The Federal Government's $3.5 billion pledge to Sydney's WestConnex project has been criticised.

The Australian National Audit Office has found the scheme was not properly assessed ahead of the funding being released for the 33-kilometre motorway network.

The $16.8 billion WestConnex project remains mired in controversy and opposition, but it still due to be completed in 2023.

Auditor-General Grant Hehir says “the established processes to assess its merits of nationally significant infrastructure investments” were not followed.

The auditors also found the Department of Infrastructure and Regional Development admitted that a 2014 funding package of $500 million was “of a magnitude not yet required”.

The audit found evidence that the $500 million loan led the Federal Government to approve the larger loan despite no analysis on whether statutory funding requirements had been met.

A big chunk of the federal funding for WestConnex will come in the form of a $2 billion concessional loan to the NSW Government.

For this loan, the audit office say the Federal Government should have received more comprehensive departmental advice.

It also criticised the low interest rate of 3.36 per cent per annum, saying the Federal Government was effectively robbing itself of $640 million.

Opposition infrastructure spokesperson Anthony Albanese said the Turnbull Government was going back on itself, “by ripping up its own policy that it took to the 2013 election, saying that they would have proper planning and approval by Infrastructure Australia for any project of value above $100 million”.

Minister for Urban Development, Paul Fletcher, said the audotirs ignored the good parts of the plan.

“This report had nothing to say about the substantial merits of the project,” he said.

“It has one recommendation which is about the Department of Infrastructure and Regional Development making some changes to its processes in the way it provides advice to ministers. That's a sensible recommendation and of course the department will be accepting it.”