Victorian state government kicks off PPP race for Australia’s North East Link road

The Labor government won re-election in a landslide last week and is pushing ahead with a spending spree on a raft of infrastructure projects.

The newly re-elected Victorian state government has kicked off an expected bonanza of infrastructure spending by asking for expressions of interest in an availability public-private partnership for the North East Link road project.

The Labor government issued the tender documents earlier this week, just two days after being returned with an increased majority in a landslide victory.

North East Link is billed as the “largest investment in a road project in Victoria’s history” and will connect Melbourne’s M80 Ring Road in the city’s north with the Eastern Freeway. The government has described it as the “missing link” in the city’s orbital freeway and it has been listed as “high priority” on Infrastructure Australia’s project priority list.

The project’s total budget of A$15.8 billion ($11.4 billion; €10.1 billion) will make it comfortably the most expensive road project in the state’s history.

The government has asked for expressions of interest for the project’s primary package, which includes design, construction, operation and maintenance of the road.

It will be procured as an availability PPP and the opportunity is estimated to be worth approximately A$7 billion to $A9 billion.

The PPP will specifically require construction of 7 kilometres of freeway as well as twin three-lane tunnels approximately 6 kilometres in length passing under the Yarra River. It also includes the construction of new interchanges and the provision of tunnel systems and tolling infrastructure.

Other project packages not covered by the PPP will see a section of the M80 Ring Road upgraded and part of the Eastern Freeway widened. The Doncaster Busway will also be built to connect the Eastern Freeway in Doncaster with the city centre via express bus lanes.

The government said it will establish a separate state-owned tolling company that will collect and own the toll revenue collected by the road, with the potential to sell the tolling rights to a private operator in future.

The current timetable calls for final expressions of interest to be submitted by May 2019, with requests for proposals to be issued in Q3 2019. Proposals will then be due in Q1 2020, with construction to start later that year.

The Victorian government committed billions of dollars in infrastructure spending prior to the election, including proposed borrowing of A$25.6 billion to help fund the A$15 billion Airport Rail Link as well as North East Link. It also promised to spend A$6.6 billion to extend its level crossing-removal programme and floated the prospect of pursuing a A$50 billion suburban orbital rail loop, although only A$300 million has been set aside for the latter project so far.

Its most recent budget in May confirmed funding of A$6.8 billion for the West Gate Tunnel road project and A$11 billion for the Melbourne Metro rail tunnel.