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East-West road link

Dangerous Beans's picture
#1

I'm loving this:
(url)http://www.theage.com.au/victoria/auditor-slams-plan-for-road-tunnel-lin...(url)
Anything that puts pressure on our pollies to make evidence based decisions rather than political pork barrelling has my full support, especially given the sums of money at stake and the critical stage we sit at for getting transport funding right. I spose the pollies are already working on spinng the report to suit their preferred outcome but I would imagine that Infrastructure Australia would find such a report hard to ignore in their assessments.

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Alastair Taylor's picture

No loving from Canberra tonight

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Martin Mankowski's picture

>> No loving from Canberra tonight

Thank god for that! Glad common sense has prevailed - funding a road with no business case and a reputed negative cost-benefit ratio would have been crazy. Still, looks like we'll still be lugged with it if Tony 'Roads are a sign of progress' gets into power.

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johnproctor's picture

I'm going to the info session in collingwood on 2nd June, they're having four in total along the alignment over the next week or two. Will report back if anything interesting is said although I'm sure it'll be a loop of the YouTube clip and not much more.

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Alastair Taylor's picture

How'd the info session go?

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Martin Mankowski's picture

Yarra Council join the fight to oppose the tunnel.

http://www.theage.com.au/victoria/yarra-council-vows-to-fight-eastwest-p...

Outside of Napthine and his mates, is there anyone left in Victoria that actually supports its construction? Don't like Yarra Council's chances, but I'll certainly be cheering for them!

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Mark Baljak's picture

Why tunnel vision will cost all Victorians, big time

June 24, 2013

Kenneth Davidson

The cost of the east-west road tunnel is huge, greater than any previous Victorian project by far and even many national projects. It will cripple the state's fiscal position for many years through massive payments to the public-private partnership consortium that will finance it.

The financial burden on the Victorian taxpayer will be so big that it will ''crowd out'' the state's core responsibilities for funding schools, hospitals, rail transport and even other roads for at least a generation.

Read more: http://www.theage.com.au/comment/why-tunnel-vision-will-cost-all-victori...

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Martin Mankowski's picture

Glad the papers are really starting to turn up the heat on this dud tunnel. When it was first announced I told my friends it would bankrupt Victoria, and they all laughed at me! This will be a classic case of 'build it and they will come' - rather than sitting in a traffic jam above Alexandria Parade you'll get sit sit in a traffic jam below Alexandria Parade - and pay for the privilege! Not to mention the traffic chaos it will cause at the Elliot Ave exit.

The closer to construction this becomes, the angrier I get. If Abbott ends up funding this, I think I'll go join the NIMBYs and hippies and tie myself to the bulldozers! :)

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Melbman's picture

Lets be honest, the Metro tunnel will struggle to get any finance as PT projects make even less sense than road ones due to the ability to give an actual ROI to investors.

For all the love in about building the metro rail tunnel, given the unwillingness of the (seemingly incoming) Federal Coalition govt to invest in the project, I cant see how we have any choice. Private investors will not be lining up to invest in the rail tunnel as much as some seem to think they will. If we are looking to bankrupt the state, I think the rail tunnel could be a faster way to do that.

Lets be clear though, I love the idea of the rail tunnel, but the reality is not so kind for it to actually be built.

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Martin Mankowski's picture

But will the east west tunnel give an actual ROI to investors? As the article posted in here by Mark says, the toll would need to be $30 in order to get a ROI similar to city link. And the last few toll roads built in Sydney ans Brisbane have been disasters. I really cant see investors queueing up to throw money at it. Given the CBR is only about 0.5, and it actually wont solve a problem, I can't see the point.

The metro has a predicted CBR of approx 1.5, so you would think it would be more attractive to investors - though admittedly a lot of that would be social benefit. I do agree that if the federal government dont fund it, there is no way we could fund it on state money + private investment alone.

Barring a Kevin Rudd led miracle revival, i think the city loop is doomed to become a train wreck (pardon the pun).

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Alastair Taylor's picture

HUNs come up with more detail: http://www.heraldsun.com.au/news/state-government-reveals-plans-to-widen...

a lot of smoke screening PT benefits, but of course - there's Eastern FWY widening: perhaps an avenue to toll that part of the road?

