From Secret case for link revealed by Josh Gordon, The Age October 2, 2013

“It is a fraud on the Victorian people”

The financial case for the east-west link hinges on a prediction that toll road use will jump over the next 30 years because of rising wealth and shrinking petrol and CBD parking price rises.

A cabinet-in-confidence document, obtained by Fairfax Media, for the first time details key assumptions used to justify the $6 billion to $8 billion project, which the state government claims will produce a return of $1.40 for every $1 invested.

A discussion paper produced by VicRoads, the Linking Melbourne Authority, the Transport Department and Public Transport Victoria, reveals the government was able to boost its predictions for the road by as much as 15 per cent using a controversial assumption that time will be more valuable to future motorists because of rising wealth.

The report, used to prepare the highly secretive business case for the road, says the methodology “has not been used in any of [the Transport Department’s] other public transport projects or program modelling to date”.

Despite this, it says there is ”evidence to suggest that as the community’s wealth increases more people are prepared to pay tolls as they value their time more highly”. As a result, the business case assumes car drivers will be 1.4 per cent more willing every year to use toll roads over non-toll roads, while drivers of commercial vehicles will be 1.8 per cent more willing to pay tolls.

The document reveals that this assumption alone meant predicted traffic volumes were 15 per cent higher by 2031 than they otherwise would have been had the methodology not been used. “This is … inconsistent with initial modelling for the Eastern Freeway undertaken for the Doncaster Rail Feasibility Study,” it says. Continue Reading…