Federal government diverts ring road funding to East West Link

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The Age: Federal government diverts ring road funding to East West Link. April 28, 2014. James Massola, Josh Gordon

Half a billion dollars previously set aside by the Commonwealth to upgrade the Western Ring Road is being diverted into the Napthine Government’s signature East West Link.

The federal government’s contribution to stage two of the project is expected to rise to $1.5 billion after Deputy Prime Minister Warren Truss recommended $500 million in federal funds be diverted from the M80 ring road upgrade.

Fairfax Media revealed on Monday the federal government had settled in recent weeks on a contribution of about a billion dollars to the project.

But it can now be revealed that Mr Truss has recommended the diversion of the extra $500 million after a concerted lobbying effort from the Victorian government, which has made the East West Link stage two a funding priority.

Funding for the second stage of the East West Link project was debated as recently as last week during meetings of the expenditure review committee

And on Monday, Mr Truss sent a letter to the other members of the committee, including Prime Minister Tony Abbott, Treasurer Joe Hockey, Finance Minister Mathias Cormann and Health Minister Peter Dutton, recommending the extra money be allocated.

The committee met again on Monday and the extra funding is expected to be approved by the Prime Minister.

State Transport Minister Terry Mulder and former federal transport minister Anthony Albanese last year promised that motorists travelling on the M80 Ring Road between Sunshine Avenue and Ballarat Road would enjoy a safer ride, with a third lane in each direction to improve traffic flows. The project included new overhead electronic lane signals, variable speed limit signs, CCTV cameras and upgrades to communication networks and central control systems.

It followed an announcement in the 2013 federal budget setting aside an extra $525 million to complete the project, which was expected to cost $2.25 billion.

The ramifications of the decision to divert $500 million from the project into the second stage of the East West Link are unclear. A final section of the project, upgrading the Metropolitan Ring Road between Edgars Road and Plenty Road, was due to be completed by mid-2014.

Even with the extra money the Commonwealth’s contribution is likely to prove disappointing for the state government.

Treasurer Michael O’Brien earlier this month said the higher cost of the second stage of the project would require a “commensurately greater” contribution than the $1.5 billion promised by the Abbott government for the first stage.

Dr Napthine’s office declined to comment.

The decisions follow tensions between the state and Commonwealth governments over major projects funding.

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