ANNUAL REPORT 2009-2010 Published by Linking Melbourne Authority Building 1 Level 1 Brandon Business Park 540 Springvale Road Glen Waverley Victoria 3150 September 2010 Also published on www.linkingmelbourne.vic.gov.au © State of Victoria 2010 This publication is copyright. No part may be reproduced by any process except in accordance with provisions of the Copyright Act. Authorised by the Victorian Government 121 Exhibition Street Melbourne Victoria 3000

Printed on 100% recycled paper using waterless, carbon neutral printing with 100% renewable energy. Chairman’s report ...... 4 CEO’s report...... 5 Linking communities, jobs and opportunities ...... 6 Governance ...... 7 Our Board...... 7 Our people...... 8 Peninsula Link ...... 9 Project objectives...... 9 Contractual approval processes...... 9 Delivering Peninsula Link ...... 11 Keeping the community informed...... 11 WestLink ...... 12 Project objectives...... 12 Planning WestLink...... 12 Working with the community...... 13 EastLink ...... 14 EastLink in operation...... 14 Project enhancements...... 15 Supporting our people...... 16 Corporate Plan 2009 - 2013 ...... 16 People development strategy...... 16 Improving our systems and services ...... 16 Abbreviations ...... 16 Financial statements...... 17 Statutory information ...... 62 Disclosure index ...... 63 Related policies ...... 64 CONTENTS

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 3 CHAIRMAN’S REPORT David Buckingham

It has been an important year for the Linking Melbourne Authority (LMA) as we worked hard to get the Peninsula Link project underway, commenced planning for Melbourne’s next major road project, WestLink, and formally transferred the management of the EastLink contract to VicRoads.

I was delighted to be given the opportunity in 2009 to Linking Melbourne Authority formally succeeded chair the LMA board and, together with my fellow board Southern and Integrated Transport Authority (SEITA) members, am grateful to lead an Authority so with the passage of the Transport Integration Act 2010 experienced in the delivery of large transport projects. and now has an important role to play in the linking of people, communities and opportunities. This role is That experience certainly came to the fore as we being undertaken particularly in Melbourne’s west undertook the bidding process for Peninsula Link. where we are planning for a road tunnel linking the Port That it was completed so efficiently and thoroughly, in a of Melbourne precinct with West Footscray and a longer record time of just ten months, is a credit to all involved. term freeway connection to the Western Ring Road. I want to thank our staff and consultants for their WestLink is vital to Victoria’s liveability and prosperity, efforts, not only in the manner of their work but in and will provide an essential alternative to Melbourne’s pioneering the Availability Public Private Partnership West Gate Bridge. We have achieved a great deal in our (PPP) model for a road project in Australia. planning and consultation already and will continue to focus on developing a project that serves the growing The turning of the first sod for major works on the western community into the future. project by the Premier in February 2010 was the culmination of many months of effort, yet it also marked In closing, I would like to again thank my fellow board a new beginning for Peninsula Link. A beginning where members for playing their part in this new chapter of we see our project partner Southern Way and its LMA. I also want to acknowledge the LMA team that has construction company Abigroup take carriage of the welcomed us and delivered so well in our first year. project, and where we position ourselves to support the project delivery. We remain firmly focused on working David Buckingham with Southern Way to ensure a quality project is Chairman delivered for Victoria.

PAGE 4 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 CEO’S REPORT Ken Mathers

It has been a challenging, yet rewarding, year for the Linking Melbourne Authority as we welcomed a new board and, after two years in operation, handed responsibility for the EastLink concession to VicRoads.

The transfer of EastLink to VicRoads on 30 April 2010 Most importantly, we are working closely with the was a landmark occasion and allowed us to reflect on community to ensure local input into the project. We the achievements of the past seven years. In operation, look forward to being in a position to develop a preferred EastLink has proved to be one of Australia’s safest and project and achieve the required approvals in 2011. most attractive roads with motorists using the facility in record numbers. Of course, EastLink has always been In closing, I’d like to thank our Minister and Board for more than a road and our completion of pedestrian their guidance and governance during the year. I also bridges at Burwood Highway and Maroondah Highway thank the entire LMA team for their efforts in 2009-10 during the year has provided a boost for local cyclists and look forward to working together to build on our and pedestrians. ConnectEast is now achieving as much successes in the year ahead. success in operation as it did during construction, and Ken Mathers we congratulate them. We look forward to delivering Chief Executive Officer outstanding service centres on EastLink near Ferntree Gully Road in the upcoming year.

Whilst it is pleasing to look back with pride on EastLink, the team is now firmly focused on the delivery of the $759 million Peninsula Link. The tender process for this project was our key task during the year. Thanks to the expertise and dedication of our staff and consultants this was completed in a timeframe of ten months – a record for a major road PPP in Australia. We are excited about the proposal that Southern Way has put together for the project and will actively support them and their construction contractor Abigroup over the next three years. We face some big challenges to ensure the project meets the needs and expectations of the community, and have been working hard to both address sensitive environmental matters and ensure the community is well informed.

It has been great to see construction commence on Peninsula Link, particularly the strong progress being made on the Lathams Road bridge as part of the early works program. It is equally satisfying to see the development of the WestLink planning and consultation study, given the importance of this project to Victoria’s long-term future. We are working closely with other Government departments and Authorities to create a route for the project which supports a shared vision for Melbourne’s west as part of the Victorian Transport Plan. LINKING COMMUNITIES, JOBS AND OPPORTUNITIES

Purpose and priorities Government priorities – Victorian

Linking Melbourne Authority (LMA) is a State Transport Plan Government body responsible for overseeing the The Government released the Victorian Transport Plan planning and delivery of complex road projects. (VTP) in late-2008. Building on previous plans, the VTP LMA is successor at law to Southern and Eastern provides a detailed outline of the coordinated investment Integrated Transport Authority (SEITA), which adopted Victoria will make in road and rail transport to meet the the trading name Linking Melbourne Authority on challenges of population and economic growth. The VTP Wednesday 22 July 2009 to better reflect its ongoing role is a policy document that places unprecedented in delivering projects which link communities, jobs and emphasis on the need to build and maintain opportunities. relationships and seek community engagement in the Established in 2003, LMA has overseen the delivery formation and delivery of major projects. In this context, of some of Melbourne’s largest road projects. The LMA’s continuing leadership in using community $2.5 billion EastLink project was the largest in Australia consultation to inform on the planning and delivery of at the time of its delivery and LMA oversaw its projects will be at the forefront of its activities. The VTP construction and operation until transfer of the EastLink can be viewed at www.transport.vic.gov.au. Concession management to VicRoads in April 2010.

The SEITA Act was amended in May 2009 to allow LMA to take responsibility for any road transport-related project as declared by the Minister for Roads and Ports. The Authority is now focused on overseeing construction of the $759 million Peninsula Link project by Southern Way as an Availability PPP. This will complete the missing link in the Mornington Peninsula Freeway between Carrum Downs and Mount Martha and deliver travel time savings and economic benefits for the community. The LMA team also has responsibility for planning the WestLink project, Melbourne’s next major tunnel and road connection linking the Port of Melbourne precinct to the Western Ring Road.

PAGE 6 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 GOVERNANCE

Our Board LMA has a five-member Board appointed by the Governor-in-Council and responsible to the Minister for Roads and Ports. The Board provides strategic advice and governance.

