Vic Government mulls East-West Link 2.0

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By Leith van Onselen

After dumping the flawed East-West Link project, the new Victorian Labor Government is now considering building a new $5.5 billion “Western Distributor” that would link the western suburbs with the City Link toll road. From The Age:

Premier Daniel Andrews has revealed he is seriously considering an unsolicited bid by CityLink operator Transurban to connect the West Gate Freeway to CityLink via a tunnel, a second river crossing and an elevated freeway along Footscray Road.

To handle the increased traffic, the West Gate Freeway will be widened, with two extra lanes from the M80 Ring Road to the West Gate Bridge boosting capacity by about half. The Tullamarine Freeway will also be widened.

…motorists will ultimately pay for extra tolls. Transurban is proposing to pay for [two-thirds of the] project by extending the life of CityLink tolls by up to 15 years until 2050.

It also wants a $3 car toll and a $13 truck toll for the new tunnel and bridge from the West Gate Freeway to CityLink for 25 years…

The Abbott government will also be asked to chip federal money previously earmarked for the dumped East West Link…

According to the article, Deloitte Access Economics estimated that the project would deliver net benefits to the state of some $1.60 per dollar invested using Infrastructure Australia’s preferred methodology, which is more than triple the paltry $0.45 cents for every dollar invested estimated for the dumped East-West Link project.

According to The Age’s Adam Carey, the Western Distributor would cost around half as much as East-West Link and “looks like a big enough traffic-mover to kill the need to build the western half of the East West Link between the Western Ring Road and CityLink”.

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It is appropriate that the Victorian Treasury undertake further due diligence before any decision. With a significant share of Melbourne’s future growth likely to take place in the West, along with ongoing increases in freight through the Port of Melbourne, providing further road capacity – including a second river/bay crossing – will be essential. But the project must add economic value not take it away.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.