Prime Minister Pork has warned Victorians not to vote for the Labor party in this weekend’s state election, claiming that he would pull funding allocated to the East-West Link road project if Labor fulfills its promise to tear-up the contract to build the road if it forms government. From The Australian:
“I want to make it absolutely clear to the people of Victoria that the $3bn the commonwealth government has committed to this project is for one purpose and one purpose only — and that is to build East West Link.
“Let me repeat: the $3bn the commonwealth government has committed for the East West Link is only available to build the East West Link”…
Mr Abbott’s written warning to Mr Andrews and Victorian Premier Denis Napthine is also a clear instruction to other states as they face elections about the commonwealth’s intentions on federal funding.
Let me state from the outset that I share Labor’s opposition to the East-West Link Project.
As noted previously, it is one of the most expensive transport projects in history costing an estimated $1 billion per kilometre ($1 million per metre) to construct.
To add insult to injury, the project has been approved without passing a rigorous cost-benefit analysis, with The Age earlier this year revealing that the project could deliver a net loss to Victoria:
Infrastructure Australia head Michael Deegan told a Senate committee that the government’s unpublished business case also provided an alternative estimate, showing a benefit-cost ratio of 0.8 when ”wider economic benefits are not included”.
Under this scenario the project would return just 80¢ for every $1 spent, suggesting an economic loss if the ”stock-standard” analysis preferred by Infrastructure Australia is used…
In a submission to a federal infrastructure inquiry, Infrastructure Australia targeted Victoria for failing to submit a ”robust” business case for the east-west link, singling the project out as an example of why the public are cynical about ”big ticket” infrastructure announcements.
The Napthine Liberal Government should also be condemned for rushing to sign the contracts to build the East-West link prior to the State Election. There was absolutely no urgency in signing the contracts, no matter what the government says, and it could easily have waited a few months for the election result, and in the process avoided potentially huge legal bills for the Victorian taxpayer.
Because of Napthine’s rush to beat an artificial election deadline, Victorians are now painted into a corner and must either fund (in part) a ridiculously expensive road project, or pay compensation to the road builders in the event that the new Labor Government tears the contracts up – neither of which is desirable.
The Abbott Government should also be condemned for financially backing a project that never underwent thorough due process, and to which a detailed cost-benefit was never released to the public.
If Tony Abbott wants to be known as the “Infrastructure Prime Minister”, rather than “Prime Minister Pork”, then he needs to ensure that infrastructure funding decisions are based on objective cost-benefit criteria, regardless of mode (road or rail), under proper transparency processes. Otherwise, taxpayers will be left carrying the burden of expensive white elephants that offer only limited productivity/social value, and whose investment could have delivered much bigger returns elsewhere.
