CityLink owner Transurban set for extra $8bn from Andrews Government

EXCLUSIVE: THE Andrews Government is lining up to give CityLink owner Transurban an extra $8 billion, straight out of the pockets of Victorian motorists and businesses.

• CityLink toll road rakes in $7bn from Victorian drivers

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THE Andrews Government is lining up to give CityLink owner Transurban an extra $8 billion, straight out of the pockets of Victorian motorists and businesses.

This $8 billion is a windfall that would stay with motorists and trucking companies were the government to enforce a little-known clause in the contract that allows it to end tolling in 2025, rather than in 2035.

The clause, buried in the fine print of the original 1995 deal, gives the government authority to reclaim the roads network — the Burnley and Domain tunnels, Bolte Bridge and Tullamarine link — if the company’s profits reach a threshold. Transurban has denied that it will reach that super-profit benchmark before 2025.

The Andrews Government is lining up to give CityLink owner Transurban an extra $8 billion, straight out of the pockets of Victorian motorists and businesses. Picture: Jason Edwards

But any hopes motorists have for an end to tolling will be destroyed if the government proceeds with CityLink’s proposal for the Western Distributor project and extends the CityLink tolling franchise to 2045.

Not only would that cost at least $8 billion in 2025-35 that might have been saved, it would lock in at least $12 billion of extra tolls in 2035-45.

Speaking to the Herald Sun yesterday Jeff Kennett, the premier who did the original CityLink deal, called for an immediate, urgent, independent assessment of the original contract.

He said: “It’s critical to ensure that CityLink is not given an extra $8 billion that could otherwise stay with motorists or … (with) the government, if the tolls flowed to the government after 2025 instead of to CityLink and Transurban.

“That would be money that could pay for other roads and transport infrastructure — even the Western Distributor — or flow into the state’s hospital and schools.”

WESTERN DISTRIBUTOR UNDER THREAT DUE TO COMPLEX CITYLINK FUNDING DEAL

Jeff Kennett has called for an immediate, urgent, independent assessment of the original CityLink contract. Picture: Aaron Francis/The Australian

Mr Kennett called on Opposition Leader Mathew Guy to promise such a review if he won the next election.

And he argued the government was effectively colluding with Transurban so Victorians paid the maximum, rather than reasonable, tolls.

It was immoral, Mr Kennett said, that trucks would have to have pay hugely increased tolls way out of line with even regular annual increases agreed under the original deal.

Tolling is running at a huge $700 million a year, and rising. Almost all of that — more than $600 million — is gross profit, because running costs are so low.

But the profits would not reach the point of triggering the super-profit clause before 2025 if Transurban were to build the Western Distributor, because the money it spent would reduce its profitability.

So far, as the Herald Sun reported yesterday, Transurban has taken a huge $7 billion in tolls from motorists since CityLink opened on 2000.

But the really big pay-off lies ahead.

It will take at least that much again from motorists out to 2025, making at least $15 billion by then.

Add another $8-10 billion between 2025 and 2035; and perhaps $12-15 billion extra by 2045, and the total cost of tolling could easily reach $40 billion: a staggering $10,000 per Melburnian.

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Originally published as CityLink owner Transurban set for extra $8bn from Andrews Government