• Tunnel under Sydney's CBD designed to facilitate flow of traffic from western to eastern
suburbs. Opened August 2005.
- Construction Cost: A$1 billion.
• Original Projections: 90,000 vehicles per day after two years
• Reality: traffic counts maxed out at 35,000 vehicles per day.
• CCT placed in receivership December 2006.
- Receivers auctioned CCT to another consortium for A$700 million
- Lenders received money back in full
- Equity investors recovered 10 to 20 cents on the dollar
- Road continues to operate
• Bank leading consortium that bid in the bankruptcy auction had declined to participate in the original venture. "We couldn't make the traffic numbers stack up …" "We were criticized at the time because 16 other banks went in, but our decision has been vindicated."
• T&R forecasts also off because of popular resistance to high tolls, local grievances against surface street changes and poor community outreach
The Committee has noted indications that bond investors have started to discount T&R projections - potentially leading to a vicious circle whereby forecasters exaggerate projections knowing investors will discount them, while investors discount them even more, knowing the projections will be inflated. As a result, it is conceivable that the better-quality issuers with more accurate projections may find themselves disadvantaged in the marketplace and may either be required to pay higher interest rates or be subject to more stringent financing terms than their projects would merit.
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108 Sydney Morning Herald; Parliament of New South Wales, Joint Select Committee on the Cross City Tunnel, First Report, February 2006.