https://www.smh.com.au/national/nsw/sydney-metro-hit-with-200m-bill-for-prime-parramatta-cbd-land-20240324-p5feqy.html
Sydney Metro has been ordered to pay $201 million to Parramatta City Council for a prime CBD spot for its planned underground station – almost double its $116 million offer – in the latest fight over fair compensation for land acquired for the multibillion-dollar project.
The council sought $312 million for the prized land after it was compulsorily acquired in March 2021 for the Metro West rail line https://www.smh.com.au/link/follow-20170101-p5fbuz between Parramatta and the Sydney CBD. It filed proceedings against Sydney Metro in 2022, objecting to the amount of compensation it was offered.
An artist’s impression of the proposed Parramatta metro station in the CBD.
An artist’s impression of the proposed Parramatta metro station in the CBD.Credit: NSW government
In a decision last week https://www.caselaw.nsw.gov.au/decision/18e5f00c9bb1a7f9aafd3db0, the NSW Land and Environment Court ruled the council was entitled to $201,417,049 for the land bounded by George, Macquarie, Church and Smith streets. Sydney Metro had paid the council $11.5 million for a smaller adjoining parcel of land in May 2022.
Premier Chris Minns said the extra money that would have to be stumped up for the property would not result in an increase in the overall cost of Metro West or delay the line’s 2032 opening because it was within project contingencies.
“It’s an enormous amount of money. But when you look at a project that extends over a 10-year lifespan and costs $26 billion, we do anticipate … there is going to be the opportunity for fluctuations in the eventual sale price [of land],” he said in Sydney on Sunday.
Minns said it was not in the government’s interests to be “lowballing” Parramatta Council if it had a genuine case because it had obligations to ratepayers just as he had to the state’s taxpayers.
In his written judgment, Justice John Robson said Sydney Metro had contended for $116 million in compensation – $196 million less than the council’s claim of $312 million.
An aerial map of the irregularly shaped land compulsorily acquired by Sydney Metro for the Parramatta metro station.
An aerial map of the irregularly shaped land compulsorily acquired by Sydney Metro for the Parramatta metro station.Credit: NSW Land and Environment Court
The fight over compensation for the Parramatta land is just one of a number of battles waged with Sydney Metro https://www.smh.com.au/link/follow-20170101-p5feba by landowners, including small businesses, over exactly what constitutes “just terms”.
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The principles governing compensation for compulsorily acquired land are set out https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1991-022#sec.54 in the Land Acquisition (Just Terms Compensation) Act. A range of factors must be taken into account, including the market value of the land and loss attributable to disturbance.
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Market value is defined as “the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer”. It does not include any increase or decrease in value caused by carrying out the works for which the land was acquired.
The irregularly shaped land in the heart of the Parramatta CBD includes the site of a former multilevel car park. When assessing market value, the court considers the “highest and best use” of the land, which in this case was a redevelopment including two commercial towers.
Confidential Sydney Metro documents dated mid-2020 have estimated the cost of constructing the Parramatta station at $379 million, compared with $365 million for the Olympic Park station.
Parramatta’s Labor lord mayor Pierre Esber declined to comment on Sunday because he said the decision could be appealed by Sydney Metro.
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However, Parramatta Labor MP Donna Davis said valuations for the property were conducted under the previous Coalition government and the council had been well within its right to question Sydney Metro’s offer.
Davis, a former Parramatta lord mayor, said the case was a “good learning” for Sydney Metro in ensuring that offers for land acquired for rail projects reflected the fair value of properties.
Sydney Metro has spent more than $2 billion acquiring more than 500 properties in the past three years for the Metro West rail project https://www.smh.com.au/link/follow-20170101-p5eg13 and other new driverless train lines in the city.
According to the NSW auditor-general, the agency had contingent liabilities of $1.3 billion at the end of last June due to compulsory property acquisitions under legal dispute where claims differ from the valuer-general’s determined compensation amounts.