Toll roads operator Transurban says it has made good progress in its talks with the NSW government on a $2.65 billion tunnel proposal for Sydney's north.
The proposed project would be a tolled motorway linking the M1 Pacific Motorway, formerly the F3 freeway, at Wahroonga to the M2 toll road at West Pennant Hills.
The project involves the construction of new eight kilometre tunnel, which would be the longest tunnel of its kind in Australia.
"We have made significant progress in our discussions with the NSW government to develop the new F3-M2 link," Transurban chairman Lindsay Maxsted told Transurban's annual general meeting on Thursday.
Mr Maxsted said agreement had been reached on the basic funding sources for the project, and the parties were working through the third and final phase of the government's unsolicited proposal framework.
"If successful, this will be a transformative project for the northern section of the Sydney orbital network, with capital investment in the construction effort alone of up to $2.65 billion," Mr Maxsted said.
Transurban said in August that it is hoping for a financial close to the project in late calendar 2014.
Transurban chief executive Scott Charlton said the project would be one of the largest single investments on the Australian road network in the past decade.
If Transurban gets approval to build the new link, it will own about 50 per cent of the project.
Transurban completed an upgrade of its M2 on July 31.
It also owns Sydney's Lane Cove Tunnel and Melbourne's CityLink, and holds interests in Sydney's M7 and M5.
Transurban securities were up six cents at $7.05 at 1146 AEDT.
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