Tuesday, July 17, 2012

Every major road a tollway?

FREEWAYS could be sold to the private sector and converted to tollways under a radical proposal for state governments to raise money for expensive new road and rail links.

The proposal, if adopted in Victoria, could lead to major roads such as the Eastern Freeway, the West Gate Freeway and the Western Ring Road being privatised and tolled.

Infrastructure Australia, the independent adviser to the federal government which has proposed the plan, says the proceeds could be used to build infrastructure such as hospitals, the Melbourne metro rail network, the missing link of Melbourne's outer ring road, and the proposed East West link under Melbourne's inner north.

But the plan, first proposed by a federal government and private sector working group headed by Treasury deputy secretary Jim Murphy, is being resisted by the Baillieu government.

A spokeswoman for Victorian Treasurer Kim Wells told The Age: "The Victorian government stands by its position that existing roads will not be tolled".

Infrastructure Australia, in a new report on ways to bring Australia's $700 billion infrastructure wish list to fruition, endorses radical options proposed by the working group and suggests states consider:

. Building all new major roads as tollways, not freeways.

. Breaking the narrow borrowing limits required for states' AAA credit ratings to build major new infrastructure projects, if analysis shows the benefits of having the infrastructure outweigh the benefits of having a AAA rating.

. Cutting costs for road freight links to ports by making them smaller and banning private cars from them making them simply toll roads for trucks and other commercial vehicles.

But Infrastructure Australia stopped short of endorsing the working group's idea that the federal government coerce the states by funding new roads only if they are built as joint ventures for eventual private ownership.

The rules currently require states to consider building new federally-funded roads as toll roads.

While the Baillieu government says it has no plans to toll existing roads, it has blocked the release of 27 documents on the issue, after a freedom of information request from The Age.

Mr Wells' spokeswoman said Victoria would not follow Queensland's example and allow its credit rating to be downgraded in order to build new infrastructure.

"We have made it pretty clear that we believe it's important that we retain our AAA credit rating," the spokeswoman said.

The Infrastructure Australia report comes as the Baillieu government ramps up plans to build the controversial East West Link (which was part of a broader transport plan drawn up for the previous Labor government in 2008 by Sir Rod Eddington) just days before the Melbourne byelection.

The Department of Transport has invited 100 local, interstate and international financiers and constructors from 50 companies to a meeting today to discuss how to finance and build the tunnel, which would run under the inner northern suburbs and provide non-stop connections between the Eastern Freeway, City Link and the Western Ring Road.

It is believed the meeting will canvass whether it should be a toll road, the financing options, construction methods, and whether it will include off-ramps into the city.

The tunnel proposal will be a key issue in Saturday's byelection which, in the absence of a Liberal candidate, has in effect become a two-way contest between Labor and the Greens.

The Greens are adamant that the road tunnel should not be built, but Labor's position is more nuanced. It opposes off-ramps to the city rather than the tunnel itself.

Transport Minister Terry Mulder said the road would be one of the most complex projects ever constructed in Victoria. "We are doing our due diligence to ensure that we consider the latest innovations in developing, delivering and funding projects in a challenging financial environment," Mr Mulder said.