02.09.2021Optimising infrastructure to power Victoria’s economy
The release of Infrastructure Victoria’s (IV’s) latest 30-Year Infrastructure Strategy (the strategy) in August is welcomed by the Committee.
IV’s strategy is responsive to Victoria’s acute challenges associated with the recent catastrophic bushfires and COVID-19, and identifies opportunities to build long-term resilience and prosperity.
The strategy balances the need for capital investment with asset optimisation. Recommendations for major capital investments include City Loop reconfiguration, train line extensions in Melbourne’s outer north and west, Outer Metropolitan Ring Road preparation and road technology systems upgrades.
With the assistance of our members and stakeholders, the Committee made a submission to IV during its consultation period, which reinforced the Committee’s ambitious agenda.
Pleasingly, IV retained its recommendation for the Victorian Government to develop and publish Victoria’s integrated transport “in the next year”.
Published in 2020, the Committee’s Transporting Melbourne report calls on the government to design and publish an integrated transport plan, which considers land use and economic development concurrently.
Developing and implementing such a plan would help ensure Melbourne gives itself the best chance for continued growth and prosperity.
Committee CEO, Martine Letts, was a guest speaker at a recent CEDA forum to discuss the strategy and its implications for Melbourne and Victoria.
While reaffirming the Committee’s support for an integrated transport plan, Martine also took the opportunity to emphasise the importance of an overall strategy for infrastructure investment, including asset optimisation and contestability.
The economic and financial costs of the bushfires and COVID-19 make it critical for existing assets to be used wisely. When it is determined that a major piece of infrastructure should be considered to fulfil a specific need, governments need to provide a thorough assessment of its proposed value.
Conducting a business case is essential to ensure that the proposed piece of infrastructure is necessary and that there will be a return on investment.
Alternative options that could address the identified problem should be considered as part of the process, as well as rigorous, independent assessment of the proposals’ net benefit.
Too often we see projects in Victoria announced before a thorough business case has been conducted. If a detailed integrated transport plan were in place, infrastructure commitments could be assessed against the overall objectives of such a plan.
The Victorian Government has already committed to significant infrastructure expenditure on transport projects, including the Metro Tunnel, West Gate Tunnel and North-East Link, with a combined cost of $33.5 billion, as well as the Suburban Rail Loop slated at $50 billion. These projects alone will take a very long time to pay off and will consume finite resources.
Significant economic headwinds brought about geopolitical changes, climate change impacts and COVID-19 give reason to review all major infrastructure commitments. Full contestability and transparency on all infrastructure projects should be prioritised.
Taxpayers deserve to know that their dollars are being spent wisely and on projects which will improve productivity and ultimately, our liveability.
The Committee commends IV on the release of its second strategy and looks forward to viewing the Victorian Government’s response to the strategy. For further information contact Director of Policy and Research, Leanne Edwards, at ledwards@melbourne.org.au.