David Buckingham - Chairman Shelley Penn David Buckingham served as Victoria’s Agent General in Shelley Penn was the Associate Victorian Government London for five-and-a-half years following a long and Architect until 2010, and is a former Design Director in varied career in Federal Government and the private the Office of the NSW Government Architect. Shelley has sector. He is a former Executive Director of the Business been a Director of her own practice for the past 18 years Council of Australia and Chief Executive Officer of the and is recognised within the profession for her Minerals Council of Australia. David was a Director of commitment to excellence in design. Shelley also the Menzies Centre for Australian Studies and has teaches and writes about architecture and has served on previously served on Boards including the Monash several juries and advisory bodies focused on Medical Foundation and Fulbright Foundation. David was architecture and urban design. She is Deputy Chair of recently made chair of the new Central City Standing the Victorian Heritage Council, an Australian Institute of Advisory Committee for Melbourne and is Principal Architects National Councillor and a Board member of Advisor to the Vice-Chancellor of Monash University. the National Capital Authority. Tony Darvall - Deputy Chairman Anna Skarbek Tony Darvall is a practising lawyer. He is Chairman of Anna Skarbek has experience as a lawyer and VicUrban, a member of the Ethics Committee of the investment banker, and is currently Executive Director Royal Melbourne Research Foundation, a Commissioner of ClimateWorks Australia, a non-profit partnership of the Essential Services Commission and Chairman of between Monash University and The Myer Foundation. the Maud Gibson Trust. Tony also served on the Board of She was previously Vice President of Advisory with the Melbourne CityLink Authority and SEITA. Climate Change Capital in London, a specialist investment banking group operating in the fields of Gary Liddle clean energy and carbon finance. Anna is a former Gary Liddle is a civil engineer and the current Chief executive with Macquarie Bank’s Investment Banking Executive of VicRoads, an organisation he has served for Group and policy advisor to the Deputy Premier of more than 38 years. Gary is Chair of Austroads, the Victoria. She has previously served on the Boards of Australasian organisation of road authorities and a Amnesty International Australia and The Big Issue Board Member of the Australian Road Research Board. Australia. He is also the Chair of the Australian Chapter of the Road Engineering Association of Asia and Australasia (REAAA), a member of the REAAA Governing Council and is a Board member of Roads Australia.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 7 Our people LMA people are dedicated to delivering high quality infrastructure projects and working closely with their stakeholders and the community.

Team capabilities cover a wide range of technical, Staff work under the guidance and direction of the commercial, legal, financial and communications skills. Board and maintain effective working relationships with The team is now managing the delivery of the $759 the Department of Transport, VicRoads and the Minister million Peninsula Link and the $10 million WestLink for Roads and Ports, as well as project stakeholders and planning and consultation study. the broader community.

Department of MINISTER FOR Transport ROADS AND PORTS

Department of CORPORATE SERVICES LMA BOARD Treasury and Finance Christine Whelehan - Director Corporate Services

Department of CHIEF EXECUTIVE OFFICER COMMUNICATIONS Premier and Cabinet Ken Mathers Jo Weeks - Director Communications

CHIEF OPERATING OFFICER COMMERCIAL AND LEGAL Geoff Rayner Brad Akers - Director Commercial and Legal

ENGINEERING AND PLANNING Les Bull - Project Director Peninsula Link Bill Hooker - Acting Director EastLink Bruno Aleksic - Director Planning

PAGE 8 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PENINSULA LINK

Peninsula Link is Melbourne’s newest freeway project, extending 27 kilometres from the end of EastLink in Carrum Downs to the Mornington Peninsula Freeway in Mount Martha. The $759 million project is expected to support around 4,000 jobs during its construction and provide a boost to the local economy and tourism industry.

Peninsula Link will slash travel times between Carrum • providing flexibility to improve public transport Downs and Mount Martha to around 17 minutes. It will services both within the project and on the enable motorists to travel from Melbourne’s CBD to surrounding transport network. Rosebud without encountering a traffic light. Motorists using the freeway will bypass eight signalised 2. Protect and enhance environmental sustainability intersections, one signalised rail crossing and five major whilst adhering to applicable government laws, roundabouts compared with the existing route. The guidelines and standards concerning environmental opening of Peninsula Link in early 2013 will see reduced protection (including noise, water and air quality). congestion on surrounding roads like the Frankston 3. Increase social amenity Freeway and Moorooduc Highway. along the corridor through high quality urban design, noise attenuation solutions Peninsula Link will have two traffic lanes in each and socially sensitive construction and operations direction, on and off ramps to 11 roads including three management. freeway to freeway connections and more than 35 4. Provide value for money bridges. It will feature a unique urban design, using for the State and road users vibrant colours around the bridges and earthy tones for through innovative design, optimum risk allocation noise and retaining walls. Around 1.5 million plants, between the project parties and a whole-of-life trees and shrubs will be planted along the project approach to the design and operation of the road. corridor. A new walking and cycling path will provide a 5. Engage with stakeholders to ensure transparent and huge bonus for locals. At 25 kilometres long, it will be efficient dealings with all parties associated with the the largest addition to Melbourne’s shared use path project. network since the EastLink Trail. 6. Timeliness Building on from the popularity of the public art on Deliver a fully operational Peninsula Link by early 2013. EastLink, Southern Way has established a partnership with the McClelland Gallery and Sculpture Park. This partnership will help put Frankston on the arts and cultural map, with local and international artists to be invited to design artwork for the freeway every two years. Contractual and approvals Project objectives processes Peninsula Link aims to achieve a great deal for Appointment of Southern Way Victorians and will provide a variety of opportunities to LMA oversaw the appointment of Southern Way in the Frankston and Peninsula regions over the long- January 2010 as the State’s private partner for term. The key objectives for Peninsula Link are outlined Peninsula Link in a landmark arrangement. The below: partnership was achieved in a record time of ten months 1. Deliver an integrated, safe and efficient transport and demonstrated the first use of the availability model network by: for a road project in Australia. • reducing travel times and improving travel time The appointment of Southern Way followed a highly reliability competitive bidding process with three consortiums • improving freight and commercial vehicle access shortlisted through an Invitation for Expressions of within the corridor Interest released in March 2009 and involving more than • reducing traffic congestion 30 meetings between LMA and the bidding parties. The • delivering the project and related traffic information three consortia shortlisted to submit bids for Peninsula systems Link were: Southern Way comprising Abigroup, Bilfinger • retaining flexibility for future enhancement of Berger Services Australia and the Royal Bank of Peninsula Link Scotland; ConnectSouth comprising John Holland, • integrating the project with the existing surrounding Fulton Hogan and the Macquarie Bank; and Connect11 transport network Partnership comprising Thiess, McConnell Dowell and the Commonwealth Bank.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 9 Final bids were received on 20 October 2009 and LMA This included a number of conditions such as the embarked on an intensive assessment process. An development of a Threatened Species Management Plan executive panel was formed supported by a technical and a Southern Brown Bandicoot Management Plan. panel, commercial panel and urban design panel. Each LMA has developed these documents to guide Southern panel undertook a rigorous assessment of the bids. Way during construction and ensure high quality After some clear differences were identified between environmental outcomes on the project. The Federal bids, LMA advised Connect11 on 9 November 2009 that Government approved the Threatened Species its bid was no longer under consideration. Following Management Plan in January 2010 and the Southern evaluation of the two remaining bids and their final Brown Bandicoot Management Plan in March 2010. offers being received, the Southern Way consortium was announced as the winning bidder on 15 January 2010 by A Cultural Heritage Management Plan was also Roads and Ports Minister Tim Pallas MP. Financial close developed and approved by Aboriginal Affairs Victoria in on the project was achieved on 8 February 2010, August 2009. Changes were also made to the local finalising all financial and contractual matters between planning schemes to accommodate Peninsula Link Southern Way and the State. The Project Summary following the approval of the EES. These changes were outlining the financial arrangements for the project was gazetted in August 2009. released on 4 May 2010 and can be viewed at Independent Reviewer www.partnerships.vic.gov.au. AECOM and Peter Balfe and Associates were jointly Statutory approvals and obligations appointed by LMA and Southern Way to the role of LMA obtained a number of required statutory approvals, Independent Reviewer in February 2010 following a outside the Environment Effects Statement (EES), tender process. The Independent Reviewer is responsible needed for the commencement of construction during for ensuring that all deed requirements are met during the year. Approval under the Commonwealth design and construction and will certify completion at the Government’s Environment Protection and Biodiversity end of the project. Peter Balfe is well placed to act as the Conservation Act 1999 was granted on 30 August 2009. Independent Reviewer having successfully undertaken this role on the award-winning EastLink project.

