The cost of the West Gate Tunnel project has blown out to $6.2 billion and the Victorian government wants motorists to pay tolls until 2045 to help foot the bill.
The new toll road was initially priced at $5.5 billion but will cost $1.2 billion more because it’s longer than first planned.
Construction is due to start in January after contracts were signed with builders CPB/John Holland and tolling company Transurban on Monday.
“If we don’t build this road, well, it’s unthinkable what will happen to our economy,” Premier Daniel Andrews said on Tuesday.
However, he and Treasurer Tim Pallas would not say how much Transurban are forecast to reap from the 10-year CityLink toll extension.
“The math I’ll leave for everybody to work out,” Mr Pallas added.
The opposition calculated the extended toll will pull in an extra $15 billion between 2035 to 2045 from CityLink alone.
Their sums are based on current earnings, an agreed 4.25 per cent increase a year between 2019 and 2029, and a forecast CPI of 2.5 per cent thereafter.
“This is a nonsense, back of the envelope calculation from the opposition that fails to recognise the value of this project to the economy, for jobs in this state and for Victorian commuters,” a government spokesman said.
Transurban will fund two-thirds of the road’s construction cost and in a statement, chief executive Scott Charlton said the tolls would be “fair”.
“By extending the CityLink Concession, Transurban is able to fund the majority of the West Gate Tunnel Project, and enable delivery within five years, freeing up taxpayer funds for other critical infrastructure projects,” he said.
“The concession extension won’t just been extended it will be strengthened … making the system fairer for everyone.”
But the opposition has described the deal as “a shocker”.
“Why should CityLink users have to pay higher tolls for a road on the other side of town that isn’t even open yet?” shadow treasurer Michael O’Brien told reporters.
Opposition Leader Matthew Guy will try to block the toll extension in the upper house.
But he will not stop the building of the road, because he is not in the business of ripping up contracts.
Labor did not take the project to the 2014 election but announced it shortly afterwards as a replacement for its planned $500 million western Melbourne truck off-ramp.
The government also spent more than $1 billion tearing up the contracts for the East West Link, which had been signed by a previous administration.
“The key difference is this project stacks up and the other one didn’t, and we’re not signing contracts five minutes before the election,” Mr Andrews said.