Transurban Group, the Australian toll road developer and operator, has entered negotiations with the Victoria government following its submission of an unsolicited proposal to build the A$5.5 billion (€3.9 billion; $4.4 billion) Western Distributor toll road in Melbourne.
The Western Distributor would effectively be an alternative to the East West Link, which was shelved by Victoria Premier Daniel Andrews after his Labor party was swept to power in state elections towards the end of last year. It is a cheaper option than East West Link, for which the second stage alone had a price tag of some A$10 billion.
However, the proposal may set the scene for a stand-off between state and federal government with the latter warning that it would not guarantee funding for the project because it has yet to see a business case and Victoria was yet to commit its own funding.
Transurban chief executive Scott Charlton has indicated that the project would not require state funding but said he believed it “ticks all the boxes” for federal government funding “as a project of national significance, which reduces pressure on the West Gate Bridge, provides more efficient freight movements to the nation’s busiest container port and supports local economic growth”.
Further funding would come from tolls on motorists and heavy vehicles and from an extension of Transurban’s CityLink concession deed.
The project, which Transurban says could be completed by 2020, involves: the proposed Western Distributor tunnel and elevated motorway connecting the West Gate Freeway with the Port of Melbourne, CityLink and the Central Business District; the widening of the West Gate Freeway with two additional lanes from the M80 ring road to the West Gate Bridge; and improvements to Webb Dock access.
When the Victoria government recently ditched the East West Link there was speculation that it would legislate to avoid paying up to A$1.2 billion in compensation to the winning project consortium. In the end, that was avoided when it agreed to pay A$339 million to cover costs that had been incurred.
Greeting news of the proposal, Brendan Lyon, chief executive of lobbying group Infrastructure Partnerships Australia, said: “This is very good news for Victoria. It’s obvious that additional motorway capacity is needed for Melbourne’s growth and to bust road congestion.”