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The government of New South Wales, an Australian state in the south-east of the country, is selling a 51% stake in Sydney Motorway Corporation (SMC). The corporation is responsible for managing the development, construction, funding, operation and maintenance of WestConnex, a programme of projects that aims to develop and upgrade road access in the south-west of Sydney, valued at AUD16.8 billion (US$13.1 billion).

The competition to acquire the stake is fierce. Although no bids have been officially disclosed, companies that are reportedly interested include ACS, Ferrovial, Macquarie, Transurban, IFM Investors, Australian Super and La Caisse de dépôt et placement du Québec. The 51% stake is valued at around EUR5 billion (US$3.9 billion).

Preliminary bids were due on 26 February. Australian authorities will choose the proponents to submit final bids in April, with those bids being due in June.

It has been reported that ACS and Ferrovial have been in negotiations to form consortiums with international investment funds to bid for the stake for months. It is thought that Transurban, Australian Super, the Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority are working in consortium.

Whoever successfully acquires the stake will take responsibility for three projects in development and two in operation. The widening of 7.5 km of existing M4 motorway, in western Sydney, was completed in 2017, with tolls commencing in August. A new interchange on the M5 motorway was opened to traffic in late 2016 and completed in 2017. 

The projects in development are:

• 6.5km extension of the M4 via twin motorway tunnels from Homebush to Haberfield with three lanes in each direction, which will connect to the widened M4. It is expected to be completed in 2019. The project value is AUD3.8 billion (US$2.96 billion).
• Construction of 9km twin motorway tunnels to duplicate the M5 East between Kingsgrove and St Peters. Completion is scheduled for 2020, with the estimated value being AUD4.3 billion (US$3.38 billion).
• M4-M5 link: tunnels connecting the M4 East at Haberfield to the new M5 at St Peters via Rozelle and Camperdown, and an underground tunnel from the Rozelle Interchange to Iron Cove Bridge. Valued at AUD7.2 billion (US$5.64 billion), this project is currently in planning. Construction is expected to commence this year, with the road opening to traffic in 2023.

The government of New South Wales will retain the remaining 49% stake in WestConnex until it is completed in entirety.