PAGE 10 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 Delivering Peninsula Link The land required for Peninsula Link has been licensed to Southern Way with the exception of three properties Construction is underway which will be available by December 2010 in accordance with the agreed schedule. The compulsory acquisition of Significant progress has been achieved on the properties is a sensitive matter and has been handled by construction of Peninsula Link since the Premier turned LMA’s staff in a professional manner. the first sod on the project’s main contract at Cranbourne Road in February 2010. Keeping the community informed Southern Way, and its construction contractor Abigroup, Keeping the community informed about design and have mobilised their project delivery teams and construction is a key focus. LMA is working closely with established a presence on the ground. A workforce of Southern Way and Abigroup to ensure effective more than 200 people are working in the field to fence construction communications, including a 24 hour the project area and commence clearing. More contact line and advance notification to the community construction personnel and subcontractors will of any works. progressively join the project as the main labour force comes on board. A highlight has been the opening of the LMA continued to maintain close contact with the local main Abigroup site office in Oliphant Way in Carrum community during the year responding to almost 900 Downs–the first of many sites that will house its emails, meetings and telephone calls with residents, workforce during construction. businesses and community groups. Regular e-updates were also sent to our email contact list which has more The main works undertaken by Southern Way and than 1,200 registered recipients. A number of mechanisms Abigroup have included detailed design and site have been established to keep local communities investigations, geotechnical testing, noise monitoring, involved and informed during construction, including: surveying and fencing of the project area, service relocations, clearing and grubbing and preparations for • Peninsula Link Info Hub – more than 300 people major earthworks later in 2010. Abigroup has also visited the hub in the three months since it opened in offered property condition surveys to all existing March 2010. Open three weekdays and one Saturday a dwellings located within 50 metres of construction prior month, visitors can view maps, engage with to the commencement of works. knowledgable staff, images and videos, and sample construction materials such as concrete panels for Early works at Lathams Road the noise walls and plans of the project area. Progress on Peninsula Link’s first bridge at Lathams Road is well advanced, with large embankments on • Community Advisory Group (CAG) – seven meetings of either side of the bridge clearly visible from the the CAG have been held since its establishment in late roadside. The $9.4 million overpass is being constructed 2009. The group plays an important role in facilitating by BMD Constructions as part of early work on the communications between the community and project project. Upon completion in early 2011, the overpass will team. Its members include Peninsula Link project allow construction vehicles to travel underneath it to parties, local government representatives, local access the Peninsula Link worksite. This will reduce the interest groups and five community representatives volume of construction traffic on local roads. from Frankston North, Frankston, Mount Eliza, Baxter and Moorooduc. Other milestones achieved on the bridge this year include construction of the ten metre central column, • Community information displays - more than 200 people piling works on the embankments and preparatory attended the first in a series of information displays at works to increase the flow capacity of Boggy Creek Baxter in late March 2010. People took the time to learn under Lathams Road. more about the project, talk to members of the project team and view a ‘4D’ model which allowed them to Property see how Peninsula Link will look in their area. LMA continued to acquire the land needed to build Peninsula Link during the year. With approximately 70 • Peninsula Link News – the first edition of Peninsula per cent of the land in Government possession, LMA Link News was distributed to households along the obtained all the approvals to make that land part of the corridor in early May 2010. It featured important Peninsula Link project area. LMA also undertook the community information including contact details for acquisition of 37 private properties, mainly consisting of Abigroup, a map of the project and details of the rural land at the southern end of the project. Peninsula Link CAG.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 11 WESTLINK

A $10 million, two-and-a-half year, planning and consultation study has begun on Melbourne’s next major road connection linking the Port of Melbourne precinct to the Western Ring Road. With an estimated 350,000 additional people expected to move into Melbourne’s west within the next 15 years, WestLink will help cater for future travel demand and reduce pressure on the West Gate Bridge.

WestLink will create a vital road connection for the • Provide positive outcomes for residential communities western suburbs, catering for a future where Melbourne in relation to noise, air quality and safety, and to is home to more than five million people. Together with minimise disruption during construction to residents, other transport projects in the west, it will significantly businesses and transport users. improve freight access to the Port of Melbourne and • Pursue opportunities to improve community reduce the number of trucks using local streets in the connectivity and cohesion, and to avoid or minimise inner west. the displacement of residents and businesses. • Protect and enhance the economic viability of the A key element of WestLink will be a road tunnel between surrounding areas and facilitate economic the Port of Melbourne and a commercial area in West development and renewal in the region. Footscray, running under the Maribyrnong River and the communities of Footscray and Seddon. The planning and • Protect or minimise impact on ecological values consultation study is also considering upgrades to within the project area, including habitat connectivity Dempster Street and Paramount Road and, in the longer- and species listed under relevant State and term, a road connection between the tunnel in West Commonwealth legislation. Footscray and the Western Ring Road in Sunshine West. • Protect and maintain waterway and floodplain function of the Maribyrnong River and Kororoit and Stony Creeks, including stability, stream flow, amenity, Project objectives in-stream habitat and water quality. The following objectives have been established to guide • Minimise impact on indigenous and European heritage the development of the project and will be used in sites. conjunction with the assessment requirements specified • Address the principles of ecologically sustainable by the Minister for Planning to evaluate the potential development, for example, incorporating climate effects of the project: change adaptation, facilitating the beneficial use of • Respond to increased transport demand due to future material from tunnel excavation and accommodating population growth in the west as set out in use of recycled materials, where practicable. Melbourne@5million and improve connectivity • Achieve net community benefit having regard to social, between the east and west of metropolitan economic and environmental factors. Melbourne. • Provide an alternative crossing of the Maribyrnong Planning WestLink River, to reduce over-reliance on the West Gate Bridge and the M1 corridor. Our studies have commenced • Reduce freight traffic and congestion on local streets The first milestone for the project was achieved in in the inner west of Melbourne, support development November 2009 when LMA awarded a contract to AGA of Footscray as a Central Activity District and enhance Joint Venture comprising leading Australian firms other key centres within the region. AECOM, GHD and Aurecon. AGA is providing a range of • Provide a critical link in the National Land Transport technical, planning, environmental and consultation Network, capable of accommodating the expected services to assist LMA to undertake the study. freight growth as outlined in the Freight Futures – Victorian Freight Network Strategy. Planning and consultation is well progressed with the • Integrate the project development with other transport first phase of the study culminating in the release of initiatives outlined in the VTP, in particular the key shortlisted route options in July 2010. public transport projects and walking and cycling plans. Other milestones achieved during the year include: • Formation of the Technical Reference Group (TRG) In response to applicable legislation and government comprising key Government agencies and authorities policy, a number of social, environmental and economic involved in overseeing the technical development of objectives have been developed: the planning study preparation. • Pursue a high quality urban design that enhances • Initial assessments across a range of specialist areas, visual amenity and integrates the development with including geotechnical, transport modelling, local landscapes. engineering, land use, environmental, heritage, social and economic issues.

PAGE 12 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 • Assessment of a broad range of route options against One workshop was publicly advertised and three were project objectives for presentation to the community attended by invited local residents, business people, for feedback. representatives of community organisations and • Project referral to the Department of Environment, corporate or ‘peak’ bodies. A summary of outcomes is Water, Heritage and the Arts (DEWHA) to assess available at www.linkingmelbourne.vic.gov.au. whether WestLink could impact on flora and fauna of national environmental significance under the • WestLink News – this was delivered to letterboxes in Environment Protection and Biodiversity Conservation the project area during March 2010 to keep people Act 1999 (the EPBC Act). DEWHA advised the project informed about progress with the planning and would be a controlled action due to potential impacts consultation study. WestLink News will be distributed on Australian Grayling, Golden Sun Moth and regularly throughout the planning study to keep the Derrimut Grasslands. community informed and involved.

A major focus of our planning continues to be • Online community survey – an online survey was coordination with other transport and land use projects launched in February 2010 to uncover the travel happening in the inner west. These include the Regional patterns of locals, what they value about their Rail Link, Truck Action Plan, M80 upgrade, Melbourne community and issues of importance in the west. Metro One and land use planning currently taking place The survey is one of the research activities being in the area. carried out for the WestLink Social Impact Assessment. The survey can be completed online at www.linkingmelbourne.vic.gov.au and has also been Working with the community translated and circulated to multicultural community LMA is working with the community to develop the best groups in the west. possible WestLink. We have maintained close contact To ensure this level of communication continues, LMA with the community during the year, responding to over has undertaken a series of public information displays 400 emails, meeting requests and telephone calls with and other consultation activities to coincide with the residents, businesses and community groups. release of potential route options in mid 2010 and will A comprehensive consultation program based around plan further displays with the announcement of a opportunities for genuine input into project planning is preferred route option for community input in the being implemented. Key consultation and second half of 2010. communications achievements during the year include: This will then be followed by the statutory • VTP Info Hub opening in Footscray – LMA joined with process by the Minister for Planning the Department of Transport and VicRoads to open the before project approval is VTP Info Hub in Footscray in December 2009. The Hub obtained in 2011. provides local communities with information on the major rail and road projects being delivered in Melbourne’s west. The Hub is located at 61 Irving Street in Footscray and opens Wednesday through to Saturday.

