The Age: East-west link: leaked email (19 August 2013)
From: Douglas Harley/VicRoads@VICROADS
To: David Shelton/VicRoads@VICROADS,
Cc: ############/VicRoads@VICROADS Date: 17/04/13 08:23 AM
Subject: What should VicRoads do about Linking Melbourne using a Non-Government Model for modelling the East West Link?
Please see below a more comprehensive answer the the question you asked me at our meeting in your office on the morning of Monday the 15th of April. i.e. Last Monday morning.
Your question was, “What should VicRoads do when another authority is presenting it with modelling done with a model other than VITM.” The question was in the context of a discussion about the modelling that Linking Melbourne is doing for the East West Tunnel.
My response is as follows. These comments are an expansion of my reply to you at that meeting.
1. The first thing is that we should do our job, to the best of our ability. We are stewards of the funds that tax payers provide to us to maintain and develop the transport infrastructure they need to live their lives. We need to take that responsibility seriously. We should all be looking forward to the consequences of what might happen.
2. We should be doing a, “Risk based analysis”. You need to think about what your answers would be in a court of law, under oath, if this project is constructed, and it fails financially, then goes into receivership. What would your answers be when you are being cross examined as part of a class action law suit taken by the the “Mum and Dad investors” who lose their superannuation retirement savings, because their super funds were invested in the project as part of a Private – Public Partnership agreement. Did you take “reasonable” steps to ensure that the modelling being done for this project, that forecast the traffic volumes that could be expected to use this project, were as correct as they could be?
3. If you continue to rely on the modelling done by the VLC ZENITH model, then you would have to answer that you did not take all “reasonable” steps to ensure that you had confidence in the forecasts presented by Linking Melbourne, and you personally, and VicRoads, would be liable for damages resulting from the financial failure of the project, caused to the investors. I expect that you are aware of the recent projects in Sydney and Brisbane that have failed financially. These projects are similar to the proposed East – West Link, in a number of ways.
4. We know for a fact that they are using an inflated “value of time” in their model. We suspect that it is in order to inflate the numbers of vehicles that their model is forecasting will be using the project. This is based on advice from ##########, in a memo dated 9 July 2012 from ####### to ###########, in which ##### wrote “There is already established parameter values of time, what is being suggested here smacks of a desire to enhance the quantum of Benefits.” I suggest you follow up on this previous correspondence.
5. Given that you told me in the meeting that you don’t understand much about transport modelling, I expect that one of the questions you will be asked in court is, “What advice did you seek, and who did you seek it from, in relation to the modelling that was done for this project.” I know for fact that you asked ########## to provide you with some advice in relation to the pros and cons of using the VLC ZENITH model v the Government owned VITM model for a VicRoads’ review of the modelling done by Linking Melbourne for the project. I would have thought that you would be seeking advice on modelling from someone with experience in transport modelling. I would also expect that you might seek that advice from someone who’s role it is to provide advice on modelling issues, like the “Manager – Network Modelling and Analysis”. I note that you did not ask me for advice in this instance, prior to our meeting on Monday.
6. I have put these comments to you in writing because I do not want to be sued as part of the class action against VicRoads and it’s officers when and if the East West project fails financially. My advice to you is that we MUST NOT trust the information provided to us by the Linking Melbourne Authority, because it does not use VITM for the modelling. The model that they are using is not open to the same level of scrutiny as VITM is, and from the little that we can find out about it, it appears to be using an inflated value of time to artificially inflate the benefits that can be expected from the project.
Thanks for your time.
Bye for now.
Douglas V. Harley
Manager – Network Modelling & Analysis
Network Planning and Policy
Network & Asset Planning Prospect Hill Road, CAMBERWELL VIC