Thursday, February 08, 2007

The light at the end of the tunnel comes from the fire sale

And no doubt, MacBank will be the vulture tearing at the carcass.

Fire sale as tunnel price plummets by Danny John, Vanda Carson and Jordan Baker
THE [Sydney] Cross City Tunnel, which cost more than $900 million to build, is now worth little more than a third of that, based on documents obtained by the Herald.

Files lodged with the Australian Securities and Investments Commission show that three big Australian banks are owed $110 million by the tunnel's owners. About $460 million is also owed to foreign banks.

The documents also show that despite assurances from the State Government, taxpayers have been left out of pocket.

A list of unsecured creditors - traditionally the last to recoup money - shows they were owed a total of almost $300,000, including about $100,000 to state and federal agencies.

The commission list was dated December 27, when CrossCity Motorway went into receivership. On the same day the Roads Minister, Eric Roozendaal, said there was no financial risk to taxpayers.

The documents, compiled by receivers KordaMentha, show that local superannuation funds are owed nearly $115 million in unsecured loans to the State Government, and the Tax Office is facing unpaid bills of tens of thousands of dollars.

Industry sources estimate that a toll road operator, the most likely buyer, will pay only around $350 million for the tunnel.

That price would leave the banks, led by Westpac, which is owed $46 million, facing losses of $220 million. The rest of the creditors would get nothing.

That would almost certainly prompt KordaMentha, under pressure from the banks, to launch a court action for damages against the NSW Government over the reversal of the road closures which finally tipped the tunnel into receivership.

The cost of building the tunnel.
$350m Estimated sale value.
What the banks are owed.
Likely loss for the banks.
The looming court claims.

97,000 Original daily traffic estimate.
30,000 The current daily traffic flow.

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