• Community Reference Group (CRG) – the WestLink CRG was established to ensure community issues and concerns are considered in the development of the WestLink project. The CRG includes representation from western councils, local businesses and interest groups and six community representatives for the areas of Melbourne, Maribyrnong, Brimbank and the outer west. Six meetings of the CRG have been held since January 2010.

• Community Values Workshops – around 100 people attended four workshops in Footscray during February 2010 to provide input into the development of WestLink. The workshops were part of early consultation to obtain feedback into community values and concerns to be considered in the project.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 13 EASTLINK

EastLink was Australia's largest urban road development during its construction. The $2.5 billion project was delivered by ConnectEast and its construction contractor Thiess John Holland. The project opened five months early in June 2008, providing a 39 kilometre north-south road connection between Ringwood and Frankston. LMA continued to manage the State's contract with EastLink private operator ConnectEast during the year, before the responsibility for its management was transferred to VicRoads on 30 April 2010.

EastLink in operation Completion activities There was a focus on finalising outstanding land matters Traffic and safety during the year with the revocation of the reservation During the 2009-10 financial year more than 61 million allowing for the formal granting of the EastLink Crown vehicle trips were made on EastLink with an average trip Lease. The team identified parcels of land surplus to length of around 13 kilometres, producing 796 million project requirements and formally declared EastLink vehicle kilometres of travel. The Average Daily Trips on and other local roads whose boundaries changed due to EastLink of 168,851 was 15.4 per cent higher for the the construction of EastLink. Changes were also period 27 July 2009 to 30 June 2010 compared to initiated to the various local planning schemes along the the prior comparative period. route to show EastLink as a road and remove redundant reservations. LMA also monitored progress with EastLink also proved to be one of remaining rectification works and reviewed proposed Australia's safest roads with amendments to operation and maintenance plans. 2.75 casualty accidents per 100 million vehicle Commercial management kilometres travelled The Second Amending Deed was executed between the this financial State and ConnectEast on 29 April 2010 – it sets out year. relevant changes to the EastLink Concession Deed. Some of the key changes include amendments relating to the EastLink service centres (see page 15) and a more streamlined and concise version of the key performance indicator regime.

The sites for eight advertising locations along EastLink were agreed to during the year and approvals were provided in November 2009. ConnectEast has since negotiated a contract with News Outdoor Media.

PAGE 14 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 Project enhancements

Burwood Highway pedestrian and cycling bridge EastLink service centres construction Following a public tender process, AA Holdings Pty Ltd This distinctive green and yellow bridge was officially (AA) was appointed to design, construct and operate two opened on 6 November 2009 by Shaun Leane MLC, service centres on the EastLink Freeway. LMA has Member for Eastern Metropolitan. Flanked by pets and finalised the relevant contractual documentation with AA their volunteer walkers, Mr Leane was the first to walk and ConnectEast, including execution of the agreement across the striking bridge. The Knox Community between LMA and AA, and the access and interface Volunteers held the inaugural 'Paws for a Cause' pet agreement between AA, ConnectEast and LMA. walk in Koomba Park and across the new bridge on Sunday 22 November 2009. The service centres will be built alongside the north and south-bound carriageways of EastLink between Ferntree Maroondah Highway pedestrian and cycling bridge Gully Road and Wellington Road near the Caribbean construction Gardens. They will create up to 400 local permanent jobs This bridge was officially opened by Minister for Roads and have been designed to match the world class standard and Ports Tim Pallas MP, together with students from of the EastLink motorway itself by featuring a striking Warranwood Primary School, on 13 November 2009. The green and orange design with extensive landscaping. The 40 metre high pedestrian bridge suspended by cables centres will include a new bridge over Dandenong Creek from a tower provides improved safety and access for and a cycling and walking path to connect into the EastLink local cyclists and pedestrians crossing the highway and Trail, giving locals access to the Dandenong Creek creates a stunning entry into Ringwood. Thousands of wetlands currently being developed by Melbourne Water. people use the EastLink walking and cycling trail every week and they will benefit from non-stop travel through Award winning consultation this area, including avoiding the existing signalised pedestrian crossing. LMA, together with its EastLink project partners ConnectEast and Thiess John Holland, took out the Heatherton Road Link in Dandenong award for community relations in the Annual Public The new link opened to traffic on 5 February 2010. Relations Institute of Australia (PRIA) Golden Target It provides improved access from Heatherton Road to Awards in October 2009. The Golden Target Awards Princes Highway and EastLink. The road was built in are Australia's premier public relations and response to local Council and community concern about communication campaign awards. The awards the lack of a direct connection from Heatherton Road to recognise excellence, best practice and Princes Highway and EastLink. Built at a cost of professionalism in public relations. $6.5 million, project delivery was managed for LMA by VicRoads.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 15 SUPPORTING OUR PEOPLE

We continued to focus on our people and ensure they have the right systems, services, learning opportunities and core values needed to achieve project outcomes. Key achievements during the year include:

Corporate Plan 2009 - 2013 Improving our systems and A new Corporate Plan was developed to respond to the services challenges and opportunities facing LMA and outline our Improving our governance systems has been a priority strategy for success over the next three years. The plan with the development of a new Governance Manual and is a result of several workshops with staff and aligns the establishment of the Finance and Risk and LMA objectives with those of the Government, Remuneration Committees. Tendering the Internal Audit particularly the VTP. function and developing an Administration Procedures Manual for bid evaluation have been other achievements.

People development strategy We continued to look at ways to improve our A people development strategy was created to ensure management of information during the year and LMA people are equipped with the right support and implemented an improved photo management database, development opportunities to implement our Corporate a new finance management system and upgraded our Plan. The people development strategy focuses on our document management system. people, our culture and our knowledge. The most significant factor that has underpinned LMA’s success to date is our people and this will continue to be the case. The people development strategy outlines a framework for ensuring that LMA has the values, behaviours, skills and knowledge necessary to deliver results.

ABBREVIATIONS AA - AA Holdings Pty Ltd AGA - AECOM GHD Aurecon CAG - Community Advisory Group CRG - Community Reference Group DEWHA - Department of the Environment, Water, Heritage and the Arts EES - Environment Effects Statement EPBC - Environment Protection and Biodiversity Conservation FRD - Financial Reporting Direction PPP - Public Private Partnership PRIA - Public Relations Institute of Australia LMA - Linking Melbourne Authority SEITA - Southern and Eastern Integrated Transport Authority VCAT - Victorian Civil and Administrative Tribunal VTP - Victorian Transport Plan

PAGE 16 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SOUTHERN AND EASTERN INTEGRATED TRANSPORT AUTHORITY

FINANCIAL STATEMENTS 30 JUNE 2010

CONTENTS Comprehensive operating statement ...... 18 Balance sheet ...... 19 Statement of changes in equity ...... 20 Cash flow statement ...... 21 Notes to the financial statements ...... 22 Accountable officer’s and chief finance and accounting officer’s declaration . .58 Auditor-General’s report ...... 60

The Financial Statements cover the Southern and Eastern Integrated Transport Authority (SEITA) as an individual entity.

The Southern and Eastern Integrated Transport Authority is a Victorian State Government Authority and is located at:

Building 1, Level 1 Brandon Business Park 540 Springvale Road Glen Waverley VIC 3150

A description of the nature of SEITA’s operations and its principal activities is included in the Annual Report.

For queries in relation to SEITA’s Financial Statements please call (03) 8562 6800.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 17 SEITA FINANCIAL STATEMENTS 2009-2010 Comprehensive operating statement for the financial year ended 30 June 2010

($ thousand) Note 2010 2009

Continuing operations Income from transactions Revenue State Government funding 2 15,410 24,089 Independent Reviewer 2 1,897 1,366 Interest 2 261 403 Procurement income 2 4,200 - Assets received free of charge 2 8,238 - Other income 2 190 570 Total income from transactions 30,196 26,428

Expenses from transactions Employee benefits 2 (4,961) (4,760) Independent Reviewer 2 (1,908) (1,366) Consultants 2 (3,942) (4,128) Occupancy expense 2 (789) (392) Depreciation and amortisation 2 (476) (324) Interest expense 2 (27) (20) Supplies and services 2 (8,774) (10,984) Total expenses from transactions (20,877) (21,974)

Net result from transactions (net operating balance) 9,319 4,454

Other economic flows included in net result Net gain/(loss) on non-financial assets 2 (1,391) (3,150)

Total economic flows included in net result (1,391) (3,150)

Comprehensive result – total change in net worth 7,928 1,304

The above Comprehensive Operating Statement should be read in conjunction with the accompanying notes.

