Motorists to fork out $37 billion in Transurban tolls under West Gate Tunnel deal

Motorists will each be slugged $87,000 more to use CityLink over the next 25 years thanks to the state government’s deal with Transurban. Here’s why you’ll be paying more.

Regular users of CityLink will be slugged the equivalent of $180 a week by 2044 — up from the $82 today — under the state government’s West Gate Tunnel deal with Transurban.

Independent analysis of the Andrews Government’s deal with the tolling giant shows that it will reap an extra $37.3 billion in charges over the next two and a half decades.

The lion’s share — 71 per cent — of the extra tolls will be paid by motorists on CityLink, rather than those who use the new West Gate Tunnel.

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The complex deal, parts of which remain secret, will see:

• Transurban and the state split the cost of building the West Gate Tunnel, with the tolling giant covering $4 billion and the government $2.7 billion;

• tolls introduced on the tunnel when it opens in 2022;

• CityLink tolls extended from 2035 to 2045; and

• CityLink tolls increased annually by up to 4.25 per for that decade.

Work on the West Gate Tunnel is already underway in Melbourne’s inner west. Picture: Andrew Henshaw

The analysis by the Parliamentary Budget Office found that drivers who use CityLink every weekday for 48 weeks a year will have paid more than $161,000 by 2045.

That is $87,000 more than they would have coughed up without the Transurban deal.

Opposition leader Michael O’Brien said it was the worst deal for motorists in Victoria’s history.

“This is Labor’s Grand Theft Auto,” he said.

“Daniel Andrews is treating Victorian motorists like a broken pokie machine that only pays out.”

The report found that motorists would be stung by both the CityLink toll extension and the annual rise in charges.

“The impact of the changes to the CityLink concession would increase over time, largely driven by the compounding effect of the increased indexation of tolls and the 10-year extension of the toll concession,” it said.

“The present value of tolls paid by the intensive user to 2044-45 would rise from $36,227.8 to $51,873.6, in 2018-19 dollar terms, an increase of $15,645.9 or 43.2 per cent.”

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The Parliamentary Budget Office factored in the changing value of the dollar over the next two and a half decades, and concluded that the deal would net Transurban about $7.5 billion to 2045.

Shadow Treasurer Louise Staley said that was well above what the tolling giant would contribute.

“If we wanted to look at the net present value figure, which would be $7.5 billion, that is still a huge number above what Transurban will be putting in,” she said.

“This is a great deal for Transurban.”

Transport Infrastructure Minister Jacinta Allan repeatedly dodged questions on Tuesday about whether the deal was fair, saying there was “nothing new in the figures”.

She said the government had released several documents related to the “very important project for all of Victoria”.

Asked why full agreement with Transurban had not been made public, Ms Allan said: “There are some commercial elements that go to that deal but we have been transparent from the get-go.”

The opposition launched a bid to torpedo the controversial deal in parliament’s upper house earlier this month.

But the attempt failed when it failed to garner enough support on the large Legislative Council crossbench.

At the time, Premier Daniel Andrews defended the deal and said Victorians were sick of debating the project.

Premier Daniel Andrews previously said the toll agreement was a good deal. Picture: AAP Image/Daniel Pockett

“The key point here is that if users of the road don’t make a contribution towards funding the construction of the road, then that money would have to come out of hospitals and schools,” Mr Andrews said.

“That’s the basic math of this.”

But the Opposition has again called upon upper house crossbenchers and independents to block the deal.

If it was ripped up, “Transurban would be entitled to financial compensation from the Victorian government”.

The cost of building the already-underway tunnel would also fall to the government, posing a potential budget headache.

Ms Staley said the project could be funded through consolidated revenue and tolls on the new tunnel only.

“The government should not be tolling people who aren’t using it (the West Gate Tunnel) and handing a windfall to a private company,” she said.

“This is not the way to finance a road in the interests of Victorian motorists.”

The West Gate Tunnel will be built between the West Gate Freeway and CityLink, providing an alternative to the West Gate Bridge and easing congestion in the west of Melbourne.

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