The Guardian November 29, 2000


Airport link stink

The privately-run airport rail link in Sydney has been shown up as a 
debacle that will cost the people of NSW hundreds of millions of dollars. 
Revelations of secretive contractual arrangements with government are 
surfacing almost on a daily basis and are yet more proof that the provision 
of vital public services on a for-profit basis simply does not work.

The Airport Link Corporation (ALC)  a consortium made up of Transfield 
Holdings and French construction corporation Bouygues SA  signed a 
contract with the former Fahey Liberal Government in 1995, forming a 
Government-corporate joint venture.

The deal included the Government providing $470 million of the $600 million 
cost while the consortium was to build and operate the four stations on the 
10 kilometres of line from from the central business district, through 
Central Station to Sydney Airport.

The cost inevitably blew out with the government paying up $700 million.

The private operators were to also keep ticket revenue for the 30-year life 
of the contract, with CityRail forecasting immediate passenger numbers of 
48,000 per day, growing to 68,000. The figure thus far is about 12,000.

The deal was secretly tied up, in record time, just prior to the 1995 
elections so as to drum up votes for the Fahey Government, which was voted 
out anyway.

The Government was going to be the big winner at the time the deal was 
struck, set to rake in in an estimated $148 million during the 30 years, 
all clear profit.

But things weren't quite as they seemed: the contract had a sting in its 
tail. It stipulates that the Government must buy the four stations should 
the ALC default on its loan from the National Australia Bank. Cost, $200 
million, bringing taxpayer funding of the project to a whopping $900 
million.

The ALC  which is now likely to go into receivership   is also 
demanding the Government pay it $15 million as compensation for low ticket 
sales.

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