Builders and other private companies who block inner city arterial roads in Melbourne are set to pay up to $252 per day for each lane which they block as the Victorian Government seeks to minimise disruption from major construction projects.

In a decision announced last week, the Victorian Government said it would apply a Road Occupation Charge across an area covering 121 suburbs from Beaumaris in the south-west to Balwyn North in the East, Glenroy in the south-west and Kingsville in the west.

Set to be managed by the Department of Transport (DoT), the charge will apply where arterial roads are occupied or blocked by private companies for private use.

As per the DoT website, examples of when the charge will apply (examples only) include:

• where arterial roads are blocked off by developers or builders during construction of apartment complexes
• where lanes on arterial roads are closed to enable companies using advertising signs on private land to alter the content on such signs
• where demolition contractors close one or more lanes in order to raze a building.

The charge will apply where roads are occupied for private use only and do not apply to government funded projects such as level crossing removal projects.

The amount of the charge will vary according to the number of lanes being occupied, the length of time during which the lanes are occupied, the importance of the road and the value of the location to the community.

Depending on the location, it will be levied at between $173 and $232 per lane for each day in which the lane is closed.

Minister for Roads and Road Safety Jaala Pulford said the new charge would encourage private parties to minimise the number of times they need to block arterial roads and would help to free up traffic flow.

“Private construction companies blocking lanes on our arterial roads keeps Victorians in their cars even longer on their daily commute and has a serious impact on our economy,” Pulford said.

“We know how frustrating it is when construction clogs up important road space – the change will keep drivers moving, getting home sooner, every day.”

Citing a 2018 trial in the City of Yarra, Pulford said such a charge had slashed road occupation periods by 75 percent.

Already, Pulford says, most local government levy a charge on developers who set up construction equipment, scaffolding or worksites in traffic lanes.

The new charge would simply extend such arrangements to also cover arterial roads.

Building industry lobby groups slammed the new policy.

Master Builders Association of Victoria (MBAV) chief executive officer Rebecca Casson said the new charge would add to the cost of delivering housing and would create an additional burden for a sector which is critical for the state’s economy.

“While we acknowledge that all revenue collected will be re-invested into congestion-busting initiatives, this additional charge comes at a time when Victoria faces serious economic pressures,” Casson said.

“With the added uncertainty caused by the growing potential effect of coronavirus on costs and project delivery times, it makes no sense to impose yet another financial penalty that eventually hits every Victorian’s wallet.”

“It is already in the interest of builders to work as efficiently as possible because delays of any kind increase the cost of building and construction.

“Increased costs do not affect just the builder—they hit the taxpayer and the homeowner—and at a time when we can scarcely afford to make it harder to deliver projects for the growing numbers of Victorians who count on housing and infrastructure to live and conduct business.”

The levy will apply from April 1 this year.