Article: Passive Victoria set to miss out on infrastructure billions

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Passive Victoria set to miss out on infrastructure billions

Passive Victoria set to miss out on infrastructure billions
Josh Gordon and Clay Lucas
July 5, 2011

VICTORIA is at risk of losing billions of dollars of federal infrastructure funding because the Baillieu government has failed to deliver a single major project proposal to Australia's independent infrastructure umpire.

In a report to state and federal governments, Infrastructure Australia also issues a blunt warning that it is ''very unlikely'' to support state government proposals for new freeways unless they are tolled.

The publicly funded but independent think tank, which makes recommendations to the federal government about funding of major projects, has received 59 submissions so far this year, with proposals from every state and territory except Victoria.

The report says the Baillieu government told Infrastructure Australia soon after the state election last November that it would assess the former Brumby government's infrastructure plans and then submit proposals.

But six months later, not a single major project proposal has been delivered, compared with nine from the New South Wales government, 13 from the Queensland government and seven from Western Australia.

''As at 6 June 2011, no new or revised project submissions have been presented by the Victorian government,'' the report says. The Age revealed last week that Treasurer Kim Wells had ordered his department to urgently get to work on an infrastructure ''pipeline'' after being warned Victoria could lose billions of dollars of investment and thousands of skilled workers to NSW, Queensland and elsewhere because of a lack of action.

Infrastructure Australia chairman Sir Rod Eddington said government reforms to infrastructure planning and delivery had been ''frustratingly slow'', dragging Australia's productivity below the average level for the developed world.

''Productivity has slowed as a direct result of infrastructure shortfalls - time lost in travel, delays at ports, lost production due to water restrictions,'' Sir Rod said.

The report identifies two projects in Melbourne as ''ready to proceed'' if there were federal funding available to pay for them.

The first is a modest $30 million plan to speed up trams and intensify development along the 86 route, which runs along High Street in Northcote and Preston.

The second is the much-debated Melbourne Metro, a $5 billion rail tunnel that would run from Footscray to the CBD and, in its second stage, to Caulfield. It was first proposed by Sir Rod in a study he did for the Brumby government.

The report found that if the Melbourne Metro were built, for every $1 spent on construction there would be an economic return of $1.30.

The report was cautious on the merits of a controversial east-west road tunnel from the Eastern Freeway to the Tullamarine Freeway, saying it should be considered only if there was joint funding from the Victorian government and a focus on container traffic from the Port of Melbourne.

In what would amount to a dramatic shift in federal funding, the report demands that state governments stop asking for funding for major freeway projects - unless they are tolled.

''Several submissions to Infrastructure Australia in the past year have continued to focus on the development of large urban motorways, presented as 'freight roads', when, in fact, 80-90 per cent of the projected traffic is expected to be private vehicles,'' the report says.

''In several cases the use of tolls to fund these roads was rejected. At the same time, the [state governments] have asked the Australian government to meet all or the great majority of the costs of these projects.''

But unless freeways through urban centres are tolled, the report says, Canberra should no longer consider funding them.

The report also calls for tolling on the nation's major highways - including the Hume - to be considered when big improvements are made.In Victoria, businesses are becoming tetchy about the government's failure to clarify its intentions on a range of transport proposals for Melbourne.

Mr Wells said the government's priority was to deliver its election commitments. But he said the Coalition was also beginning a ''new phase'' of infrastructure planning based on rigorous analysis to avoid past mistakes.

''The Coalition government is focused on ensuring that future infrastructure investments are properly planned and subject to a rigorous cost-benefit analysis,'' he said.

''We are progressively reassessing the projects previously announced.''

Shadow treasurer Tim Holding said the report made it clear the government's inaction was now costing the state in lost jobs, investment and higher productivity.

Read more: http://www.theage.com.au/victoria/passive-victoria-set-to-miss-out-on-infrastructure-billions-20110704-1gz69.html