The state government's independent infrastructure body, Infrastructure NSW, released its report "State Infrastructure Strategy 2022-2042: Staying Ahead" (the Report) on 31 May 2022. Among other things, the Report has recommended "the focus on megaprojects should give way to a combination of smaller and medium-sized projects," as they are likely to provide "high returns and faster paybacks with less budget and delivery risks".

Having said that, the Report acknowledged the long-term benefit of those megaprojects but pointed out that it would be "especially challenging to deliver additional megaprojects in a cost-efficient manner in coming years" due to the complexity of those megaprojects and the impact of COVID-19 and other world events on the construction industry's capacity, supply chains and skills. As such, any future megaprojects will need to be delivered in a "sensibly prioritised and sequenced manner".

To that end, the Report has recommended the state government reconsider the timing and sequence of megaprojects that are not yet in procurement, including the Beaches Link, the Parramatta Light Rail Stage 2, the M6 Motorway Stage 2, the central tunnel for the Great Western Highway Katoomba to Lithgow upgrade and future major Sydney Metro or Rail Project (Sydney CBD to Zetland, Western Sydney International Airport to Leppington or Campbelltown), and major regional dam projects (NSW Dungowan and Wyangala).

Despite the initial position that the NSW government would delay megaprojects worth up to AU$20 billion,1 the NSW government has since decided to push ahead with the Parramatta Light Rail Stage 2 given the rapid growth in Parramatta and the western region.2 According to the Report, the megaproject of Warragamba Dam Wall Raising will also proceed as planned due to its importance in providing flood mitigation to a large and vulnerable area of Sydney. Further exceptions could potentially be announced depending on the merits.