2004.09.12

The federal conservatives in Australia (called the Liberal Party) supposed advocates of the market economy, low taxation and small government are doing their best to undermine one of the country's largest investor toll projects - the Mitcham-Frankston tollroad - in the run up to an election later this month. They have been denouncing the state Labor (left) government in Victoria, the second state, for plans to finance the Mitcham-Frankston Freeway (MFF) as a tollroad, and offering federal funds for the project only if it is built without tolls.

The tone of the argument is well captured in a press release from the federal minister for transport John Anderson on government letterhead (2004-04-29). It is headed: "Mark the mouse cowers over Scoresby." "Mark" there is Mark Latham the Labor challenger to Prime Minister John Howard in the forthcoming elections. "Scoresby" is an older name for one part of the Mitcham-Frankston tollroad project. He is accused of being a "mouse" for failing to take a position on the toll financing plan. Latham simply says the road will be a tollroad whoever is in power, or it won't get funded and built - the truth probably!

The politics of the thing is complicated by it having been started as free road with a small federal grant for extension of the Eastern Freeway. The extension was then wrapped into the larger north-south highway project by the state government.

The major theme of the conservatives is that the Victorian Labor premier "shattered the trust" of voters by moving toward toll financing - a broken promise. He is also said to be "shackling" eastern suburbs motorists with tolls.

The federal treasuer Peter Costello declared recently: "No Victorian can trust Mark Latham (federal labor leader). He will consign the people of Melbourne to pay tolls to use their freeway for the rest of their commuting lives. Anybody who wants to put a toll on the Scoresby freeway is not going to get any assistance from the Commonwealth (federal govt under the conservatives.)"

John Howard the prime minister has said nothing on the issue, leaving it to his treasurer and transport minister to score their political points. Privatization has generally been pursued by both parties at both state and federal levels - though in haphazard fashion.

The Howard Government promised to provide grants of $310m (A$420m), later upped to $405m (A$540m) but said this was conditional on the road being untolled.

The Victorian government was unmoved by this since it left it to find close to $1b ($1260m). And federal promises are easy to make if there is little chance of their being taken up!

There is little discussion of the merits or demerits of toll financing as such, just broken promise charges on the one side, and no-money-otherwise claims on the other.

40km $1,350m pike

The Mitcham-Frankston Freeway (MFF) is a permitted north-south highway close to the eastern periphery of the Melbourne metro area - pop 3.5m, second after Sydney. MFF is 40km (24mi) long, about northern half 2x3 lanes, the southern half 2x2 lanes. The design has a 1.5km (0.9mi) long pair of tunnels at its northern end to preclude the need to intrude on bushland and a creek. It will incorporate eight interchanges including Melbourne's first four level motorway to motorway interchange with mostly direct connector ramps - at the Monash Freeway junction.

Estimated construction cost is $1,350m (A$1.8b). The state Labor government which is sponsoring the project was anti-toll until it came to power. The same happened in New South Wales (Sydney's state) where the present premier Bob Carr came to power promising not only no more tolls but to get rid of existing tolls. Not only has he not gotten rid of tolls, he has sponsored a whole heap of new toll projects, and is popular for doing so.

The state Victorian premier Steve Bracks (Labor) announced Apr 14 2003 that the project would have to be financed with tolls and in May called for bids from investor groups for financing the road as part of a toll franchise.

Two major groups have submitted bids:

• ConnectEast led by Macquarie, also includes Theiss, Holland, Alstom and Hyder

• Mitcham-Franskston Motorway led by Transurban the Melbourne CityLink owner, and including Leighton, AbiGroup and Deutsche Bank

The ConnectEast group has promised to open the project up to the public to buy stock.

Final bids were made April 27 this year. It is unclear if the Victorian Government will announce the winner before or after the Oct 9 federal election.

They have said the bids are outstanding in quality.

The Victorian minister for transport Peter Batchelor has said that the private sector will build the Mitcham-Frankston project for about 10% less than it would cost under traditional bid-build public sector model, but the major attraction of toll franchising is that the private sector raises the funds and assumes the risks of the project, leaving taxpayers without those burdens.

Tolling is to be by transponder at highway speed or by video of number plates. No cash will be collected on the road itself.

The state minister in charge, Batchelor has said: "The federal government is playing politics with this issue, but it won't stop the state government getting on with this project and delivering it by 2008."

PERSONAL NOTE: The Australian Labor Party, Victorian Branch is the only political party your editor was ever foolish enough to join. He was expelled from that party at age 21 on a charge of "disloyal and unworthy conduct."

TOLLROADSnews 2004-09-12