THE Federal Government has agreed to "quarantine" the $3.56 billion it allocated to the Pacific Highway in last month's Federal Budget.
Federal Transport Minister Anthony Albanese met with key independent MP Rob Oakeshott on Thursday night, where it was agreed the money would be used only for completing the highway's duplication.
There were fears up to $2 billion of the highway allocation would be redirected to other infrastructure projects after the State Government on Tuesday allocated only $1.5 billion to completing the highway upgrade by 2016.
The Federal Government allocated $3.56 billion on the basis it was matched dollar-for-dollar by the state.
Mr Oakeshott said that with the federal money protected it was now up to the state to act.
"The missing factor in all of this though is now what is the commitment from NSW?" he said.
"They control the work schedule and the completion.
"It's one thing to quarantine money, and a record amount, but that doesn't mean much if it's over a 10- or 20-year works plan."
Mr Oakeshott said he had staked all his "political chips" in helping to secure the record highway funding in last month's budget, adding it was now up to Premier Barry O'Farrell and Roads Minister Duncan Gay to clarify whether completing the upgrade was the state's "number one trans- port priority".
"If they're not treating this road as a priority, I can't get the Commonwealth to, but if they're treating it as a priority, then I've got the Commonwealth in a position where they are willing to play," he said.
"And that's the frustration; I'm now confused as to where NSW views its own road on its list of transport priorities.
"If you were to look at this state budget you would say the Pacific Hwy is, maybe the fifth transport priority for NSW behind projects that are in dispute with Canberra and even in dispute with their own infrastructure planners."
Mr Oakeshott was referring to Sydney's north-west rail link, which attracted a budget allocation of $3.3 billion over the next four years.
A spokesman for Mr Gay said "in terms of highways" the Pacific Hwy was the O'Farrell Government's number-one priority.
"But how dare Mr Oakeshott ask if the Pacific Highway is our priority when it clearly is not his, as he supported the Federal Government ripping $2.31 billion out of its funding for the Pacific Hwy," the spokesman said.
Mr Oakeshott described the debate over the federal-state funding split as a "head wreck", claiming Coalition MPs were plucking numbers "out of the air".