PAGE 18 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010 Balance sheet as at 30 June 2010

($ thousand) Note 2010 2009 2009* Adjusted Assets Financial assets Cash and cash equivalents 3 8,503 13,253 13,253 Receivables 4 20,849 10,217 10,217 Prepayments 67 37 37 Accrued receivables from prior year – Adjustment* (4,255) Total financial assets 29,419 23,507 19,252

Non-financial assets Assets held for sale 5 - 7,414 7,414 Property, plant and equipment 7 843 2,888 2,888 Property acquired for roads 8 64,881 - - Works in progress 9 19,466 6,033 6,033 Intangible assets 10 1 17 17 Total non-financial assets 85,191 16,352 16,352 Total assets 114, 610 39,859 35,604

Liabilities Payables 11 3,681 4,338 4,338 Interest bearing liabilities 12 457 282 282 Provision for compulsory land acquisitions 13 7,146 2,343 2,343 Provision for employee benefits 14 1,632 1,422 1,422 Total liabilities 12,916 8,385 8,385

Net assets 101,694 31,474 27,219

Equity Accumulated surplus/(deficit) 21 (286,212) (289,885) (289,885) Accrued receivable from prior year – Adjustment* (4,255) Contributed capital 21 387,906 321,359 321,359

Net worth 101,694 31,474 27,219

Leases 16 Commitments 17 Contingent assets and liabilities 18

The above Balance Sheet should be read in conjunction with the accompanying notes. * See note 1(t)

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 19 SEITA FINANCIAL STATEMENTS 2009-2010 Statement of changes in equity for the financial year ended 30 June 2010

($ thousand) Note Equity as at Total Transactions Equity as at 1 July 2009 comprehensive with owners in 30 June 2010 result their capacity as owners Accumulated surplus/(deficit) 21 (294,140) 7,928 - (286,212) Contributions by other State Government entities 321,359 66,547 387,906

Total equity at end of financial year 27,219 7,928 66,547 101,694

Note Equity as at Total Transactions Equity as at 1 July 2008 comprehensive with owners in 30 June 2009 result their capacity as owners Accumulated surplus/(deficit) 21 (291,189) 1,304 (289,885) Accrued receivable from prior year – Adjustment (4,255) Contributions by other State Government entities 315,326 - 6,033 321,359

Total equity at end of financial year 24,137 1,304 6,033 27,219

The above Statement of Changes in equity should be read in conjunction with the accompanying notes.

PAGE 20 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010 Cash flow statement for the financial year ended 30 June 2010

($ thousand) Note 2010 2009 Cash flows from operating activities Receipts Receipts from State Government 6,457 44,044 Receipts from other entities 12,296 2,489 Goods and Services Tax recovered from the ATO (528) 1,237 Interest received 261 403 Total receipts 18,486 48,173 Payments Payments to suppliers and employees (28,470) (45,917) Goods and Services Tax paid to the ATO 0 (194) Interest and other costs of finance paid (27) (20) Total payments (28,497) (46,131) Net cash flows from/(used in) operating activities 20 (10,011) 2,042

Cash flows from investing activities Payments for land and infrastructure (17,145) (4,545) Proceeds for land and infrastructure 0 300 Payments for property, plant and equipment (368) (263) Net cash flows from/(used in) investing activities (17,513) (4,508)

Cash flows from financing activities Proceeds from capital contributions by State Government 22,599 4,545 Repayment of finance leases 175 (37) Net cash flows from/(used in) financing activities 22,774 4,508

Net increase/(decrease) in cash and cash equivalents (4,750) 2,042

Cash and cash equivalents at the beginning of the financial year 13,253 11,211

Cash and cash equivalents at the end of the financial year 3 8,503 13,253

The above Cash Flow Statement should be read in conjunction with the accompanying notes.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 21 SEITA FINANCIAL STATEMENTS 2009-2010 Notes to the financial statements Table of contents

Note Page

1 Summary of accounting policies 23

2 Income and expenses by nature and major activity 32

3 Cash and cash equivalents 35

4 Receivables 36

5 Assets held for sale 36

6 Investment properties 37

7 Property, plant and equipment 37

8 Property acquired for roads 38

9 Works-in-progress 39

10 Intangible assets 39

11 Payables 40

12 Interest bearing liabilities 41

13 Provision for compulsory land acquisition 41

14 Provision for employee benefits 42

15 Superannuation 44

16 Leases 44

17 Capital commitments 46

18 Contingent assets and contingent liabilities 47

19 Financial instruments 48

20 Reconciliation of comprehensive result for the period to net cash flows from operating activities 52

21 Movements in equity 53

22 Ex-gratia payments 53

23 Responsible persons 54

24 Remuneration of executives 55

25 Remuneration of auditors 55

26 Subsequent events 56

27 State initiated modifications and other works 56

28 Returned works 56

29 Going concern 56

30 Restructuring of administrative arrangements 57

PAGE 22 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 1: Summary of accounting policies

(a) Statement of compliance (c) Reporting entity The Financial Statements are a general purpose The Financial Statements cover SEITA as an individual financial report which have been prepared on an accrual reporting entity. SEITA ceased to exist on 30 June 2010 basis in accordance with the Financial Management Act and was replaced by its successor in law, the Linking 1994, Australian Accounting Standards (AAS), which Melbourne Authority, pursuant to section 134 of the includes the Australian accounting standards issued by Transport Integration Act 2010. the Australian Accounting Standards Board (AASB), Interpretations and other mandatory professional Its principal address is: requirements. Building 1, Level 1 The Financial Statements also comply with relevant Brandon Business Park Financial Reporting Directions (FRDs) issued by the 540 Springvale Road Department of Treasury and Finance, and relevant Glen Waverley VIC 3150 Standing Directions authorised by the Minister for Finance. The Financial Statements include all the controlled activities of SEITA.

(b) Basis of preparation The Financial Statements have been prepared on the (d) Objectives and funding basis of historical cost, except for the revaluation of SEITA’s primary objective is to oversee the construction certain non-financial assets. Cost is based on the fair and delivery to the State of the Peninsula Link Project value of the consideration given in exchange for assets. as a Private Public Partnership. Peninsula Link is a 27 kilometre freeway connection between EastLink and In the application of AAS, management is required to the Mornington Peninsula Freeway in Carrum Downs make judgements, estimates and assumptions about and the Mornington Peninsula Freeway in Mount carrying values of assets and liabilities that are not Martha. readily apparent from other sources. The estimates and associated assumptions are based on historical On 30 April 2010, SEITA passed the responsibility for experience and various other factors that are believed to management of the EastLink project for the remaining be reasonable under the circumstances, the results of 32 years of the concession to VicRoads. which form the basis of making the judgements. Actual results may differ from these estimates. SEITA has recently commenced work on a planning and consultation study relating to WestLink which forms The estimates and underlying assumptions are reviewed part of the State’s Victorian Transport Plan. This vital on an ongoing basis. Revisions to accounting estimates transport infrastructure project will initially be a tunnel are recognised in the period in which the estimate is under Footscray from east of the Maribyrnong River to revised if the revision affects only that period or in the west of Geelong Road. period of the revision and future periods if the revision affects both current and future periods. The Peninsula Link project is funded by the State and is delivered under an Availability PPP model. EastLink Accounting policies are selected and applied in a was predominantly funded by an allocation from the manner which ensures that the resulting financial State’s Better Roads Victoria Trust Fund. The WestLink information satisfies the concepts of relevance and study is funded jointly by the State and the reliability, thereby ensuring that the substance of the Commonwealth. underlying transactions or other events are reported.

