East West Link: the case for and against Melbourne’s $6.8bn road

The Guardian: East West Link: the case for and against Melbourne’s $6.8bn road. Gay Alcorn Friday 10 October 2014

A looming 18km of toll road has become Victoria’s great divide. But let’s put the political passions aside and consider the project on its merits
East West Link

A computer-generated image of the eastern portal of the East West Link tunnel. Illustration: Victorian government

It’s a “congestion buster”, a “game-changer”, a “dud”. It’s a road, the East West Link, the most contentious, emotionally charged flashpoint in next month’s Victorian election. Swirling around the politics, the court challenges and the price tag is a question: is this 18km toll road a good idea? And even if it does have merit, are there better ideas that would ease Melbourne’s gridlock more cheaply?

I’ve tried to tease out this question with the help of transport and urban planning experts and others. I’ve tried to ignore the politics, which are fraught indeed, and focus on the merits of the East West Link as a project and a case study in how infrastructure policy works – or doesn’t work – in this country.

To begin, here are four transport consultants, engineers and academics with vast theoretical and practical experience. Here’s their bottom-line answer to that question: is the East West Link a good idea for Melbourne?

William McDougall, infrastructure engineer and transport consultant who has worked on several projects in Victoria, including an early study into the link: “Having studied the East West Link several times over the years, I’m convinced that it’s not needed.“

Dr Alan March, associate professor of urban planning at Melbourne University: “I look at this as a choice about where public investment and resources are going and, when it is compared with other short-term and long-term choices that could be made, this is not a good choice.”

Dr John Stone, lecturer in transport policy, University of Melbourne: “This project has problems because the only credible cost benefit analysis has shown that it is not going to make a return on the investment that we make.”

Professor Graham Currie, Australia’s first professor of public transport, at Monash University, with 30 years experience as a transit planner: “Is it a good idea to build more motorways in inner areas? I think it’s of questionable value. It smudges congestion around a bit but doesn’t really solve it.”

The expert view is consistent – the East West Link may bring some benefits, but it should not be the top priority for a city expected to be home to nearly 8 million people by mid-century.

All are sceptical of the finances, dismayed by the secrecy surrounding the project, and convinced that the state needs a big shift in thinking if it’s going to cope well with a surging population. They say what’s needed is a tilt towards a mass public transport system.

But experts don’t make decisions. Politicians do, taking into account a range of factors other than expert opinion.

The public is confused for good reason

“The public is confused,” says Alan March. It is hardly surprising. The idea for a cross-city road bypassing the CBD to link Melbourne’s east and west makes intuitive sense. It’s been promised and rejected and promised again with various tweaks for a generation.

The Victorian government’s plan has two stages. The eastern section, to be built first for $6.8bn, is well advanced. Contracts with a Lend Lease-led consortium were signed last week and construction is due to begin this year. After that will come the western section, to cost between $8 to $10bn, and scheduled to be completed in 2023.

New South Wales may call its proposed $11.4bn WestConnex toll road the “biggest transport project in Australia”, but it’s kidding itself. State governments do like to boast about these things, but Melbourne’s link is estimated to cost about $1bn for every kilometre of road, Sydney’s a mere $473m. All up, Victoria’s price tag is close to $17bn, the largest infrastructure project in the state’s history.

Premier Denis Napthine says with some pride that it’s “locally, nationally and internationally significant”. The other word thrown around by Victoria, and NSW, is “game-changer”.

First to the eastern section. The Eastern Freeway now stops dead at Hoddle Street in the inner north. Cars pour onto arterial roads and streets around suburbs such as Collingwood and Carlton. To cross town they must weave through these streets to get to another link – CityLink. There are arguments about how many are actually trying to cross town, but congestion is getting worse for residents and harried drivers.

For example, Alexandra Parade is a nightmare, carrying up to 80,000 vehicles a day, crawling along during peak periods at less than 15kmh. The East West Link would bypass all that, connecting the Eastern Freeway at Clifton Hill to CityLink in Parkville, mostly via a 4.4km tunnel underneath streets such as Alexandra Parade, as well as the Melbourne cemetery and Royal Park. For its supporters, it’s the proverbial “missing link” in Melbourne’s freeway system.

