traffic congestion in the Sydney central business district.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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