The accounting policies set out below have been applied in preparing the Financial Statements for the period to 30 June 2010, and the comparative information presented for the year ended 30 June 2009.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 23 SEITA FINANCIAL STATEMENTS 2009-2010

(e) Scope and presentation of financial (f) Income from transactions statements Income is recognised to the extent that it is probable Comprehensive operating statement that the economic benefits will flow to SEITA and the Income and expenses in the Comprehensive Operating revenue can be reliably measured. Statement are classified according to whether or not Revenue from State Government funding they arise from ‘transactions’ or ‘other economic flows’. This classification is consistent with the whole of The State’s Better Roads Victoria Trust Fund, the government reporting format and is allowed under Commonwealth (for WestLink) and the State of Victoria AASB 101 Presentation of Financial Statements. (through the Victorian Transport Plan) provide funding to SEITA and revenue relevant to expenditure is recognised ‘Transactions’ and ‘other economic flows’ are defined by when expenditure is incurred. Funds are drawn down by the Australian system of government finance statistics: SEITA over the periods necessary to meet related concepts, sources and methods 2005 Cat. No. 5514.0 expenditure. published by the Australian Bureau of Statistics. Independent reviewer income ‘Transactions’ are those economic flows that are ConnectEast provides the funding for the Independent considered to arise as a result of policy decisions, Reviewer’s expense relating to the EastLink project. usually interactions between two entities by mutual agreement. Transactions also include flows within an Southern Way provides the funding for the Independent entity, such as depreciation where the owner is Reviewer’s expense relating to the Peninsula Link simultaneously acting as the owner of the depreciating project. SEITA recognises revenue, relevant to asset and as the consumer of the service provided by expenditure, when expenditure is incurred. the asset. Taxation is regarded as mutually agreed interactions between the Government and taxpayers. Procurement income Transactions can be in kind (e.g. assets provided/given Procurement income is recognised in relation to free of charge or for nominal consideration) or where providing to the private sector the right to build and the final consideration is cash. operate service centre facilities on the EastLink project.

‘Other economic flows’ are changes arising from market Assets received free of charge re-measurements. They include gains and losses from Contributions received free of charge or for nominal disposals, revaluations and impairments of non-current consideration are recognised at their fair value when physical and intangible assets. SEITA obtains control of them, irrespective of whether restrictions or conditions are imposed over the use of Balance sheet the contributions, unless received from another Assets and liabilities are presented in liquidity order government department or agency as a consequence of with assets aggregated into financial assets and non- a restructuring of administrative arrangements. In the financial assets. latter case, such a transfer will be recognised at its carrying value. Current and non-current assets and liabilities (those expected to be recovered or settled beyond 12 months) Other income are disclosed in the notes, where relevant. Amounts disclosed as other revenue are, where Statements of changes in equity applicable, net of returns, allowances and duties and taxes. Revenue is recognised for each of SEITA’s major The Statement of Changes in Equity presents activities as follows: reconciliations of each non-owner and owner equity opening balance at the beginning of the reporting period Rental revenue to the closing balance at the end of the reporting period. Rental income from the leasing of assets held for It also shows separately changes due to amounts sale is recognised on a straight-line basis over the recognised in the comprehensive result and amounts lease term. recognised in other comprehensive income related to Interest revenue other non-owner changes in equity. Interest revenue is recognised on a time proportionate basis that takes into account the Cash flow statement effective yield on the financial assets. Cash flows are classified according to whether or not they arise from operating activities, investing activities, or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows.

PAGE 24 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

(g) Expenses from transactions Land, earthworks and land under roads, which are considered to have an indefinite life are not depreciated. Employee benefits Depreciation is not recognised in respect of these assets Employee benefits expenses include all costs related to as their service potential has not in any material sense employment including wages and salaries, leave been consumed during the reporting period. entitlements, redundancy payments and superannuation contributions. These are recognised when incurred, Amortisation except for contributions in respect of defined benefit Intangible assets with finite useful lives are amortised plans. on a straight-line basis over the useful life of the asset. Amortisation begins when the asset is available for use, Superannuation that is, when it is in the location and condition necessary Defined contribution plans for it to be capable of operating in the manner intended Contributions to defined contribution superannuation by management. The amortisation period and the plans are recognised when incurred. amortisation method for an intangible asset, with a finite useful life, are reviewed at least at the end of each Defined benefit plans annual reporting period. In addition, an assessment is The amount charged to the Comprehensive made at each reporting date to determine whether there Operating Statement in respect of defined benefit are indicators that the intangible asset concerned is superannuation plans represents the contributions impaired. If so, the assets concerned are tested as to made by SEITA to the superannuation plans in whether their carrying value exceeds their recoverable respect to the current services of SEITA staff. amount. The following estimated useful life is used in Superannuation contributions are made to the plans the calculation of amortisation: based on the relevant rules of each plan. SEITA does not recognise any defined benefit liability Intangible assets 5 years in respect of the superannuation plans because SEITA has no legal or constructive obligation to pay Works-in-progress future benefits relating to its employees. Its only Works-in-progress is stated at cost and not depreciated. obligation is to pay superannuation contributions as Depreciation on work-in-progress commences when the they fall due. asset is ready for their intended use. The Department of Treasury and Finance administers and discloses the State’s defined benefit Interest expense liability or surplus in its Financial Statements. Interest expenses are recognised as expenses in the period in which they are incurred. Depreciation Depreciation is provided on the safety netting fence, Supplies and services property, plant and equipment and leasehold Supplies and services generally represent the day-to- improvements. Depreciation is calculated on a straight- day running costs, including maintenance costs, line basis so as to write off the net cost or other incurred in the normal operations of SEITA. These items revalued amount of each asset over its expected useful are recognised as an expense in the reporting period in life to its estimated residual value. Leasehold which they are incurred. improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. The following estimated useful lives are used in the calculation of depreciation:

Safety netting poles, cables and foundation 40 years

Plant and equipment 3 – 5 years

Motor vehicles 3 years

Leasehold improvements over the useful life of the lease

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 25 SEITA FINANCIAL STATEMENTS 2009-2010

(h) Other economic flows included in net result Receivables are recognised initially at fair value and Other economic flows measure the change in volume or subsequently measured at amortised cost, using the value of assets or liabilities that do not result from effective interest rate method, less any accumulated transactions. impairment.

Net gain/(loss) on non-financial assets A provision for doubtful receivables is made when there is objective evidence that the debts are uncollectible. Net gain/(loss) on non-financial assets and liabilities Bad debts are written off when identified. includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assets and intangible assets. (j) Non-financial assets Disposal of non-financial assets Non-current physical assets classified as held for sale Any gain or loss on the sale of non-financial assets is Non-current physical assets classified as held for sale recognised at the date that control of the asset is passed are measured at the lower of carrying amount and fair to the buyer and is determined after deducting from the value less costs to sell, and are not subject to proceeds the carrying value of the asset at that time. depreciation. Non-current physical assets, related Impairment of assets liabilities and financial assets are treated as current and classified as held for sale if their carrying amount will All assets are assessed annually for indications of be recovered through a sale transaction rather than impairment, except for financial assets and non-current through continuing use. This condition is regarded as physical assets held for sale. met only when the sale is highly probable and the If there is an indication of impairment, the assets asset’s sale is expected to be completed within twelve concerned are tested as to whether their carrying value months from the date of classification. exceeds their recoverable amount. Where an asset’s SEITA’s non-current physical assets held for sale have carrying value exceeds its recoverable amount, the arisen from its investment properties that have been difference is written-off as an other economic flow in the either acquired through hardship applications or surplus Comprehensive Operating Statement except to the land that is no longer required by the EastLink Project. extent that the write-down can be debited to an asset revaluation reserve amount applicable to that class of Intangible assets assets. Intangible assets represent identifiable non-monetary It is deemed that, in the event of the loss of an asset, the assets without physical substance. future economic benefits arising from the use of the Intangible assets are initially recognised at cost. asset will be replaced unless a specific decision to the Subsequently, intangible assets with finite useful lives contrary has been made. The recoverable amount for are carried at cost less accumulated amortisation and most assets is measured at either the depreciated accumulated impairment losses. Costs incurred replacement cost or the fair value less costs to sell, subsequent to initial acquisition are capitalised when it whichever is the higher. The recoverable amount for is expected that additional future economic benefits will assets held primarily to generate net cash inflows is flow to SEITA. measured at either the present value of future cash flows expected to be obtained from the asset or fair Acquisitions of assets value less costs to sell, whichever is the higher. The cost method of accounting is used for all acquisitions of assets. Cost is measured as the fair value of the assets given up or liabilities undertaken at (i) Financial assets the date of acquisition plus incidental costs directly Cash and cash equivalents attributable to the acquisition. Control is assumed by SEITA, in the case of land, when a Notice of Acquisition Cash and cash equivalents comprise cash on hand and is issued for land that is compulsorily acquired. cash at banks. Assets acquired at no cost, or for nominal consideration, For the purposes of the Cash Flow Statement, cash are initially recognised at their fair value at the date of comprises cash on hand and cash at bank. acquisition.

