Treasurer puts up road block over true East West Link cost

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3AW: Treasurer puts up road block over true East West Link cost. Mark Davidson, 11 November, 2014

State Treasurer Michael O’Brien has rubbished claims the East West Link will cost Victorians $18 billion, but has refused to disclose exactly how much the project will cost taxpayers.

Transport and financial planners have told The Age the true cost of the Napthine government’s toll road will be $17.8 billion when you take into account interest, maintenance costs and payments to the consortium.

However, Mr O’Brien said that figure is out by “billions upon billions upon billions of dollars”.

“This is a report… that’s been put together by a bunch of left-wing academics with a huge anti-road agenda,” he told Neil Mitchell.

“They must have assumed we are a Labor government and we had to borrow to pay for it. We are running surplus budgets here in Victoria. We are not borrowing a single cent to pay for East West Link.”

But Neil Mitchell said it’s a bit rich to dismiss the report as “absolute rubbish” while refusing to divulge how much the road project will cost.

“They’ve got a point in that you’re saying it’s all rubbish but you won’t tell us what the real figure is,” Neil said.

Mr O’Brien said releasing the maintenance and services costs would only “help bidders against the state and against the interests of taxpayers”.

The government has put a price tag on the project of $6.8 billion, but Professor Jago Dodson from RMIT said the total cost will be far greater than that.

“What perhaps many people won’t realise is that there’s not just the construction charge or cost for the project, but there’s an availability payment that then is made every year of operation of the tunnel once it’s completed,” he said.

“By 2023, that availability charge is around $400 million a year. And if you increase that at the rate of inflation up to about 2045, you get a much bigger total cost than just the construction cost of $6.8 billion.

“You get up much closer to, depending on the inflation rate and the cost of capital you use, between $14.7 and $15.6 billion.”

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