NEWCASTLE will get light rail in its inner city in return for the Port of Newcastle being handed over to the private sector, the O’Farrell government has announced in its latest budget handed down on Tuesday.
The government will use $340million to replace heavy rail with light rail from Wickham to Newcastle, from the proceeds of a proposed 99-year lease of the Port that Treasurer Mike Baird said could reap about $700million.
The $340million would come on top of the $120million the government has already committed to spending on rail changes in the inner city, including the construction of a transport interchange at Wickham.
And the light rail strip could be the start of a broader system, with $10million to be spent exploring the potential to link the city centre to surrounding suburbs, beaches and broader region.
‘‘This will now go beyond a mere revitalisation: it will effectively be the rebirth of Newcastle as a modern city,’’ Mr Baird said.
The proposal forms the budget’s centrepiece infrastructure announcement.
A scoping study for the port transaction would get underway immediately.
The government is aiming to complete the lease by mid next year.
It follows the recent lease of both Ports Botany and Kembla, which were announced in previous budgets and raised about $4billion net for infrastructure spending.
Overall, Mr Baird has forecast a deficit of $329million in 2013-14, with a return to surplus expected in 2014-15, in a budget he says will ‘‘secure the future for NSW’’.
It confirms the provision of $585million for the rollout of the National Disability Insurance Scheme in the Hunter.
The budget also provides for up to $120million this year for the Resources for Regions program, which is aimed at returning some of the proceeds of mining to affected communities.
About $40million would be allocated to successful applications made before June 11, with $80million available for those who make applications before October.
Singleton and Muswellbrook are among the councils to have already made applications and will need to wait to learn if they will get a share of the money.
Newcastle City Council was also eligible but did not submit an application. It may have another
The budget also delivers more money for the Newcastle justice precinct, with a further $63million for its construction.
The government has also continued its housing acceleration fund, with two Hunter sites included in the initiative this year.
Wastewater network upgrades at Farley and Rutherford will be fast-tracked to help pave the way for the construction of 5300 new homes, and an intersection on the New England Highway at Lochinvar and its water mains will be upgraded to enable 5000 new homes to go ahead.
But the budget is silent on allocations for the remainder of the Hunter Infrastructure and Investment Fund. The fund’s board had made recommendations to the government earlier this year on how to spend the $60 million remaining of the $350 million election commitment.
The budget papers say the government is considering the board’s recommendations.