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Levy delay leaves funding hole for Parramatta light rail second stage

The Berejiklian government has failed to raise a single dollar to help fund Parramatta's multibillion-dollar light rail line from a much-vaunted special levy on new apartments it announced nearly four years ago, casting further doubt on the second stage of the project.

The delays to imposing a special levy means the government has already missed out on collecting up to $80 million from developers and owners of apartments and other homes recently built near the light rail corridor, because it will not be applied retrospectively.

The lack of progress on securing extra funding comes amid serious doubts about the government pushing ahead with the second stage of the line from Rydalmere to Olympic Park via Melrose Park and Wentworth Point.

The route of the second stage of the light rail was slated to pass through Wentworth Point, which has already undergone an apartment boom.

The route of the second stage of the light rail was slated to pass through Wentworth Point, which has already undergone an apartment boom.Credit:Wolter Peeters

Labor seized on the delays to the special infrastructure contribution as further evidence that the government has shelved the nine-kilometre second stage of the line.

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The party's transport spokesman, Chris Minns, said the government had been "ducking and weaving" on its commitment to build the second stage because it did want to admit that it was not funded.

"If the government can’t fund the project, then they can’t build it and they must start being honest with residents and businesses along the route who thought they were getting light rail," he said.

Transport Minister Andrew Constance returned fire at his Labor rival, telling Mr Minns to travel to Parramatta to see work had already started on building the line.

However, he conceded earlier this month that the government did not have a timeframe for the start of construction of the second stage, saying its focus was on the first part of the project.

Although the government has allocated funds for the entire $2.4 billion cost of the first stage, it has yet to reveal what the second stage is set to cost and how it intends to pay for it. So far, it has spent $20 million on the second stage, and allocated just $2 million this financial year.

Leaked planning documents originally put the total cost of the entire project at more than $3.5 billion, which was to be built in one fell swoop from Westmead as far east as Strathfield. However, the government later decided to build it in two stages and only as far as Olympic Park.

The state's planning department confirmed that the government has not collected any contributions from a special levy to date.

An artist's impression of the first stage of the Parramatta light rail line.

An artist's impression of the first stage of the Parramatta light rail line.Credit:Transport for NSW

A draft plan for a levy was being developed last year but the project was "placed on hold" to allow for the completion of a plan to match housing and jobs with the delivery of infrastructure for greater Parramatta and the Olympic Park precinct.

NSW Planning said the special levy project would be "reinstated pending the outcomes" of the so-called infrastructure compact and a review of priorities for precincts within the department.

The Sydney Olympic Park Business Association said the government was "looking a gift horse in the mouth" by failing to put in place a levy to help fund the light rail project.

"Walking away from a special infrastructure contribution levy it announced but hasn’t collected is only making the future of stage two more unlikely,” chief executive Allison Taylor said.

Under initial plans for the line in 2015, the Coalition government expected a levy of about $200 per square metre to be imposed on new residential developments along the light rail corridor. It equates to about $20,000 on a standard 100-square-metre apartment.

Property developer group Urban Taskforce said the government could have already missed out on collecting between $40 million and $80 million along the Parramatta light rail corridor given the thousands of apartments built along it or approved over the past four years.

"The government has to be a lot faster and convincing about how they are going to do these kind of things,"Urban Taskforce chief executive Chris Johnson said.

"The reality on the ground is that nothing seems to have eventuated [with a levy for the light rail]. There will certainly have been thousands of apartments that would have been approved or built that may have missed the cut [for the government to levy]."

While building approvals in greater Parramatta remained strong, Mr Johnson said the government had "missed the boom" in residential construction in Sydney, which was the best time for it to consider imposing levies to help pay for transport projects.

While there is greater community appetite for special levies to fund infrastructure than raising general taxation, a survey in a report by Infrastructure Australia this month showed that public support for them is still relatively low at 30 per cent.

Matt O'Sullivan is the Transport Reporter for The Sydney Morning Herald.

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