The western section, which many experts and business groups believe is the higher priority, would continue the road a further 13km through the inner west, ending up at the Western Ring Road with connections to Melbourne’s port.

Currently, people from the western suburbs and further afield have only one way to cross to the east – via the West Gate Bridge, which has reached capacity and is another nightmare whenever there’s an accident. The link would create a second crossing, and the freight industry in particular says it’s essential. Lost time is lost money.

The idea to connect the major freeways with a link has always been tantalising, and always controversial. Unlike many big road projects, this one cuts through established residential areas close to the city centre. Because of that, it’s always been talked about as needing a tunnel. But tunnels are hugely expensive and hugely disruptive. The eastern part alone will take five years to build. It requires the compulsory acquisition and bulldozing of 92 homes, with the loss of 20 businesses and a portion of Royal Park.

The link has never had bipartisan support. Instead, “once in a generation” transport plans have been announced every few years, and thrown out every few years.

Before the 1999 state election, then premier Jeff Kennett promised a tolled tunnel linking east to west. The Labor leader Steve Bracks rejected that idea, saying he would instead conduct a study to look into transport in the northern suburbs. As premier, he asked William McDougall to lead the study, released in 2003. McDougall looked closely at the proposal for an East West Link, and advised against it.

“We did a lot of work on the east west tunnel and alternatives and concluded that the best strategy would be to invest and improve public transport and traffic management measures first and then see if you needed to do a tunnel,” he says. He hasn’t changed his mind since.

A tunnel would have benefits, but there were just too many negatives to make it a priority, according to McDougall – it was much too expensive, with big social and environmental costs.

As McDougall tells it, Bracks didn’t take much notice of the report anyway – that’s the way transport policy seems to work. When John Brumby took over as premier in 2007, he got interested in the tunnel again and commissioned Sir Rod Eddington – now chairman of Infrastructure Australia – to conduct another study.

In his much-quoted report, Eddington recommended three transport priorities to deal with familiar themes – a growing city, traffic gridlock and a need for an alternative to the West Gate Bridge. They included a version of an east-west link, although he prioritised the western section and included none of the flyovers and off-ramps in the current plan.

Protesters picket a test drilling site for the East West Link in Collingwood in January. Photograph: Joe Sabljak/AAP

He also recommend a regional rail link and a 9km Melbourne Metro rail tunnel under the city with new stations and hugely increased capacity. In today’s terms, it would allow another 20,000 people to use the network during peak times.

It’s the rail link that the public prefers, according to opinion polls, and was a favourite of Infrastructure Australia, which sets national priorities for projects. It was deemed “ready to proceed” in 2011, while the East West Link has never got above the lower grade of “real potential”.

But when Brumby announced his transport plan in late 2008, to many people’s surprise it didn’t include Eddington’s proposal for an east west tunnel. That relieved protesters, frustrated business, and seemed to be the end of it.

At the last election in 2010, neither main party proposed an east west link. Indeed, the Liberals ruled it out. “You can’t build your way out of congestion,” said their public transport spokesman, Terry Mulder.

Former Victorian Premier Ted BaillieuFormer Victorian Liberal premier Ted Baillieu promised improved public transport links before the last election in 2010, but only the East West Link made it to the top of the agenda. Photograph: Julian Smith/AAP

The Liberal leader, Ted Baillieu, vowed to fix “Labor’s neglect and failure” in public transport, with new trains, better maintenance and new stations. That public transport pitch persuaded the main lobby group, the Public Transport Users Association, to back the conservatives over Labor. Public transport was a key reason Labor lost the election. As for Brumby’s big transport plan, the Liberals promised to review it.

So they did, and in 2012 the East West Link suddenly became the top transport priority in the state. A revised Metro Rail remains on the agenda, but has been put off until later, and poor old Doncaster in the city’s east, promised a suburban rail line yet again at the last election, was put on hold again. It was first promised a rail line in 1890.

Contracts were signed for the link just weeks from the election. Labor has promised to tear up the contracts if it wins, although compensation could be hundreds of millions of dollars. It wants to prioritise Melbourne Metro rail and other public transport projects.

