We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.
Selling or redeveloping land across Sydney’s rail network and morphing into a big property developer to deliver more than $40 billion in government windfalls are part of a secret plan by the state’s scandal-ridden rail corporation.
The ambitious plan, outlined in a confidential strategy obtained by the Herald, includes new hotels and the rezoning of more than 50 sites near train stations in Sydney suburbs for high-density developments.
The plans for a large area in and around Central Station include 100,000 square metres of hotels, apartments or student accommodation.Credit:Steven Siewert
The strategy reveals land at Wolli Creek, Hurstville and Redfern are on a hit-list of sites the Transport Asset Holding Entity (TAHE) plans to sell to “raise funds for future development”.
Accelerating work on an $11.6 billion development of 24 hectares of government-owned land in and around Central Station, as well as a further 10 hectares at Redfern and North Eveleigh, are outlined as strategic priorities over the next three years. Parramatta, Granville, Newtown, Dundas and Glendale are among other sites eyed for development in the longer term.
The plans for Central include 100,000 square metres of hotels, apartments or student accommodation, and more than 40,000 square metres of shops, restaurants, cafés and bars.
TAHE, which controls billions of dollars worth of the state’s rail assets including trains, stations and rail tracks, has been the subject of intense scrutiny and criticism since a Herald investigation last year revealed it had been set up to artificially inflate the NSW budget.
Since then, the government has been forced to write down the value of TAHE by $20 billion and inject billions of dollars into the rail corporation to placate the Auditor-General after delays in signing off the state’s accounts.
The 10-year business plan, which was completed in February, proposes that TAHE diversifies and becomes a property developer and owner of assets including hotels and food courts.
TAHE estimates it could turn over $1.9 billion a year in revenue if it develops and leases property. Alternatively, it could generate $40 billion if it develops and sells “transport assets”.
“Potential property development can realise significant value windfalls for government,” the business plan states.
Dozens of sites across Sydney’s rail network are eyed for sale, rezoning or development. Credit:Steven Siewert
Shadow treasurer Daniel Mookhey said the only reason the government was scheming to turn TAHE into a giant property developer was to plug a multibillion-dollar hole it was burning in the budget.
“If TAHE wasn’t a financial disaster, it wouldn’t have to auction $40 billion of the public’s transport assets,” he said. “Secretly plotting to build a hotel above Central Station shouldn’t be TAHE’s core business. Its job is to manage our railways safely.”
A Treasury spokesperson said both Treasurer Matt Kean and Finance Minister Damien Tudehope had endorsed TAHE’s 2021-22 statement of corporate intent, which summarised its planning and business strategy.
A TAHE spokesperson said it had prepared a property strategy focused on safety and sustainability to deliver long-term, low-risk commercial return.
“This is not unusual for similar state-owned corporations and infrastructure agencies across the world and is in line with standard business practice.
“One of our five legislated aims is to deliver positive commercial outcomes for NSW taxpayers. As a result, the TAHE board has explored a range of options across our portfolio.”
TAHE denied it had plans to operate hotels and said there was no intention of increasing rent for tenants.
An insider, who requested anonymity, said the business plan revealed a mad scramble to make TAHE stack up. “What we are seeing outlined in this document are increasingly outlandish strategies to effectively turn lead into gold,” the insider said. “But it’s also high risk.”
TAHE’s business plan forecasts a “revenue uplift” by increasing retail spaces and “improving tenant selection”.
It outlines the potential for a $610 million real estate redevelopment of a precinct in and around Parramatta station, which it estimates has a “gross realisation of $1.1 billion”.
The plan cites a “massive shortage of supply” in Parramatta, partly due to the government moving more offices there. However, it lists among the risks relocating a bus layover and a “potentially complex station integration”.
A similar development at Hurstville is estimated at $200 million.
The business plan says the “optimal model” for TAHE should be to “engage and partner with developers to de-risk delivery and capitalise returns”.
Our Breaking News Alert will notify you of significant breaking news when it happens. Get it here.
Copyright © 2022