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THE Premier and his Transport minister have defended cabinet's choice for a new light rail route through Newcastle, while acknowledging the needs of commuters weren't the only factor behind its decision.
But Mike Baird has labelled as "conspiracies" claims the route was selected to favour the interests of the developers.
The infrastructure subcommittee of cabinet signed off last year on a "hybrid" option that would mean the light rail traverses part of the existing heavy rail corridor, which will be truncated, then switches into Hunter Street and Scott Street.
The route opens up parts of the corridor and land near Newcastle railway station to potential development, and was estimated to cost about $100 million more than running the light rail entirely down the existing corridor, as Transport for NSW had recommended.
Using Hunter Street would create traffic delays and lead to the loss of parking, a leaked cabinet document also shows.
On Tuesday, Mr Baird said he had "heard all the conspiracies" about the government's plans for the corridor but that the city's best interests were behind the choice of route.
Government-owned development agency UrbanGrowth had input into the process, he acknowledged, but so too had the community.
"As we weighed it up the sense was, this is the best route that connected the city, in terms of urban renewal, to the harbour foreshore and the connection back into the city and the retail precinct," Mr Baird said, after officially opening a new conference centre at the Crowne Plaza in the Hunter Valley.
Minister for Transport and the Hunter Gladys Berejiklian also acknowledged the decision was not based alone on the needs of public transport passengers.
"The question we asked ourselves as a government is what is the best way to revitalise Newcastle," she said.
"That includes having a fantastic transport system but it also includes how do you open up the city in the best way."
Labor has claimed the decision is a sop to developers, such as former Lord Mayor and developer Jeff McCloy who was at the centre of the state corruption watchdog's inquiry into illegal donations to Liberal MPs, including $10,000 he gave to former Newcastle MP Tim Owen for his 2011 campaign.
Mr McCloy had publicly advocated for a light rail route that would run entirely down Hunter Street and through its mall, which the government's chosen route does not do.
Asked if she discussed the route options with Mr McCloy, Ms Berejiklian said ; "I'm not going to get into the ins and outs across government, all I want to say is that as a government we did what is in the best interests of the community".
"I do not know who and what meets were held- all I can tell you as the Minister for Transport and Minister for the Hunter is when we took those decisions we asked ourselves what is in the best interests of Newcatsle," Ms Berejiklian said.
The government has unveiled concept proposals for some residential or commercial development on parts of the rail corridor.
UrbanGrowth is also drawing up a detailed plan for the land that won't be released until after the election.
The Premier said that would offer "just ideas" and Newcastle City Council would have the final say on what occurred with the corridor land.
"I just want the innuendo, the scare campaigns to end because the is nothing to fear. That corridor is up to the community to decide," he said.
Mr Baird also outlined some of the Hunter road projects that would be funded using $273 million from the expected proceeds of the government's proposed lease of the poles and wires.
He said Labor couldn't be trusted to deliver infrastructure in regions such as the Hunter, given its poor track record in office.
"Our plan makes sense and not only makes sense, it is he only way to build infrastructure within the constraints of the triple-A credit rating," Mr Baird said.