TAHE estimates it could turn over $1.9 billion a year in revenue if it develops and leases property. Alternatively, it could generate $40 billion if it develops and sells “transport assets”.

“Potential property development can realise significant value windfalls for government,” the business plan states.

Shadow treasurer Daniel Mookhey said the only reason the government was scheming to turn TAHE into a giant property developer was to plug a multibillion-dollar hole it was burning in the budget.

“If TAHE wasn’t a financial disaster, it wouldn’t have to auction $40 billion of the public’s transport assets,” he said. “Secretly plotting to build a hotel above Central Station shouldn’t be TAHE’s core business. Its job is to manage our railways safely.”

A Treasury spokesperson said both Treasurer Matt Kean and Finance Minister Damien Tudehope had endorsed TAHE’s 2021-22 statement of corporate intent, which summarised its planning and business strategy.

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A TAHE spokesperson said it had prepared a property strategy focused on safety and sustainability to deliver long-term, low-risk commercial return.

“This is not unusual for similar state-owned corporations and infrastructure agencies across the world and is in line with standard business practice.

“One of our five legislated aims is to deliver positive commercial outcomes for NSW taxpayers. As a result, the TAHE board has explored a range of options across our portfolio.”

TAHE denied it had plans to operate hotels and said there was no intention of increasing rent for tenants.

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An insider, who requested anonymity, said the business plan revealed a mad scramble to make TAHE stack up. “What we are seeing outlined in this document are increasingly outlandish strategies to effectively turn lead into gold,” the insider said. “But it’s also high risk.”

TAHE’s business plan forecasts a “revenue uplift” by increasing retail spaces and “improving tenant selection”.

It outlines the potential for a $610 million real estate redevelopment of a precinct in and around Parramatta station, which it estimates has a “gross realisation of $1.1 billion”.

The plan cites a “massive shortage of supply” in Parramatta, partly due to the government moving more offices there. However, it lists among the risks relocating a bus layover and a “potentially complex station integration”.

A similar development at Hurstville is estimated at $200 million.

The business plan says the “optimal model” for TAHE should be to “engage and partner with developers to de-risk delivery and capitalise returns”.

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