Audit objective | The objective of this audit was to examine the awarding of the contract and the commissioning of the Cross City Tunnel (CCT). |
Audit scope | The audit focused on the following aspects of the CCT: ■ the upfront payment by the successful bidder to the RTA ■ the December 2004 amending deed to the tunnel contract ■ the decision-making processes used for changing road conditions. |
| The audit did not examine: ■ value-for-money outcomes from the project ■ patronage projections for all the bids ■ the base case of the proponent - only aspects relevant to the audit scope. |
Audit criteria | The audit reviewed: 1. in respect of the upfront payment, whether: ■ seeking such payment was an unusual practice ■ it was a decisive criterion in the assessment of bids ■ the basis for reimbursement of the RTA's expenditure was clear in advance ■ it was intended only for costs incurred ■ reimbursement of the RTA's expenditure was applied as intended ■ it influenced the setting of the level of tolls ■ the offer changed over time. 2. in respect of the First Amendment Deed: ■ the reason for the changes, why they were not identified earlier and who was responsible for them ■ whether increasing the toll was the best option to cover the extra costs ■ did the extra costs reflect the scope of the changes ■ was 15 cents the appropriate amount to increase the toll by ■ the reasons for not having made information about the Deed public. 3. in respect of the road changes, whether: ■ the RTA or the proponent, CCM, proposed them ■ there were stated objectives against which to judge decisions ■ there were any made after the Conditions of Approval ■ there was a robust evaluation of each of the changes ■ there was effective consultation with stakeholders ■ there was a mechanism to judge their cumulative effects. |
Audit approach | The audit acquired subject matter expertise through: ■ interviews with staff from the Roads and Traffic Authority, the Department of Planning, NSW Treasury and relevant stakeholders ■ review and analysis of relevant laws, documents and guidelines ■ comparisons where appropriate with other states and countries, including the Victorian approach to Public Private Partnership projects. |
Audit selection | We use a strategic approach to selecting performance audits which balances our performance audit program to reflect issues of interest to Parliament and the community. Details of our approach to selecting topics and our forward program are available on our website. |
Audit methodology | Our performance audit methodology is designed to satisfy Australian Audit Standards AUS 806 and 808 on performance auditing, and to reflect current thinking on performance auditing practices. We produce our audits under a quality management system certified to International Standard ISO 9001. Our processes have also been designed to comply with the auditing requirements specified in the Public Finance and Audit Act 1983. |
Acknowledgements | We gratefully acknowledge the cooperation and assistance of representatives of the RTA, the DoP and NSW Treasury. We also would like to thank the Victorian Auditor-General's Office, Victorian Department of Treasury and Finance, Dr Christine Brown from Melbourne University, and Dr Rolf Bergmaier for sharing their expertise with us. |
Audit team | Our team leader for this performance audit was Henriette Zeitoun, who was assisted by Michael Johnston, Rod Plant and David Klein. Sean Crumlin provided direction and quality assurance. |
Cost | Including printing and all overheads the estimated cost of the audit is $406,066. |