Victorian Auditor-General, Des Pearson, has published a scathing review of the planned $2 billion Peninsula Link and Western Ring Road upgrades, questioning whether sufficient demand exists for their construction.

 

The report published by the Auditor-General’s office, questioned the estimated gains, saying that the benefits have been exaggerated and the costs marginalized in initial estimates.

 

The audit examined how effectively VicRoads and the Linking Melbourne Authority (LMA) managed a sample of major road projects including:

  • six of VicRoads major road projects, with capital costs that varied between $41 million for the Goulburn Valley Highway duplication, to $1.2 billion for the Western Ring Road upgrade
  • the Peninsula Link project, included in the Victorian Transport Plan with an expected cost of $750 million and subsequently developed and procured by LMA as a public private partnership.

 

The report found that 'VicRoads and the LMA have not been fully effective in developing the major road projects examined. Both agencies fell short of the standards required to reliably forecast traffic and estimate projects’ economic benefits when informing the decision to proceed.  LMA also had weaknesses in the way it had informed procurement decisions.'

 

The report found that both VicRoads and LMA had significant strengths in project development and engineering assessment, but lacked the ability to accurately forecast traffic and estimate demand for the road upgrade, which has lead to inaccuracies in assessing induced traffic increase, risk communications and estimated economic benefits.

 

The audit claimed ‘These shortcomings create a risk of overestimating the benefits and giving decision‑makers false confidence about the capacity of the project and the surrounding road network, to cope with future traffic. If these risks materialise then additional investment will be required to realise the benefits promised when justifying a project.’

 

The report concluded that the systemic weaknesses need to be addressed speedily so that decision-makers can ‘make a fully informed decision about whether to proceed with a project’.

 

The full report can be accesed here