CityLink toll hike costs revealed under report on West Gate Tunnel deal

Updated March 19, 2019 16:39:38

By 2045, Melbourne drivers will pay nearly $100 extra a week to regularly use CityLink under the Victorian Government’s plan for toll increases on the roadway, analysis shows.

Key points:

  • Transurban was granted a 10-year toll extension on CityLink to 2044-45 to help fund the West Gate Tunnel
  • The report shows the tolls on the West Gate and CityLink would be worth $7.5 billion in today’s dollars
  • The Opposition said it was a “very, very poor deal” for CityLink motorists

A report by Parliament’s independent budget office says that, by 2044–45, some heavy users will have paid more than $51,000 to regularly use the tollway.

The data shows the cost of weekly tolls will jump from $82 now to $180 in 2044, the last year of tolls on CityLink.

The Andrews Government granted operator Transurban a 10-year extension of tolls on CityLink to 2044-45, to help fund the $6.7-billion West Gate Tunnel, which is under construction.

Under the deal, Transurban is spending $4 billion to build the West Gate Tunnel, along with a contribution from taxpayers.

Tolls on CityLink will increase by 4.25 per cent every year until 2029, then rise by CPI.

Labor had refused to say how much the deal would reap for Transurban.

What does the deal involve?

  • Transurban will provide $4 billion of the $6.7 billion cost of the West Gate Tunnel, with the Victorian Government to provide the rest
  • Tolls on CityLink would be extended by a decade until 2045, with fees to rise 4.25 per cent annually from 2019 to 2029
  • A requirement for Transurban to be compensated when the state builds other road projects would be scrapped

The report shows, by 2044-45, tolls on the new West Gate Tunnel and on the existing CityLink would be worth $7.5 billion in today’s dollars.

In nominal terms not adjusted for inflation, the report estimates toll revenue from the CityLink extension and new tolls on the West Gate Tunnel would generate $37.3 billion in 2044–45.

It shows motorists who use CityLink five days a week, for 48 weeks a year, will pay an extra $15,000.

“The present value of tolls paid by the intensive user to 2044–45 would rise from $36,227.80 to $51,873.60, in 2018-19 dollar terms, an increase of $15,645.90 or 43.2 per cent,” the report said.

‘Grand Theft Auto’: Opposition

Opposition Leader Michael O’Brien requested the report.

It says, in unadjusted terms, the West Gate Tunnel and changes to the CityLink concession would be expected to generate additional toll revenue of $37.3 billion by 2044-45.

“This is Labor’s Grand Theft Auto,” Mr O’Brien said.

“Who does a deal where Transurban puts in $4 billion and gets $37 billion out of it?”

The Upper House approved the toll extension 22 votes to 18 earlier this month, but other changes related to tolling on the new tunnel are still required.

Shadow Treasurer Louise Staley urged the crossbench to reject the changes.

“Now we’ve got [the] independent parliamentary budget office saying this is a bad deal for Victorian motorists,” she said.

“It is clear that this is a very, very poor deal for CityLink motorists who may not even be using this road.”

Government says project will give motorists choice

The Coalition is still hoping to block the legislation needed to set up the financial arrangements in an effort to stop the deal going through.

A bid from the Opposition and some crossbenchers to revoke the toll extension in Parliament failed earlier this month.

Transport Infrastructure Minister Jacinta Allan defended the Transurban deal and said the figures in the report were not new.

“Victorians will have a choice about how they use the West Gate Tunnel and that’s why this project is so important,” she said.

“We need to deliver this much-talked-about alternative to the West Gate Freeway.”

Topics: government-and-politics, parliament, state-parliament, community-and-society, urban-development-and-planning, business-economics-and-finance, road-transport, melbourne-3000, vic

First posted March 19, 2019 14:36:47

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