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Martin Mankowski's picture

I suspect so. Same thing happened with the Punt Rd - Toorak Rd part of the Monash when CityLink was constructed. And much like citylink, I'd imagine its the only way they can get private investment interested enough.

I notice the government is now saying the CBR is now 1.4, up from 0.5 in the original Eddington report! This apparently is due to more trams being able to run:

"One of the biggest claims for the project is that it will provide enhanced public transport opportunities across the city and the inner north by removing cross-town traffic from Alexandra Parade.

In addition to allowing trams to run faster and more frequently along Lygon and Nicholson streets, the reduced traffic in the area flowing from the project could also see extra bus services."

Surely Eddington took this into account in his original report? And I would have thought the best way to enhance public transport across the city and inner north would be to build the Doncaster Rail Link? I hope they plan to use some of the toll revenue to build it!

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Nicholas Harrison's picture

Nice strategic leak from the government to the Murdoch Press. Get the benefit to cost ratio of 1.4 out in the pubic arena with no further details so it cannot be refuted.

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Martin Mankowski's picture

Bout time!! Was starting to worry they were actually gonna back it. Lets hope there's no funding for it on next year's federal budget so contracts cant be signed before the end of 2014.

Opposition Leader Daniel Andrews will lead Labor opposition to East West Link

July 30, 2013

MATT JOHNSTON

STATE Labor will campaign against the multi-billion dollar East West Link planned by the Coalition Government.

Promising to outline a separate transport agenda, Opposition Leader Daniel Andrews tomorrow will announce for the first time his party’s plan to object to 6km road and tunnel linking the Eastern Fwy to CityLink in Parkville.

Read more: http://www.heraldsun.com.au/news/victoria/opposition-leader-daniel-andre...

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Melbman's picture

^^ Their objections will mean nothing but standard opposition and political grandstanding.

They were never going to support it as its in the seats that they hold or want to gain. Failure to object would have seen the greens take the initiative there.

At the end if the day, there is no way they can fix the hoddle street congestion with 'improvements' without demolishing buildings. Once again this would be putting themselves in the same position that we see with objection to the road tunnel, giving the greens the upper hand again.

As for the Western part of this project, that part seems to make even less sense as it shows the road finishing at the Docklands which will just be a recipe for congestion. Trying to find a way for it to better connect with city link will be pivotal to making this part work if there's no eastern link completed.

I can't see how they will deliver Metro Rail Tunnel either if they want the Western Link and Hoddle Street works to be completed. It's another unfunded transport plan that looks great and is designed to make voters love you but will likely struggle to deliver any of it. Typical.

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Alastair Taylor's picture

Fixing Hoddle Street: dedicated bus lanes the entire way from the end of the Eastern to Victoria, and all the way up Victoria to the CBD. I wonder if the ALP will pull a rabbit of their hat and campaign on that?

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Alastair Taylor's picture

We're never going to have the option of comparing value versus Metro

http://www.theage.com.au/victoria/eastwest-rationale-to-stay-secret-2013...

Victorians will never get to see the economic rationale for the state's most expensive transport project, with the Napthine government ruling out public release of the business case for the controversial east-west road tunnel, even after contracts are let.
Treasurer Michael O'Brien confirmed that the business case for the $6 billion to $8 billion tollway to link the Eastern Freeway and CityLink, will never be made public, citing commercial sensitivity.

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Melbman's picture

This doesn't seem much different to other projects is it? Did CityLink and even the Desal Plant have these details available for public release?

As articles have made clear, this was a money and politically driven decision, which is no different to many other decisions that are made.

The money part of the equation relates to just how to fund a project of this (or the Metro rail Tunnel) scale in the immediate timeframe, which is what Labor have been calling for (big projects?). The Metro Rail Tunnel has no promised money until around 2019 from Labor and nothing from the Liberals, and has very limited ability to recoup costs. A road tunnel, like it or not, has the ability to include tolls, whereas this would be much harder to implement for a PT project (extra user pays charges?).

