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Federal Budget: Coalition sticks with “world class” East-West Link

Warren Truss

The Federal Budget delivered no major new spending for rail projects, including Inland Rail, but did maintain a $3 billion pledge for Melbourne’s discarded East-West Link tollroad project.

Despite calls from the industry, from the shadow minister for transport and infrastructure Anthony Albanese, and from several states, prime minister Tony Abbott and treasurer Joe Hockey stuck to their guns last night, in favouring urban road spending heavily over rail.

The only rail-centric projects featured in the Budget’s infrastructure spending were those with development already underway, having mostly been started by the former Labor Government.

These included continued funding for the Northern Sydney Freight Corridor in NSW, the Moreton Bay Rail Link in Queensland, and the five-year Freight Rail Revitalisation project in Tasmania.

But despite calls from the ARA and others for a bigger commitment to the Inland Rail project, no new funding was committed by the Federal Government.

Infrastructure minister Warren Truss nonetheless assured that Inland Rail remained a priority, with a promise that the Government would schedule further funding in later Budgets, beyond the existing $300 million commitment.

“Nationally, the Government is committed to lifting the economic performance of our rail freight network,” Truss insisted.

“Inland Rail remains a key commitment to boost our national productivity.

“The Australian Rail Track Corporation is continuing pre-construction work and the final business case, with the delivery plan expected mid-2015.”

Once that final business case has been delivered, Truss said the Government will be in a position to secure more funding.

Meanwhile, the Government reiterated Tony Abbott’s prior position, that any Victorian Government which backed the East-West Link tollroad project would be awarded $3 billion in funding from the Federal level.

Victoria’s new State Government, led by Daniel Andrews, famously scrapped the project after it was kicked off in the lead up to the last election by the former Liberal Government.

Critics of the East-West project have highlighted the poor cost-benefit ratio for the project, estimated in 2013 to be a return of 45 cents for every dollar invested. Project proponents insist that it is a road the city of Melbourne desperately needs. But in scrapping the plan, Premier Andrews made his opinion quite clear: the East-West was a bum steer.

It seems, though, that the Federal Government will not change its mind.

“Tonight the Commonwealth Government has reaffirmed its continuing commitment to the construction of Melbourne’s East West Link, despite the Victorian Government tearing up the project contract,” Truss said on Tuesday evening.

“The Commonwealth Government regards the much-needed East West Link as a project of national significance that will create thousands of jobs and reduce congestion for Victorians.

“The Commonwealth Government will provide $3 billion to the first Victorian Government willing to build the East West Link.”

Recorded in the Budget as a contingent liability, the funding essentially sits, stagnant, waiting for any Victorian Government to take it for the East-West.

“Clearly, the Victorian Government has abandoned responsible governance and created sovereign risk,” Truss opined, “which means the East West Link is being mothballed—delayed but not dead.

“The Victorian Government will waste over half a billion dollars not to build this world class project.

“But the East West Link may still be reinstated at a later date by a government willing to do the right thing by the people of Victoria.”

Truss demanded a return of the $1.5 billion of unspent funding for the project, “consistent with obligations under the Memorandum of Understanding” between Victoria and the Commonwealth.

Truss concluded: “The Commonwealth Government wants to invest in major infrastructure projects of national significance in Victoria should the Victorian Government come forward with credible options.”