Construction of motorway to Sydney’s new airport hits financial bumps – again (2025)

The cost of major contracts for a motorway to Sydney’s new international airport has surged again, this time by $152 million, piling financial pressure on the project jointly funded by the federal and state governments.

Tender documents show the estimated cost of the western section of the M12 motorway has risen by $78 million to $659 million, and the central part by $47 million to $510 million. In addition, two contracts for design work by consultants have almost doubled to $68 million.

The increases to the main construction contracts are on top of almost $90 million in extra project costs reported by the Herald early last year.

Despite the increases, Transport for NSW said there were sufficient allowances for escalation and changes within the $2.1 billion budget.

“At this stage, there is no cost overrun,” the agency said in a statement. “The M12 motorway remains on budget and all funding matters are resolved.”

Greens transport spokeswoman Cate Faehrmann said the government did not question forking out millions of dollars more when costs inevitably blew out for new motorways, yet baulked at providing reliable public transport services for south-west Sydney.

“The public needs to be reassured that the highest level of scrutiny is being applied to these massive contracts by the government, particularly when costs are regularly revised upwards at a tune of millions of dollars at a time,” she said.

The bill for construction of the 16-kilometre motorway to Western Sydney Airport has steadily risen – mostly under the previous Coalition government – since late last decade when it was budgeted at $1.25 billion.

In 2019, the cost of acquiring properties was cited as a major reason for the budget rising to $1.8 billion, while two years later design changes pushed it to $2.1 billion.

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The M12 will connect the M7 at Cecil Hills to The Northern Road at Luddenham and provide motorists direct access to the new international airport, which is about 50 kilometres from the Sydney CBD.

Transport for NSW said two-thirds of the motorway construction would be completed later this year, while the eastern end would be finished in early 2026.

“[The] M12 motorway from The Northern Road to M7 Motorway is planned to be open prior to the Western Sydney International Airport opening in 2026,” the agency said.

Last month, senior transport officials told a budget estimates hearing that the M12 would be opened in a “staged manner”, possibly earlier than next year.

The federal government is covering 80 per cent of the cost of the motorway, while the state is paying the rest and delivering the project.

The toll-free motorway will have two lanes in each direction and comprise 17 bridges, the longest of which is a 700-metre span over South Creek. Once open, up to 30,000 vehicles a day are forecast to travel along the M12.

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