Construction of a second tunnel under Sydney Harbour is now a priority in Australia and is expected to deliver net benefits of around $1 billion, the nation’s body for infrastructure assessment says.

Infrastructure Australia (IA) has added the Western Harbour Tunnel and Warringah Freeway Upgrade to its Infrastructure Priority List – a list of projects and initiatives which the body has assessed to be likely to deliver nationally significant benefits.

In its evaluation, IA said it agreed with a NSW Government assessment that the project would deliver net benefits on a present value basis of between $827 million and $1.167 billion, and would deliver a benefit to cost ratio of between 1.2 and 1.3.

It assessed the project as a priority project.

Set to create a second tunnel under Sydney Harbour, the project aims to help relieve congestion on the Sydney Harbour Bridge and the Sydney Harbour Tunnell – the two current road crossings which cross Sydney Harbour and connect Sydney’s CBD with its northern suburbs – as well as on surrounding road networks.

The project will include:

• Construction of a twin three-lane motorway of 6.5 kilometres between Rozelle Interchange and the Warringah Freeway near North Sydney (the Western Harbour Tunnel). This will link directly to WestConnex M4-M5 at Rozelle, forming a new western bypass of the Sydney CBD.
• An upgrade of the Warringah Freeway corridor between the northern end of Sydney Harbour Bridge and Willoughby Road. This enables the connection of the Western Harbour Tunnel into the existing motorway network, as well as the option for future extension to Beaches Link.

Environmental approval for the project was granted earlier this year.

Construction is expected to commence next year whilst the tunnel is expected to open in 2026.

In its report, Infrastructure Australia said that the Sydney Harbour Bridge and Sydney Harbour Tunnel are critical road links for Sydney’s transport system.

These harbour crossings serve trips that are both going into the Sydney Central Business District (CBD) and through trips to other destinations, it said.

Currently, the two crossings carry more than 250,000 vehicles per weekday: 162,000 on the Sydney Harbour Bridge and a further 96.000 on the tunnel.

By 2031, this is expected to increase to over 300,000 vehicles per weekday.

Combined, this is expected to increase the cost of congestion on the Sydney Harbour Bridge, Warringah Freeway and Eastern Distributor increase from $1.2 million per lane kilometre in 2011 to $6.74 million in 2031.

This is the highest congestion cost for any road network in NSW and the fifth highest congestion cost for any road network in Australia.

In its assessment, Infrastructure Australia noted that the project was expected to improve travel times and reliability on cross-harbour motorways near Sydney’s CBD – including the Sydney Harbour Bridge and Sydney Harbour Tunnel.

It would also improve travel times and reliability on access and bypass motorways around Sydney’s CBD.

These include the Western Distributor, ANZAC Bridge and Eastern Distributor.

Specific time travel savings include:

• 35 minutes to 24 minutes for Balmain to Chatswood
• 46 minutes to 33 minutes for Chatswood to Kingsford Smith Airport (via WestConnex)
• 66 minutes to 47 minutes for North Sydney to Parramatta (via WestConnex)
• 27 minutes to 15 minutes for Rozelle to North Sydney

The project would also help to improve the resilience of the network around Sydney’s CBD.

By reducing reliance on existing harbour crossings, the new road will help to lessen any impact which is caused by breakdowns, emergencies or disruptions which may occur on one of the crossings.

Further flow-on benefits include supporting the future growth and productivity of Sydney by improving access to labour markets in other regions of the city, improving the efficiency of connections between businesses and suppliers in Sydney, the Northern Beaches and other regions and facilitating improvements to urban amenity in the Sydney CBD by reducing through-traffic movements or congestion.

In its evaluation, Infrastructure Australia said it agreed with conclusions of the New South Wales Government’s business case which states that the preferred project option would deliver net benefits on a present value basis of between $827 million and $1,167 million.

This would deliver a benefit to cost ratio of between 1.2 and 1.3.

“The proponent’s (NSW Government’s) business case states that the preferred project option would have a net present value (NPV) of between $827 million and $1,167 million and a benefit-cost ratio (BCR) of between 1.2 and 1.3, using a 7% real discount rate and P50 capital cost estimate …,” Infrastructure Australia said in its evaluation.

“… Infrastructure Australia considers this an accurate view of the project’s net benefits, using appropriately conservative assumptions about future benefits.

“We support the proponents proposed delivery approach, as it appropriately considers identified risks including, but not limited to, interface of Western Harbour Tunnel and Warringah Freeway Upgrade components of the project, differences in the nature of the works and skillsets required for each component, and market appetite, traffic management, and risks associated with tunnelling under Sydney Harbour.

“Overall, the project demonstrates strategic fit and strong economic, social and environmental merit.”

Maintained by Infrastructure Australia, the Infrastructure Priority List is a list of projects and initiatives which have been independently assessed by Infrastructure Australia to be likely to deliver nationally significant benefits.

Inclusion on the list does not necessarily mean that any project will proceed or receive funding.

Nevertheless, the list serves as a guide to policy makers and decision makers about which projects are likely to deliver significant net benefits and should therefore be considered a priority.