The owner and operator of Sydney's Lane Cove Tunnel and associated tolled ramps, Connector Motorways Pty. Ltd., was placed in receivership last week.

The receivers and managers said they would look at what options for the tunnel's future existed, including a sale.

The Lane Cove Tunnel is a 3.6km tolled twin-tunnel that links the M2 Motorway at North Ryde with the Gore Hill Freeway at Artarmon.

The tunnel and ramps opened in March 2007. The tunnel cost $1100 million to build, but the total investment in the project has been estimated to be $1800 million. Connector has the right to collect tolls until the year 2037.

The receivers said that patronage had increased by almost nine per cent over the past 12 months to December 2009.

The tunnel and ramps will continue to operate as usual.

Traffic volumes in the tunnel, at about 60,000 vehicles a day, are only half the forecast estimates.

It has been speculated that lenders to the project could lose up to half their loans. The original investors have now written off all the money they injected into the project.

"I forecast the collapse of Sydney's Cross City Tunnel and the Lane Cove Tunnel five years ago," Dr John Goldberg at Sydney University's architecture faculty said.

Dr Goldberg argues the financial models that were the basis for getting tunnel projects approved, cited unrealistic traffic projections and employed creative accounting.

"Not only do the models specify unattainable rates of return to investors but the true financial position of the projects is being masked by financial engineering," he said.

Source: The Sydney Morning Herald and AAP