Napthine’s East-West Fraud revealed

Behind the plan to justify the east-west link.

Behind the plan to justify the east-west link.

From Secret case for link revealed by Josh Gordon, The Age October 2, 2013

“It is a fraud on the Victorian people”

The financial case for the east-west link hinges on a prediction that toll road use will jump over the next 30 years because of rising wealth and shrinking petrol and CBD parking price rises.

A cabinet-in-confidence document, obtained by Fairfax Media, for the first time details key assumptions used to justify the $6 billion to $8 billion project, which the state government claims will produce a return of $1.40 for every $1 invested.

A discussion paper produced by VicRoads, the Linking Melbourne Authority, the Transport Department and Public Transport Victoria, reveals the government was able to boost its predictions for the road by as much as 15 per cent using a controversial assumption that time will be more valuable to future motorists because of rising wealth.

The report, used to prepare the highly secretive business case for the road, says the methodology “has not been used in any of [the Transport Department’s] other public transport projects or program modelling to date”.

Despite this, it says there is ”evidence to suggest that as the community’s wealth increases more people are prepared to pay tolls as they value their time more highly”. As a result, the business case assumes car drivers will be 1.4 per cent more willing every year to use toll roads over non-toll roads, while drivers of commercial vehicles will be 1.8 per cent more willing to pay tolls.

The document reveals that this assumption alone meant predicted traffic volumes were 15 per cent higher by 2031 than they otherwise would have been had the methodology not been used. “This is … inconsistent with initial modelling for the Eastern Freeway undertaken for the Doncaster Rail Feasibility Study,” it says.

While the cost of inner-city parking is currently rising by about 4 per cent a year in real terms (above inflation), the business case assumes the annual rate of increase will fall by more than half to 1.6 per cent by 2041.

It also predicts growth in the cost of operating a car – mostly petrol prices, but also maintenance, insurance and registration – will slow from an annual rate of 2 per cent to 0.5 per cent by 2041.

A source said there had been internal concern that the government had been prepared to use ”garbage” assumptions to make the project appear to stack up, accusing it of manipulating modelling to produce a favourable result.

But another source familiar with the modelling work said the assumptions were standard.

While previous projects have relied on the ”in-house” Victorian Integrated Transport Model to assess major projects, the government outsourced the east-west link process to Brisbane-based company Veitch Lister, making scrutiny difficult.

Opposition planning spokesman Brian Tee accused the government of ”playing the public for suckers” by deliberately using spurious assumptions to justify the link.

”It is a fraud on the Victorian people, and the real price is the schools, hospitals and roads which could have been built if the government wasn’t so hellbent on delivering this dog of a project,” he said.

A government spokeswoman said the Comprehensive Impact Statement, due to be released in November, would include further, detailed traffic modelling information.

A government source described the earlier document, from mid last year, as out of date, saying it should not be relied upon.

The government has so far refused to release the full business case for the project, releasing instead a ”short form” version asserting the project will generate a return of $1.40 for every $1 investment. Earlier studies have found the link, connecting the Eastern Freeway to the Tullamarine Freeway, would be unlikely to be viable, generating just 50¢ for every $1 invested.

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2 thoughts on “Napthine’s East-West Fraud revealed”

  1. Jim says:

    Others have gone this way with their traffic assumptions and we know their names – Airport Link and Clem Jones in Brisbane, Lane Cove and Cross City in Sydney. All four ended up financial disasters.

    We really need to get this message to those communities across the state, far from the tunnel site, as they will be affected through its finances. Tell them about the 4 interstate disasters. That will raise eyebrows!

  2. Jim P says:

    To understand Europe and China who have dedicated to building railway lines to connect major cities but what their done is to build high speed rail which is comparable to air travel they have done so because its an efficient way to transport commuters.
    The Gothard Rail Base Tunnel in Sweden located in the Alps is a 50km rail tunnel but the beauty is it’s high speed and is for commuter and freight and will be finished in 3 or so years time actual build time is 20 years or so.
    The idea is that governments in those countries see the potential and are proactive thinkers with the right mindset.

    Here in Australia, Sydney carries 40 percent of their population by rail which beats Melbourne’s hands down by 15 or so percent even with the patronage growth that we had but before the growth it was less than 21 percent dismal compared to other parts of the world.

    Here in Victoria successive state governments have neglected the current rail system to a point where its dire need of urgent maintenance even though that they have started to do the maintenance back in 2009 in my view way too long.

    The Glen Waverly line was the last urban rail project and that was completed in 1930, if you exclude city loop and handful of rail & electrification projects we have had its been 83 years since any new urban rail line was built in Melbourne.

    Successive Victorian Governments have seen rail as a liability hence their preference towards roads, we have the best road network in Australia we do not need new roads because there are less cars than there was 7 years ago (Seen it for myself)
    due to the cost of living going up, people started to embrace rail but the lines been so far apart from each other it’s a joke hence the stop gap measure that buses have to take to plug the gaps in the PT system so inefficient but hey government thinks that going bonkers over roads is better so I will add more of them to get 10k of cars every hour hold on you could fit 10k of drivers onto 10 trains… Way to go Napthine Dumb thinkers the state government…

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