The public has a right to be not just bamboozled, but cynical about the parties’ shifting priorities.

“Why do we put them (politicians) in charge? I don’t know,” says March. “We don’t have a strong transport government agency that is disconnected from politics. The politicians are making all the transport choices, and they are only giving us short-term thinking.”

Do the figures stack up?

The truth is that we don’t know. Those against all new major road projects may not care about the figures one way or the other, but those who follow these things closely say the project is unprecedented for its lack of transparency. It’s been a nagging political problem for the government, and a key reason the East West Link is so contentious.

“Normally we would see more detail, and historically it’s been much clearer on what basis we are proceeding with projects like this,” McDougall says.

“This is new for Australia,” says Stone. “The fact that through all these court cases and all this political focus the government has never released its business plan – it released a back of envelope estimate – means probably there’s nothing to back it up. If they had a better number they would have put it out there.“

The government released a 10-page executive summary business case in June last year justifying the project. Included was the benefit cost analysis (BCA) of 1.4, which means that for every dollar invested, there was an expected return of $1.40. That single number isn’t the only reason projects are approved, but it is considered critical in allowing a comparison of projects to ensure public money is well spent.

The government refused to release the full business case for “commercial in confidence” reasons, arguing it would jeopardise its competitive advantage as it sought bidders – that they would up their price if they saw what the government’s projections were.

The secrecy goes against the increasing demand to release more information so that Australia’s big expensive infrastructure projects are decided rationally, not politically. Infrastructure Australia wants more transparency, as does the Productivity Commission.

East West LinkTraffic congestion at the Hoddle Street exit of the Eastern Freeway in Melbourne in April. This is one of the congestion points the East West Link has been promised to ease. Photograph: Julian Smith/AAP

The commission’s report this year said there was an “urgent need to comprehensively overhaul processes” for assessing and developing projects because too many offered poor value for money.

It specifically rejected the Victorian government’s arguments for secrecy, saying the risk that bidders would “bid up” to the government’s cost estimates was low. It recommended that “all governments should commit to subjecting all public infrastructure investment proposals above $50m to rigorous cost–benefit analyses that are publicly released and made available for due diligence by bidders. In general, analyses should be done prior to projects being announced.”

Sydney’s WestConnex is not without its critics, but its executive summary is 54 pages long and includes much more detail. The NSW government has not released the full business case either, but the government was forced by a Greens motion in parliament to release thousands of pages of documents related to it. The project’s BCA is 2.55.

Experts say the assumptions behind the 1.4 figure should be made public. There is no detail about how it was calculated – how much time travel savings were worth, for instance, or how much productivity gains might be. The public should be able to know traffic volume projections for a year, two years, 10 years after it opens. Instead, it’s “trust us”.

The federal government – which has promised $3bn for East West Link – insists that “all commonwealth-funded projects worth more than $100m would be required to undergo a cost-benefit analysis by Infrastructure Australia”. That analysis is meant to be made public.

Collingwood residents Elyssa and John Mansour, whose home is one of hundreds that will have to be compulsorily acquired to build the first stage of the East West Link. Photograph: David Crosling/AAP

None of that has happened in this project. It doesn’t seem to matter, as the federal government has already handed over $1.5bn for the project’s first stage.

Those who have worked in this area a long time throw up their hands. “There will be specific documents outlining the benefits compared to the costs, and this would have gone to the treasurer to create a cost benefit analysis. In all cases we should know what the numbers are,” Currie says.

“The business case does not stack up, of what we know of it, it’s kind of crazy that they get away with it again and again,” March says.

As for the 1.4 figure, it was a Senate hearing that prised out the fact that the government had included “wider economic benefits” in its calculations. Without that, the figure would be a less defendable 0.80 – a return of 80c for every dollar spent. So-called “agglomeration benefits” can be slippery, the experts say, and refer to the supposed benefits to business when urban density increases. They’re not settled practice and Infrastructure Australia doesn’t use them. And again, we don’t know the details of what “wider economic benefits” the project took into account, because the government won’t release them.

