Infrastructure Australia says work on the $4.5 billion Great Western Highway will be more costly than beneficial to taxpayers. 

Infrastructure Australia has evaluated the business case for the proposed highway upgrade linking Sydney and western New South Wales, focusing on the eastern and western sections of the Great Western Highway between Katoomba and Lithgow. 

It found the cost outweighed the benefits of building two dual carriageways between Lithgow and Little Hartley and Blackheath and Katoomba, leading to a net loss of $579.5 million.

“Based on the evidence provided in the business case, the costs of the east and west sections will exceed the benefits,” the report said. 

But Infrastructure Australia also said the project would improve travel reliability and local amenity. 

“However, the largest economic benefit is derived from avoided routine maintenance of the existing road,” it said. 

The federal body warned that the cost of the upgrade could continue to rise due to the availability of materials and labour, as well as the required biodiversity and Aboriginal heritage offsets.

“Delivering the project within the approved funding envelope, addressing community stakeholder feedback and meeting environmental approval conditions are key delivery risks,” Infrastructure Australia said. 

The plans include an 11-kilometre tunnel to link the dual carriageways, but this part of the project is yet to be funded.

“A significant proportion of the whole-of-program travel time savings and freight vehicle operating cost savings depend on delivery of the central section, which is still in development,” the report said. 

The NSW Government last week announced it would pause work on the upgrade after the federal government did not allocate further funding in the latest budget.