Audit office highly critical of government funding for WestConnex

An expanded King Georges Road interchange at Beverly Hills, which opened before Christmas, is the first component of the New M5. Picture: John Veage

An expanded King Georges Road interchange at Beverly Hills, which opened before Christmas, is the first component of the New M5. Picture: John Veage

A $2 billion loan for the WestConnex motorway from the Coalition government failed to achieve its key goal of accelerating the project's second stage by two years, the National Audit Office has found.

Instead, completion of the 11-kilometre New M5 as part of Australia's largest toll-road project is less than six months ahead of its original completion date.

In a report critical of the federal government's funding of the $16.8 billion motorway, Commonwealth Auditor-General Grant Hehir also found that upfront payments and adjusting milestones for later payments "did not adequately protect the Australian government's financial interests".

His report, released on Tuesday, was particularly scathing of funds being paid in advance of the project's needs.

Advice provided before a $500 million injection of funds in 2014 "identified that a payment of that magnitude was not yet required", it said.

The $500 million was part of $1.5 billion in direct funding from the federal government for the 33-kilometre motorway.

The Audit Office has calculated that the cost of the funds provided before they were actually required has amounted to about $20 million since 2014.

The report said a decision in May 2014 by the then Abbott government to pay the $500 million in advance led to the motorway project being approved without "any documented analysis and advice to ministers that the statutory criteria for giving such approvals has been met".

Furthermore, three other milestone payments totalling $1 billion were designed in a way that "did not adequately protect the Australian government's financial interests”.

“Advice to ministers did not adequately identify or quantify the costs and risks associated with providing a concessional loan," the report said.

In contrast to the direct funding, the $2 billion concessional loan was made as part of an agreement with the NSW government.

The report said there was evidence the loan was "not needed to accelerate the second stage".

Audit office highly critical of government funding for WestConnex appeared initially in The Sydney Morning Herald.

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