Receivables Property, plant and equipment Receivables consist predominantly of debtors in relation Property, plant and equipment are measured initially at to goods and services, accrued income and GST input cost less accumulated depreciation and impairment. tax credits recoverable.

PAGE 26 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Leasehold improvements Initially all costs directly associated with the acquisition The cost of leasehold improvements is capitalised as an of the land are capitalised into the acquisition cost. The asset and depreciated over the remaining term of the property is classified in this sub category of land until lease or the estimated useful life of the improvements, such time as a road is constructed and declared under whichever is the shorter. section 14 of the Road Management Act 2004. At this point in time the asset is re-classified as land under Revaluations of non-current physical assets declared roads. Non-current physical assets measured at fair value are Leased assets revalued in accordance with FRD 103D issued by the Minister for Finance. This revaluation process normally Leases of property, plant and equipment are classified occurs every five years, based upon the asset’s as finance leases whenever the terms of the lease Government Purpose Classification, but may occur more transfer substantially all the risks and rewards of frequently if fair value assessments indicate material ownership to the lessee. All other leases are classified changes in values. Revaluation increases or decreases as operating leases. arise from differences between an asset’s carrying value SEITA as lessee and fair value. Finance leases are recognised as assets and Revaluation increases are credited directly to equity in liabilities at amounts equal to the fair value of the the revaluation reserve, except to the extent that an lease property or, if lower, the present value of the increase reverses a revaluation decrease in respect of minimum lease payments, each determined at the that class of property, plant and equipment, previously inception of the lease. The lease asset is depreciated recognised as an expense (other economic flows) in the over the shorter of the estimated useful life of the net result, the increase is recognised as income (other asset or the term of the lease. Minimum lease economic flows) in determining the net result. payments are allocated between the principal component of the lease liability, and the interest Revaluation decreases are recognised immediately as expense calculated using the interest rate implicit in expenses (other economic flows) in the net result, the lease and charged directly to the Comprehensive except to the extent that a credit balance exists in the Operating Statement. Contingent rentals associated revaluation reserve in respect of the same class of with finance leases are recognised as an expense in property, plant and equipment, they are debited to the the period in which they are incurred. revaluation reserve. Operating lease payments, including any contingent Revaluation increases and decreases relating to rentals, are recognised as an expense in the individual assets within a class of property, plant and Comprehensive Operating Statement on a straight- equipment, are offset against one another within that line basis over the lease term, except where another class but are not offset in respect of assets in different systematic basis is more representative of the time classes. pattern of the benefits derived from the leased assets. Revaluation reserves are not normally transferred to accumulated funds on de-recognition of the relevant Peninsula Link Project asset. During the year, Southern Way was awarded the contract to build and deliver the Peninsula Link Non-current physical assets constructed by SEITA project. The component of the contract relating to The cost of non-current physical assets constructed by the design and construction of the road SEITA includes the cost of all materials used in infrastructure is accounted for by SEITA as a finance construction, direct labour, consultant costs on the lease agreement (note 16). project and an appropriate proportion of variable and fixed overheads.

Property acquired for roads Property acquired for roads includes property acquired directly or indirectly as a result of an intention to construct a road within the vicinity of the property, and which has not been transferred for an alternate use. Land acquired is measured initially at cost of acquisition and subsequently at fair value less any impairment. The valuation basis is consistent with the entire class of property, plant and equipment, except land under roads.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 27 SEITA FINANCIAL STATEMENTS 2009-2010

(k) Liabilities Current liability - unconditional LSL (representing 7 Payables or more years of continuous service for Victorian Public Service (VPS) staff and executives) is Payables consist predominantly of creditors and other disclosed as a liability even where SEITA does not sundry liabilities. expect to settle the liability within 12 months because it will not have the unconditional right to Payables are initially recognised at fair value and then defer the settlement of the entitlement should an subsequently carried at amortised cost and represent employee take leave within 12 months. liabilities for goods and services provided to SEITA prior to the end of the financial year that remain unpaid, and The components of this current LSL liability are arise when SEITA becomes obliged to make future measured at: payments in respect of the purchase of these goods and • present value - component that SEITA does not services. expect to settle within 12 months; and Interest bearing liabilities • nominal value - component that SEITA expects to settle within 12 months. Interest bearing liabilities are recorded initially at fair value, net of transaction costs. Subsequent to initial Non-current liability – conditional LSL (representing recognition, interest bearing liabilities are measured at less than 7 years of continuous service for VPS staff amortised cost with any difference between the initial and executives) is disclosed as a liability. There is an recognised amount and the redemption value being unconditional right to defer the settlement of the recognised in profit and loss over the period of the entitlement until the employee has completed the interest bearing liability using the effective interest rate requisite years of service. method. This non-current LSL liability is measured at present Provisions for land acquisition value. Provisions are recognised when SEITA has a present Employee benefits on-costs obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be Employee benefits on-costs (payroll tax, workers measured reliably. compensation, superannuation) are recognised and included with annual leave and LSL employee benefits. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account (l) Equity the risks and uncertainties surrounding the obligation. Contributions by owners Employee benefits Additions to net assets which have been designated as Wages, salaries and annual leave contributions by owners are recognised as contributed Liabilities for wages and salaries, including non- capital. Other transfers that are in the nature of monetary benefits and annual leave expected to be contributions or distributions have also been designated settled within 12 months of the reporting date are as contributions by owners. recognised in the provision for employee benefits in respect of employee services up to the reporting date, classified as liabilities and measured at their (m) Commitments nominal values. Commitments are disclosed at their nominal value and Those liabilities that are not expected to be settled inclusive of the Goods and Services Tax (GST) payable. In within 12 months are recognised in the provision for addition, where it is considered appropriate and provides employee benefits as liabilities, measured at present additional relevant information to users, the net present value of the amounts expected to be paid when the values of significant individual projects are stated. liabilities are settled using the remuneration rate expected to apply at the time of settlement.

Long service leave Liability for Long Service Leave (LSL) is recognised in the provision for employee benefits.

PAGE 28 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

(n) Contingent assets and contingent liabilities (p) Goods and services tax (GST) Contingent assets and contingent liabilities are not Income, expenses and assets are recognised net of the recognised in the Balance Sheet, but are disclosed by amount of GST, except: way of a note and, if quantifiable, are measured at • where the amount of GST incurred is not recoverable nominal value. Contingent assets and liabilities are from the taxation authority it is recognised as part of presented inclusive of GST receivable or payable the cost of acquisition of an asset or as part of an item respectively. of expense; or • for receivables and payables on the Balance Sheet which are recognised inclusive of GST. (o) Service concession arrangements The State enters into arrangements to design and The net amount of GST recoverable from, or payable to, construct or upgrade an asset used to provide public the taxation authority is included as part of receivables services. These arrangements are typically complex and or payables. Cash flows are included in the Cash Flow usually include the provision of operational and Statement on a gross basis. The GST component of cash maintenance services for a specified period of time. flows, arising from investing and financing activities, These arrangements are often referred to as either which is recoverable from, or payable to the taxation Public Private Partnerships (PPPs) or Service authority, is presented as an operating cash flow. Concession Arrangements (SCAs).

The SCA involves the State paying the operator over the period of the arrangement, subject to specified (q) Events after reporting date performance criteria being met. At the date of Assets, liabilities, income or expenses arise from past commitment to the principal provisions of the transactions or other past events. Where the arrangement, these estimated periodic payments are transactions result from an agreement between SEITA allocated between a component related to the design and other parties, the transactions are only recognised and construction or upgrading of the asset and when the agreement is irrevocable at or before balance components related to the ongoing operation and date. Adjustments are made to amounts recognised in maintenance of the asset. The former component is the Financial Statements for events which occur after accounted for as a lease payment. The upgrade the reporting date and before the date the statements component is accounted for as a capital commitment are authorised for issue, where those events provide and the operation and maintenance component is information about conditions which existed at the accounted for as a commitment for operating costs reporting date. Note that disclosure is made about which are expensed in the comprehensive operating events between the balance date and the date the statement as they are incurred. statements are authorised for issue where the events relate to conditions which arose after the reporting date The Peninsula Link Project which was awarded to and which may have a material impact on the results of Southern Way during the year is consistent with this subsequent years. form. Refer to note 16 for a detailed description of this Project.

