The Victorian Government’s dedication to the $15 billion first stage of the East-West toll road has transport planners scratching their heads. They have refused to release a business case for the project, a sure sign that shoddy forecasting forms the foundation of what promises to be the greatest misallocation of transport funds in Melbourne’s history.
There are plenty of reasons not to go ahead with the East-West toll road.
Most importantly, the proposal goes against the global trend of successful cities moving away from urban freeways and towards expansion of rail lines and the intensification of development along them. Detroit, the great US Auto City has just gone bankrupt, the largest city in US history to do so. When we think of great cities, we think of those with high quality, walkable neighbourhoods. Houston, Atlanta and LA rarely come to mind, but NYC, Paris and London frequently do.
Australian Bureau of Statistics census data for 2011 show Melburnians are shifting to public transport in record numbers, car use is beginning to stagnate and in some areas decline. This is a global phenomenon and one we should embrace, not resist.
Sir Rod Eddington produced a comprehensive technical evaluation of east west transport needs in Melbourne. Economic modelling performed for his report by Meyrick and Associates found the project would deliver a cost-benefit ratio of 0.7, meaning that for every $1 invested, only 70c is returned in economic gain. The government has hashed together a new figure of $1.40, without releasing any of the assumptions underlying the new calculation. One can only agree with transport academic Dr John Stone that these numbers are “mumbo-jumbo”.
Moreover, the Eddington Report found only a small fraction of the cars banked up on the Eastern Freeway are actually headed to the western region of Melbourne! Why build a tunnel to the west when the overwhelming majority of traffic is headed elsewhere?
Job creation appears to be a key motive for the project. The government frequently touts the 3200 jobs they expect to be created by the project, as though the East-West toll road would be somehow unique in its ability to create jobs. The fact is that any transport project costing as much as the East-West toll road creates about 3200 jobs.
We could say the same about the construction of rail projects. Given that Melbourne has not had a significant addition to its rail network since the 1930s, when its population was a little under a million (it’s now 4 million), this, not toll roads should be the government’s focus.
The Victorian taxpayer wears all the risk. Should toll revenue not be as high as forecast, the Victorian will be left to foot the bill, helping to prop up the private operator and their shareholders. This should have the taxpayer worried, given that Australian toll roads in recent history have consistently reported significantly weaker traffic volumes than forecast. The issue has become so contentious that some international transport consultancies refuse to undertake such forecasts, for fear of legal action against it should be prove inaccurate.
As the late transport academic Dr Paul Mees identified, should the government continue with its threat to go ahead with this project, funds will dry up for much more worthy projects, for a generation. Melbourne can ill afford to forgo the much needed expansion its public transport network that will be an inevitable consequence of the toll road.
No genuine public consultation has taken place. This is largely because the people that will have to live with the compulsory land acquisitions, years of construction disruption, overpasses, and exits flooding traffic onto local streets typically don’t vote Liberal. Clifton Hill, Collingwood, Carlton and Flemington residents typically vote Labor or Green. The Victorian Government has little regard for the determined community effort Melbourne residents in the inner north have mounted to try and protect their suburbs.
Petrol prices have hit highs not seen since 2008, when a barrel of crude cost $US148. Despite the weak global economic outlook, global oil prices at hovering above $US100 and Australians are set to experience more pain at the pump, exacerbated by the lower Australian dollar relative to the greenback. CSIRO forecast that petrol could cost anywhere between $2 to $8 per litre by 2018, one year before the east west road toll would be expected to be complete. The government should be left in no doubt that if CSIRO pricing window proof correct, the demand for urban freeways of the type proposed will be severely diminished and the Victorian taxpayer will be exposed to a huge bailout of the private operator.
If the Victorian Government wishes to improve transport options for Melbourne, its going to need to sharpen its pencil. Going ahead with this 1950s style mega project will kill funds for much more worthy and sustainable transport projects, expose the taxpayer to significant risk and perhaps most importantly, is unlikely to help solve troubles with Melbourne’s transport system.