"We all knew that this was going to happen, but now many people are going to be saddled with this gigantic debt," David White, president of Community Action for Sustainable Transport (CART) told Green Left Weekly on March 11.
He was commenting on the move to place the Clem7, Brisbane’s first and only cross-river road tunnel, into financial administration the previous week.
The insolvency of Clem7 means that the tunnel is now worth as little as 7 per cent of the $2.8 billion it cost to build. The RiverCity consortium, which owns the tunnel, owes $1.3 billion to a syndicate of banks, which co-financed the project.
The Clem7 failed financially largely because traffic flows were well below forecasts. An average of 22,000 vehicles a day traversed the 6.8km tunnel, instead of an expected 60,000 plus.
“However, a lot of people are not aware of the full financial aspects of this disaster," White said.
“Brisbane ratepayers, through the Brisbane City Council led by Liberal Lord Mayor Campbell Newman, invested $770 million into this project. Now they will never get this money back. Those funds could have better been used for flood recovery or other services.
“Many small investors sank money into the tunnel company also. They have now totally lost their funds.
“Everybody has now lost out. The road tunnel has been a never-ending sink-hole.
“From an environmental point of view, the road tunnel, oriented to private cars and trucks, was a major mistake. Even the big amount of concrete used was a big producer of greenhouse gases.
“And the $3 billion invested could have bought a huge amount of rail rolling stock. Now, in light of the failure of the private road option, perhaps the tunnel could now be diverted to running a light rail line under the river,” White said