'Congestion busting' billions referred to federal Auditor-General

A fund set up by the Morrison government that will pour almost $1 billion into transport projects in Victoria in seats held by the Liberal Party has been referred to the federal Auditor-General.

The federal opposition says the spending looms as a fresh sports rorts scandal.

Labor's cities and urban infrastructure spokesman Andrew Giles has asked the Auditor-General to investigate the government's Urban Congestion Fund, saying it is a "massive pork-barrelling" exercise that must be investigated.

Scott Morrison (centre) with Alan Tudge (left) and Jason Wood (right) at an infrastructure announcement ahead of last year's federal election.Credit: AAP

The federal government's cities and urban infrastructure minister, Alan Tudge, has defended the spending, saying the fund would ensure vital road projects got built. His spokesman pointed out that Labor made promises for dozens of projects in seats it held, or had hoped to win at last year's federal election.

In the lead-up to last May's election, Prime Minister Scott Morrison announced $3 billion in new money for the Urban Congestion Fund. The pledge added to the $1 billion already sitting in the fund, which was established to pay for new infrastructure in Australia's big cities.

In Victoria, the fund's promises included money for dozens of road expansions, $260 million to get rid of a Kooyong level crossing, and a $5 million study to remove a level crossing in Burnley.

Of the 54 projects in Victoria, 39 are in electorates held by the Liberal Party, four are across electorates held by a mix of Liberal and Labor MPs, one is in the Greens' seat of Melbourne, and the remaining 10 are in Labor seats.

In all, the promises for Victoria totalled $1.3 billion – with more than $900 million going to electorates held by the Liberal Party by margins of 10 per cent or less.

The fund included money for the expansion of 28 car lots at railway stations, many of which had little or no land where extra parking could be built without lengthy negotiation with the Victorian government, or councils.

And an apparent stand-off between Victoria and Canberra over the projects to get money has meant not one has started in Melbourne – despite the first tranche of the fund being announced two years ago. Works on one project, on the Hurstbridge railway line, are due to start this week.

In January, questioned as to why only three of the projects had started nationally, Mr Tudge told Nine News that this would soon change. "In 2020 we will have 70 under construction and by the end of this year we will have at least 28 completed."

Labor's Mr Giles said the extreme bias towards government-held seats was "a serious matter that needs to be examined by the Auditor-General".

Victoria's Department of Transport is using money from Canberra to pay for feasibility studies for the projects, so that their likely real cost can be worked out, along with when they can be built.

But some of the projects are being funded by Canberra working directly with councils to deliver them – meaning the Victorian government has no role in them at all. These include new car parking spaces at Ringwood, Heathmont, Glenferrie and Elsternwick railway stations.

A spokesman for Mr Tudge said the Urban Congestion Fund would fund 166 "crucial projects" across Australia. He said 70 projects would start construction this year, and that Canberra was working constructively with the Andrews government.

The federal government also argues the fund was only four per cent of $100 billion it is spending on infrastructure, and that when it was devised it took account of projects like the Victorian government's $2.2 billion Suburban Roads Package when deciding where money should be spent.

Marion Terrill is director of the transport and cities program at think-tank the Grattan Institute. She has done extensive research on infrastructure funding and cost overruns.

Her research has found that the biggest cause of cost overruns on infrastructure projects are "premature announcements" by both state and federal MPs.

"When oppositions or governments announce they are going to build one of these projects for a particular sum of money, but without actually committing the funds, the early cost promise often turns out to be spectacularly wrong," she said.

Her work has shown a total of a third of new infrastructure projects in Australia are announced in this way – before a formal funding commitment, and often in the lead-up to an election.

"But that third of projects, it accounts for three-quarters of the cost overruns," she said.