THE Federal Government has told NSW not to bother asking for funds for the $12 billion North West Metro project because there are no federal Labor votes in it.
The Prime Minister, Kevin Rudd, and the Treasurer, Wayne Swan, told a meeting in February involving the former premier, Morris Iemma, and senior state bureaucrats that they were not interested in the rail project because Labor had no marginal seats in the area it would service, senior NSW sources said.
The revelation comes as Mr Rudd is scheduled to deliver a speech in Brisbane today in which he will stress that decisions on financing projects out of the $20 billion Building Australia fund will be made on merit.
Canberra's reluctance to advance funds could effectively kill off or severely delay the metro project. The State Government has been noticeably silent on the prospects for federal funding for the scheme since February, despite Mr Rudd making it clear Canberra is keen to make the $20 billion in infrastructure money available to the states.
Mr Iemma announced details of the metro plan in March without discussing federal funding. His successor, Nathan Rees, has left the metro off NSW's wish list of four transport "priorities" it has sent to Infrastructure Australia for Commonwealth funding.
The top priorities, released by Mr Rees's office yesterday, are the West Metro, at an estimated cost of $10 billion, and the M4 extension, at $5.5 billion.
The second priority list contains the M4 port/airport link extension ($3.6 billion) and the M5 expansion ($2 billion). Next comes the Northern Sydney Freight Corridor ($3.1 billion) and the F3 to M2 link ($4.1 billion).
The fourth list contains the F3 to Branxton corridor ($1.3 billion), a Pacific Highway upgrade ($9.6 billion) and Princes Highway improvements ($1.2 billion).
Mr Rees has repeatedly refused to guarantee the future of the North West Metro since becoming Premier on September 5. With a cost-cutting mini-budget due on November 11, he has made it clear his Government is intent on winding back infrastructure plans.
State sources have told the Herald that Mr Rudd and Mr Swan were "very cool" in the February meeting on the idea of a North West Metro. The meeting was to set the parameters on what the NSW Government would ask for.
One of those at the February meeting said: "Swan came in and had the same arguments as our Treasury - [he said] there's no real [population in the north-west] yet … surely the main western line is [more pressing]."
Another source said Mr Swan had made it clear there were "no votes" in the north-west.
"The Prime Minister's obsession was with the south-west and the M5 corridor," a State Government source said of the meeting.
Last night Mr Rudd's office referred the Herald to the Infrastructure Minister, Anthony Albanese, who denied marginal seat considerations had any bearing on the Rudd Government's decision on which projects it would give priority to. "It's just a lie," he said. Asked why NSW had not included the North West Metro on its wish list, he said: "I have no idea. You'd have to ask them. I haven't seen the list, mate. It's their list, not mine. Infrastructure Australia will be making objective criteria [for approving projects]. I know that's hard for you to [accept]."
A spokesman for Mr Rees, Alex Cramb, said the North West Metro was not included because the State Government had already announced it was going ahead with the project in March, when it said it and the private sector would fund it.
"The North West Metro is excluded from that in the first round because it's deemed to be fully funded by the Government," he said.
"That hasn't changed yet because at the moment the budget process isn't complete.
"It doesn't spell the end of the North West Metro except to say it's still part of the mini-budget process."
