The Upper House committee was investigating the impact of the Western Harbour Tunnel and Beaches Link, and delivered its findings on Monday.
In the case of the Beaches Link tunnel it found the government had failed to consider public transport as a viable alternative to motorways.
"The government has not provided a business case or benefit-cost ratio, and the community is understandably sceptical of Beaches Link's value," committee chair, Labor MP Daniel Mookhey said.
"The committee recommends the government not proceed with Beaches Link."
Concerns were also raised over the Western Harbour Tunnel for which site preparations have already began.
The projects aim to connect motorists directly from the Northern Beaches at Balgowlah to Rozelle in the Inner West, and would include tunnels under both Sydney Harbour and Middle Harbour to the north.
The report noted that an abandoned 'development partner model' resulted in substantial compensation payouts being paid to three companies that bid to work on the Western Harbour Tunnel project, capped at $1 million each.
Recommendations were made regarding transparency and impact on air and water quality, taking into account the considerable impact the tunnels would have on communities in the Inner West, Lower North Shore and Northern Beaches.
Of 575 public submissions received by the committee the overwhelming majority were opposed to the projects.
"These are large projects, with large price tags, and significant impact on communities they interact with," Mr Mookhey said.
"The committee makes various recommendations to improve transparency around the projects, noting the importance of properly informing the public ahead of the March 2023 election."
The government is due to deliver a response to the report before 6 March, 2023.
Metropolitan Roads Minister Natalie Ward has been contacted for comment.
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