What’s the alternative?

Business backs the East West Link and has done so since it was first mooted. The Victorian Employers’ Chamber of Commerce and Industry says it’s critical for employment, business productivity and to relieve congestion.

Its chief economist, Steven Wojtkiw, dismisses quibbles over the business case, the cost benefit analysis or lack of transparency. Business just wants it done, particularly for the state’s freight industry, which is growing fast.

More than 80% of Victoria’s land freight goes by road and, although rail is increasing, business groups anticipate road continuing to be dominant because it’s more flexible.

So, when transport and urban planners urge a “public transport first” strategy, Wojtkiw is doubtful.

“It’s too simplistic,” he says. “What are the alternatives [to the East West Link]? There may well be critics but there are very few simple practical solutions posited.”

Our four experts argue for a long-term and complex strategy. They are not saying there is a giant public transport project that can replace the East West Link. Rather, they say a city of 8 million or so people is kidding itself if it believes the private car can remain as dominant as it is now. Melbourne will keep growing, and all the evidence suggests building roads to reduce congestion is a short-term fix at best – the congestion just keeps coming.

A train passes through a level crossing at Bourke Road in Malvern in Melbourne. Planners argue that a growing city cannot continue to rely on cars as the primary means of transport. Photograph: Julian Smith/AAP

“There is not a simple solution that can be solved by public transport in a direct way,” March says. “It’s not based on one-off projects. We need the tram system connecting to the train station and the bus station in an integrated way. The argument should be about developing a commitment to public transport overall, and it needs to be consistent and integrated.”

“You can’t have a city of five, six, eight million people rely on on the private car as the dominant mode of transport,” Stone says. “You have to start making the public transport system work; you have to say we’re going to put public transport first.” If we took far more private cars off the road, it would free them up for those who really needed it, such as businesses.

“People are right to say they can’t imagine how public transport would fix things – it’s never considered practical. That’s because we’ve never taken it seriously.”

Some argue for a congestion tax as part of the solution. Some back the Melbourne Metro rail project as a higher priority than the East West Link. All speak of “integration”, of doing small things and big things and of vastly improving public transport in the neglected outer suburbs. That would relieve pressure on the road network for those who really need more effectively than building new toll roads.

“The only way to provide more lasting capacity to serve the growing city is to invest in more public transport to increase its mode share, meaning we need to provide public transport at a much faster rate than the overall growth in travel demand,” McDougall says.

Daniel AndrewsVictorian Labor leader Daniel Andrews has promised to ‘tear up’ the East West Link contracts if he wins office. Photograph: Joe Castro/AAP

“Urban planning and transport planning professionals worldwide have accepted for many years that the best thing in growing cities is to improve public transport to keep those cities moving. The cities that rely on cars, generally speaking, perform worse economically than those that have public transport.”

The experts, too, know that they’re losing the political argument, at least most of the time. The public is warming to the public transport argument, but governments still love roads. Tony Abbott has prioritised road funding, saying the commonwealth will not fund urban rail.

It’s about money in the end. If Labor wins next month and scraps East West Link – at huge cost – and champions its Melbourne Metro rail, where will the money come from? There will be nothing from Canberra, and state Labor has committed just $300m for planning and design. The projects that get up are funded, and the big ones right now are roads.

It may be all too late. Victoria has 6.8% unemployment, the highest in 13 years. Its car industry will disappear within two years, and its traditional manufacturing base is slipping away.

One argument is that the state needs a whopping infrastructure project to employ people quickly – the government says 3,700 jobs will be created in the construction phase of the eastern section – with all the flow-through to the economy. And it might be that a big project needs to start soon. Melbourne Metro rail is years away.

Is East West Link a good project? It’s hard to say it is, given its cost and the way it has been handled. Our biggest infrastructure projects don’t seem to be based on careful evidence and the scrutiny that transparency ensures.

Its rationale may be dubious and the process may have been scandalous. But the money has been raised, the contracts signed and the cost of pulling out would be crippling. If Labor wins the election despite all that, it might be a sign that the public really does want to get serious about public transport. That, as they say, would be a game-changer.

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