Soon after the tunnel opened, documents tabled in Parliament revealed that there had been an amendment to the contract that had not been made public. We examine whether the variations in this amending deed were reasonable and whether they were handled appropriately.

After the contract was signed, further changes to the CCT were necessary. The RTA accepted responsibility for the additional costs associated with these changes. CCM carried out $35 million of work on these changes for the RTA. The RTA compensated CCM by allowing an increase of 15 cents in the base toll of $2.50 (1999 prices). The change was formalised in the First Amendment Deed (FAD), signed in December 2004.

We consider that the variations in the amending deed were reasonable. The net present value of the 15 cents toll increase accurately reflected the $35 million of work carried out by CCM. But the 15 cents contributed to making an already expensive toll even more expensive. By 2018, the toll on the main tunnel will be about 35 per cent higher than originally planned.

The RTA obtained proper approval for the amending deed and instituted procedures to manage the works it covered. But the handling of the amending deed left room for improvement. For example, there is still no clear breakdown of the costs available publicly.

We found that:

■  the RTA did not apply the 15 cents increase on a pro rata basis. The base toll for the main tunnel increased by 6.0 per cent, and for the shorter run (vehicles from the east exiting at SJYC) by 13.6 per cent

■  this increase and the escalation formula change could have been avoided if the RTA had funded the cost increases rather than pass them on to the tunnel users.

The long-term effect on patronage of the toll increases is the big question. Any reduction in patronage can only make the likelihood of achieving the main objective, reducing surface traffic in the City, less achievable.