Melbourne rail network ‘fantasy’ map showing various proposed expansions of the network (seems to have ‘fantasy’ fare zones too; both major parties have promised to reduce the importance of zones from next year)

With less than a week to go to polling day, Labor’s looking like it will win Victoria’s state election comfortably. If so, it will need to think hard and imaginatively about how it can possibly deliver in full its signature promise to remove 50 of the most dangerous and congested level crossings in Melbourne.

Labor says it’ll take 8 years (two terms) and cost $5-6 Billion to grade separate the crossings. Funds will come from the sale/lease of the Port of Melbourne and from “capturing the value” of land made available for development by putting rail lines under roads.

The key benefits from removing 50 of Melbourne’s circa 170 level crossings include improved safety and faster travel times for cars, trucks, buses and trams. Another important benefit is higher train frequencies. (1)

There’s a range of issues that need to be considered in relation to Labor’s promise. I’ve discussed some of these before – they include doubts about whether removing crossings reduces congestion or merely shifts it to the next major intersection; whether the 50 crossings have been selected, or will be sequenced, to maximise community benefits or political convenience; and the lack of hard evidence showing the benefits of the program exceed the costs.

There are some key concerns though – related to cost and funding – that go directly to the question of whether or not a Labor government could deliver in full on this promise.

The first one relates to the cost of the program. The Government says the real cost of Labor’s promise is $8.5 Billion, but of course that’s not a disinterested assessment. However Labor’s Shadow Minister for Major Projects and Infrastructure, Brian Tee, agrees with the government.

In a submission to the public hearing on the East West Link in April, Mr Tee estimated the cost of removing the first 48 priority crossings is $8 Billion. Having to find an extra $2-3 Billion would make it a lot harder to honour the promise.

The second concern is that there’s no certainty the sale of the Port of Melbourne will yield all the revenue assumed by Labor. There’s also doubt about the timing of the revenue stream; setting up the disposal process is likely to be complex and time consuming.

Another concern is the design of grade separations is potentially fraught at the local level. These are major works that are likely to change their immediate surroundings substantially. Both the cost and the timing can be negatively affected by the demands of local communities.

The difficulty for an Andrews government is there’s no alternative source of funds that wouldn’t be at the expense of something else or wouldn’t come at an unacceptably high political cost. The works could theoretically be done faster and cheaper, but in our political culture governments find it very hard to say no; it’s easier to spend more even if the money isn’t there yet. (2)

Funding would also have to compete against the promised $0.7 Billion Mernda rail extension. Most of the funding though would be required in the second term when monies will also be needed to pay for the $9 Billion Melbourne Metro Labor has also promised. (3)

The flexibility of an Andrews government would be reduced further if it has to pay significant compensation for cancelling the East West Link contract. The possibility also remains that, if the current court case goes badly, a Labor government might ultimately decide it has to go ahead with the project in some form.

If it wins the election on Saturday as expected, I think it’s doubtful a Labor government will be able to remove all 50 level crossings over two terms, as promised. I think it’ll be challenging to complete even half that number.

It’s not an easy promise to fudge either. It would be hard to claim a “substantial start” on all uncompleted ones by the end of the period because level crossing works involve too much local disruption to traffic and businesses to be allowed to linger; once started, they have to be completed expeditiously.

That’s all a political problem that Mr Andrews can worry about if he becomes Premier; maybe the electorate would be satisfied with a show of serious effort or perhaps he could redefine the promise in the 2018 campaign. (4)

The key thing I’d like to see is the justification for doing all 50 over the next two terms compared to other potential investments. But given it’s a promise, I’d also like to see a serious prioritisation of the program so that the crossings with the highest benefits – especially in terms of permitting higher train frequencies – get done first.

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  1. Train frequencies are currently limited by the length of time motorists are prepared to tolerate closed boom gates.
  2. Labor emphasises the financial contribution from “value capture” but it’s likely to be very small relative to the cos
  3. Labor says it’ll build the Mernda extension in its first term at an est cost of $0.4-0.6 Billion; the Greens’ estimate for its version is $0.5 Billion. I’m going with the figure estimated by Treasury under the caretaker period policy costings process for the government’s version of the proposed Mernda extension i.e. $0.7 Billion (note: Labor has elected not to submit any proposals for costing under this process).
  4. Or maybe the public would  find so many works being done simultaneously so disruptive to traffic that they’d be petitioning the government to slow the program down.
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