According to a recent Telegraph article a cabinet decision is due this coming week. In my opinion, this idea is purely ideologically based. Currently, the bus services in the region have flows in both directions in both peaks. This system will take out the counter peak flows on the 891 and 895 bus services while leaving the peak direction flows largely on buses. This may be different with fare integration as you could carve out the via Central bits of bus routes 339, 374, 376, 391 and remove the 372, 393 and 395 services. However, most of the advantages could be had with just fare integration. Why is it being seriously considered? Mostly because the 891 doesn't really achieve. I proposed a number of solutions to that here. Indeed, it's not necessarily clear that the trams will solve the problem.
According to this SMH article, this is yet to be approved by cabinet. From the article:
"A spokesman for Action for Public Transport, Jim Donovan, said he
had been told by a senior public transport bureaucrat that a proposal to
integrate fares in Sydney had been put to the cabinet but not yet
This is absurd and unacceptable, and should be a major focus for fixing transport in Sydney but it isn't.