A consortium headed by toll road operator Transurban has agreed to pay the NSW government $9.3 billion for a 51 per cent stake in the new WestConnex motorway.
Sydney Transport Partners, a consortium led by Transurban, will now fund the M4-M5 link and the final stage of WestConnex.
The ASX-listed toll road giant beat a rival bid from IFM, an Australian investment management company and will now will be allowed to toll motorists for the next 42 years under the deal.
The road extends 33 kilometres from Parramatta to the South Western Motorway mostly via tunnels under the inner suburbs.
It is understood Transurban will use distance based tolling to a maximum of $8.95, with prices starting at $1.27, then 47 cents per kilometre.
The Australian Competition and Consumer Commission was initially hesitant about Transurban's bid amid monopoly concerns.
Transurban already has the competition watchdog's permission to proceed despite controlling seven of Sydney's nine existing toll roads and 15 of the 19 toll roads in Australia.
The ACCC decided to approve the bid after the company agreed to publish traffic data that could help rivals bid for future toll road projects and potentially give taxpayers and motorists a better deal.
“The undertaking addresses a key aspect of the incumbency advantages currently enjoyed by Transurban, which is access to data.” ACCC chair Rod Sims said.
“This was a major exercise for the ACCC. We undertook extensive investigations, examining documents of numerous parties, interviewing parties, and examining executives under oath.”
The NSW government will retain a 49 per cent interest in the motorway, which has been described by NSW Treasurer Dominic Perrottet as the “city's largest transport project since the Sydney Harbour Bridge was completed in 1932.”
“WestConnex is a critical component of the NSW government's long-term, transport and planning solution and is strategically significant for Sydney Transport Partners,” Transurban chief executive Scott Charlton said.
The deal is expected to complete in September, subject to Foreign Investment Review Board approval.
The motorway is scheduled to open in its entirety by 2023.