The Cross City Tunnel would divert traffic from gridlocked streets and link the posh eastern suburbs with Darling Harbour, an entertainment precinct and a gateway to western Sydney.

The 2km tunnel cost A$800 million (HK$4.8 billion) and opened to great fanfare in August 2005.

But 18 months on it is in deep trouble, mired in political controversy and financial crisis, a public relations disaster.

A week ago it was declared officially broke, with debts of about A$560 million, and became Australia's first fully privatised infrastructure project to go into receivership.

Investors include Hong Kong billionaire Li Ka-shing, who put in A$100 million through his company Cheung Kong Infrastructure.

An engineering marvel which was completed ahead of schedule, the tunnel failed to live up to expectations. Traffic projections proved to be wildly optimistic. Instead of carrying an expected 90,000 cars a day, it has struggled to attract a third of that.

Despite the fact that it slashes the time it takes to cross the city centre, Sydneysiders vetoed the tunnel in what amounted to a grass-roots revolt and a potent demonstration of people power.

They were incensed by the high cost of using it - A$3.50 per trip - and by the fact that surrounding streets were blocked off in order to funnel traffic underground.

'It was disgraceful that they closed all those roads,' said Jamie Keys, 24, a plumber who criss-crosses the city every day.

'My boss picks up the tab but if he wasn't paying there's no way I'd use it. They've made a mess of the whole thing.'

The receivers, KordaMentha, are refusing to divulge anything beyond what they said in a press release.

They hope to revive the business and sell it within 18 months.

'It is year two of a 35-year project and we believe that the tunnel can ultimately be successful,' spokesman Martin Madden said.

To be fair, the tunnel has its fans. For drivers who don't mind paying the hefty toll, it is a boon.

'I absolutely love it,' said Paul Wenck, 40, a marketing executive who lives in the eastern suburb of Woollahra.

'If I want to go to Darling Harbour it takes about six minutes door to door. If you have kids and you want to go to the Aquarium or Sydney Wildlife World, it's brilliant. Conversely, for people in Balmain who want to go to the beach, it's a no-brainer.'

Most Sydneysiders see the tunnel is a symbol of government greed, official incompetence and corporate connivance.

Its bankruptcy may be hailed as a victory by angry motorists, but it's a defeat in the battle against Sydney's traffic congestion.