The politics revolves around which areas gain most of the benefits. The WestLink section of the East-West road is a Labor held safe area, and the Metro Rail Tunnel, as detailed above, isn't exactly the easiest project to pay for. What does it leave, the East section of the East-West Link. The best thing would be to make the decision that has the most benefits to the city, but we all know that as nobel as that is, in politics there's many other factors at play.

Will we get to a position that a substantial infrastructure tax is implemented to pay for all these grand idea for all Vic taxpayers? I cant see either party attempting that.

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Alastair Taylor's picture

Re: recouping costs - Metro tunnel will be the catalyst for the Arden-Macaulay precinct - by 2040 the population in the area will be 22,000 (as opposed to 3270 in 2011). That's 30 years of stamp duty paid on property purchases and resales, 22,000 new people paying GST, council rates... the payoff is long term. http://www.melbourne.vic.gov.au/BuildingandPlanning/FutureGrowth/Structu...

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Martin Mankowski's picture

The more I think about this, the more i think that they won't be able to go to an election with this promise. The scare campaign has been, and will continue to be just too damaging. People aren't that stupid - hiding the business case will just further add to the perception that the CBR is almost certainly negative.

Napthine has promised to sign the contracts just 8 weeks out from the election. Surely if the polling showed at that stage that the Libs would get pounded, they wouldn't risk another decade in political oblivion after only 1 term back from the previous decade of political oblivion? I suspect they will execute a tactical retreat if the polls go rogue, and paint themselves as the saviour from their own policy!

East-East is nothing more than a cheap shot at Kennett style legacy building. Though surely the best way to legacy build would be to just build the Melbourne Metro?

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Martin Mankowski's picture

Agreed. Thats the same argument for the Clifton Hill-Flagstaff-Fisherman's Bend Tunnel - except Fisherman's Bend will have 50,000 residents, so even more lucrative. At the other end of that tunnel, Fitzroy property prices will increase significantly as well, and given its current density increase, will also provide significant stamp duty revenue. And all this would be revenue for the government, not for a private consortium running a road!

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Melbman's picture

The issue isn't longer term benefits from PT projects, it's the immediate capital required to build it. That's where the issue sits, as its less likely to get an investor to cover construction costs for a Rail Tunnel over a Road project.

I agree that the benefits of the Metro Rail Tunnel down the track are definitely there though and the merits of the project are obvious.

If we need a project now, Metro Tunnel is a far harder project is my point.

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Alastair Taylor's picture

It's not really... it's relatively simple for Vic.Gov to sell $8-9bil of bonds - don't even need to get the full amount from day 1 - to finance the project.

Political will to use public debt to fund infrastructure is the problem, inter-state, nationwide and in many anglosphere countries.

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Melbman's picture

^^ As easy as taking on debt is, we all know how people feel about that so it's a non-starter really.

Of course we could go on a serious investment drive on PT and other civic projects, but it's still a large risk. The debt still needs to be serviced in the end, and the way the world economy is these days, any shock and things may get quite messy.

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Martin Mankowski's picture

And Jeff Kennett is saying we should do just that - the same guy who spent the best part of a decade as Premier lecturing everyone about deficit spending.  It says a lot when someone like Jeff changes their tune.

 

Borrow to build rail network: Kennett

 

Date August 12, 2013

 

He said future generations would appreciate that earlier governments had had the foresight to borrow while interest rates were low and build public transport. ''In 100 years people won't care about how much it [the rail system] cost.''

 

In comments likely to rile the Labor adversaries he flayed for fiscal profligacy, Mr Kennett said debt was good if used for infrastructure, and money was cheap. ''The public sees debt as a no-no. The public needs to be educated about debt.'' 

 

Read more: http://www.theage.com.au/victoria/borrow-to-build-rail-network-kennett-20130811-2rq88.html#ixzz2czPhaoln

 
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Melbman's picture

^^ Its very easy to say that kind of thing when you aren't in power and having to put up with the heat that comes with politics. If he was in power, he would likely never consider such a move.

Many people cringed at the huge debts Victoria was carrying prior to his terms in power from many big projects and an economy that was suffering overall. There wasn't much to spend when the time came to pay for new projects, which is why JK had to take the actions he did.

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