Sydney's Cross City Tunnel Standoff

An interesting situation.

On one side you have the government, under political pressure to do something, but knowing that the Tunnel Consortium is bleeding financially. Up to $5 million per month, by one estimate.

On the other side, the consortium knows that the government is on the nose with the voters, and an election is only a year away.

Both sides are under stress. The question is, "Who will blink first?"

The government hopes the consortium's creditors will not put up with the losses for too long and force tunnel management to lower the toll to under $3, in the vain hope that this will increase patronage.

The consortium hopes that political pressure will cause a cave in similar to that over the M4 and M5 tolls many years ago. To shore up western suburb seats, the government introduced a cash back scheme to subsidise motorway users.

It comes down to who can wait the longest.

Knowing the political imperative, and how governments react when under threat, my money's with the Tunnel Consortium. They don't have an election looming.