THE state government faces a judgment call over whether to build a light rail tunnel under Surry Hills or a cheaper but slower surface link between the eastern suburbs and the city.
The Herald has been told transport planners working on the city's light rail expansion expect the tunnel option to be about seven minutes faster for commuters travelling through Surry Hills.
That would be a significant advantage in travel time for anyone using the line to get between Central Station and Anzac Parade and Randwick.
But the faster route would be offset by a significantly higher cost. The tunnel to the eastern suburbs could cost about $100 million, sources said.
This would contradict the ethos of light rail as a relatively cheap and simple improvement to transport in the eastern suburbs.
It would also make it harder for people in Surry Hills to use light rail. The suburb would in effect be bypassed unless expensive underground stops were built.
The Premier, Barry O'Farrell, has said he would expect to start work on another light rail expansion project in this term of Parliament. His government has already released a list of preferred routes for tram lines through the city centre, to the eastern suburbs and around Sydney University.
The city-centre route would run down George Street. An eastern suburbs route would run down Anzac Parade and link to Central Station either underground or above ground through Devonshire Street or another Surry Hills street.
Engineers working for the Transport for NSW project team are looking at the feasibility of the tunnel or surface routes. The government has told industry it expected to finalise a light rail expansion plan by the middle of this year.
A spokeswoman for the City of Sydney said it was too early to assess the technical and transport aspects of linking Anzac Parade to Central Station by light rail.
''The city welcomes the prospect of a light rail link to the University of NSW, and will work closely with the NSW government to ensure the project benefits both the local community along the route and the future patrons of the light rail,'' the spokeswoman said.
The mayor of Randwick, Scott Nash, said: ''A tunnel option, while more expensive, would provide a much faster link, which would be welcome news for University of NSW students, Randwick commuters and tens of thousands of cricket and footy fans.''
