NSW Government walks away from Cross City Motorway negotiations

June 5, 2006 New South Wales Premier, Morris Iemma announced on Sunday that his government would be reversing 13 controversial road changes and alterations that were carried out to force traffic into the Cross City Tunnel.

The road changes were initially approved by the NSW Roads and Traffic Authority and formed part of the contract with the Cross City Motorway (who operate the tunnel).

The government wished also for the company to lower the toll from AUD$3.37 to the $2.90 discounted toll that will expire at midnight Mon. Jan 5.

Cross City Motorway wanted AUD$96 Million as compensation but the government's highest offer was only $30 Million. Cross City Motorway were being "greedy" said NSW Roads minister, Eric Roozendaal.

NSW Premier Morris Iemma said that his government had tried to negotiate a suitable compensation package. "We've negotiated over the last three months in good faith. We've done our best ... to reach an arrangement satisfactory to all -- to taxpayers to motorists and one which the company could live with" he said.

Despite the government walking away from negotiations the company could still come to the government with an offer, Mr Iemma said.

"Obviously, the ball's in the company's court in relation to their response," he said.

The Premier said it would be wise for the company to continue the reduced toll. "It is in their commercial interest to ensure that motorists have got incentives to use this road."

The NRMA, the peak motoring organisation in NSW, also believes that the toll should remain at its discounted rate. "It's now up to the Cross City Tunnel operators to also make sure motorists get a fair deal by only charging a fair toll and not raising the toll back up to that exorbitant level it was before" said NRMA president Alan Evans.

Mr Iemma said he expected there might be a lawsuit made by Cross City Motorway against his government but believes his government is in a good position to defend any claims for damages.

Cross City Motorway is expected to respond on the issue today.