There is currently no authoritative accounting guidance (r) Rounding of amounts applicable to grantors (the State) on the recognition and Amounts in the Financial Statements have been rounded measurement of the right of the State to receive assets to the nearest thousand dollars, unless otherwise from such concession arrangements. Due to the lack of stated. such guidance, there has been no change to existing policy and those assets are not currently recognised (note 16).

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 29 SEITA FINANCIAL STATEMENTS 2009-2010

(s) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2010 reporting period. The Department of Treasury and Finance assesses the impact of these new standards and advises SEITA of their applicability and early adoption where applicable.

As at 30 June 2010, the following standards and interpretations had been issued but were not mandatory for financial year ending 30 June 2010. SEITA has not adopted these standards earlier.

Standard / Interpretation Summary Applicable for annual Impact financial reporting periods statements beginning or ending on AASB 2009-5 Further Some amendments will result Beginning 1 Jan 2010 Terminology and amendments to Australian in accounting changes for editorial changes. Accounting Standards arising presentation, recognition or Impact minor. from the annual improvements measurement purposes, while project other amendments will relate [AASB 5, 8, 101, 107, 117, 118, to terminology and editorial 136 and 139] changes. Erratum General Editorial amendments to a Beginning 1 Jan 2010 Terminology and Terminology changes range of Australian Accounting editorial changes. Standards and Interpretations Impact minor. AASB 2009-12 Amendments to This standard amends AASB 8 Beginning 1 Jan 2011 Only editorial Australian Accounting Standards to require an entity to exercise changes arsing [AASB 5, 8, 108, 110, 112, 119, 133, judgement in assessing from amendments 137, 139, 1023 and 1031 and whether a government and to other standards, Interpretations 2, 4, 16, 1039 entities known to be under the no major impact. and 1052] control of that government are considered a single customer Impacts of editorial for purposes of certain amendments are operating segment disclosures. not expected to be This standard also makes significant. numerous editorial amendments to other AASs. AASB 2009-14 Amendments to Amendment to Interpretation Beginning 1 Jan 2011 Expected to have no Australian Interpretation – 14 arising from the issuance of significant impact Prepayments of a minimum Prepayments of a minimum funding requirement [AASB funding requirement Interpretation 14]

The following standards do not apply to SEITA in the 2009-10 financial year: • AASB 2009-8 Amendments to Australian Accounting Standards – group cash-settled share-based payment transactions (AASB 2). • AASB 2009-9 Amendments to Australian Accounting Standards – additional exemptions for first-time adopters (AASB 1). • AASB 2009-10 Amendments to Australian Accounting Standards – classification of rights issues (AASB 132). • AASB 2009-13 Amendments to Australian Accounting Standards arising from interpretation 19 AASB 1). • AASB 124 Related party disclosures (Dec 2009) • AASB 2009-14 Amendments to Australian Interpretation – Prepayments of a minimum funding requirement (AASB Interpretation 14) • AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12]

PAGE 30 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

(t) Correction of a prior period error The Financial Statements for 2008-09 and prior years included an accrual of Receivables of $4.255 million relating to land acquisitions for the EastLink Project. The land acquisition process for the EastLink project was managed on behalf of SEITA by VicRoads. VicRoads invoiced SEITA for land acquisitions based on the estimated total value. In 2004-05 this practice changed and SEITA was only invoiced when VicRoads made an actual payment. There can be a significant difference between the estimated and the final settlement of a land acquisition case. As a result SEITA had paid $4.255 million too much to VicRoads reflecting the difference in estimated and final settlements of land acquisition cases. In 2005-06 SEITA recognised a $4.255 million prepayment related to this, as agreed with VicRoads. SEITA adjusted the reported value of land acquisitions by $4.255 million and then wrote this back to nil as per the then prevailing accounting standards. SEITA's Receivables should have been reduced by $4.255 million in 2005-06 reflecting the fact that the recognition of the prepayment resulted in SEITA not requiring $4.255 million of State funding as this had already previously been recognised. This adjustment was however not made and the $4.255 million continued to be accrued as a Receivable in 2005-06 and following years. When EastLink was handed over to VicRoads in 2010 a final reconciliation was prepared and Receivables was adjusted. This has now been disclosed in the 2009 Adjusted Balance sheet. The adjustment does not affect SEITA’s cash balance.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 31 SEITA FINANCIAL STATEMENTS 2009-2010 -- 270 178 Total 11 119 179 3 261 403 (405) (330) 4,2008,238 - - 1,897 1,366 2010 2009 15,410 24,089 (4,556) (4,430) (4,961) (4,760) (1,908) (1,366) Land ------8119190570 ------(FBEES) Other Works Effects Statement Statement Effects (SIMS) and ------

($ thousand) ------8119 - - - - 270 - - - 178 - - 4,200 3 Project ProjectProject State Frankston 109 - 70 3 112 - 70 451 (405) - - (330) 1,769 - 128 1,366 Management Management Initiated By-Pass Acquisition 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 (1,769) - (139) (1,366) (3,711) - (845) (4,279) - (151) - - - - 19,188 - 7,771 11,952 - 2,199 2,369 8,741 868 3,536 30,196 26,428 (Peninsula Link)(Peninsula (EastLink) Environment Modifications Defect income Defect Sundry income Staff secondment Staff Rental income Rental Superannuation Salaries and wages Assets received free of charge free received Assets Other income 8,238 Note 2: Income and expenses by nature and major activity by nature and expenses Note 2: Income other income Total income Total transactions Expenses from benefits Employee benefits employee Total (4,116) - (845) (4,609) - (151) - - - - Independent Reviewer Interest 261--403------Continuing operations transactions from Income Revenue funding Government State Independent Reviewer Interest 8,808 income Procurement - 3,373 9,732 - 2,199 2,369 8,741 860 3,417

PAGE 32 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010 (10,984) Total - (392) (16) (73) (27)(27) (20) (20) (476) (324) (460) (251) (789) (392) (204) (249) 2010 2009 (2,393) (1,870) (6,177) (8,473) (1,544) (1,122) (2,398) (3,006) (3,942) (4,128) (8,774) Land (392) ------(FBEES) Other Works Effects Statement Statement Effects (SIMS) and

($ thousand) ------Project ProjectProject State Frankston (16) - - (73) (27) - - (20) Management Management Initiated By-Pass Acquisition (476) - - (324) (662) - (601) (1,532) - (1,474) (1,134) - (1) - (204) - - (249) (460) - - (251) (789) - - (392) 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 (Peninsula Link)(Peninsula (EastLink) Environment Modifications (1,285) - (1,446) (2,249) - (1,879) (1,210) - (1) - Contract and professional and professional Contract VicRoads (99) - (72) - - (45) (6,006) (8,428) - - Administration (1,969)Administration - (424) (1,747) - (123) - - - - Legal/Financial/Administration (623)Legal/Financial/Administration - (845) (717) - (405) (76) - - - Technical lease changes finance Interest expenses Travel Property, plant, and Property, 7 (b)) equipment (note Interest Expense Interest Total depreciation and amortisation depreciation Total Total Interest Expense Interest Total Supplies and services (27) - - (20) Amortisation intangible Amortisation intangible Note 2: Income and expenses by nature and major activity (continued) by nature and expenses Note 2: Income 10 (b)) (note assets Consultants Total consultants Total expense Occupancy Depreciation supplies and servicesTotal (2,272) - (496) (1,996) - (168) (6,006) (8,820) - -

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 33 SEITA FINANCIAL STATEMENTS 2009-2010 (21,974) Total 9 (28) 564 300 1,188 (2,491) 2010 2009 (3,152) (931) (2,491) Land ------564300 ----1,188 (FBEES) Other Works Effects Statement Statement Effects (SIMS) and

($ thousand) ------9 - - (28) Project ProjectProject State Frankston Management Management Initiated By-Pass Acquisition 8,454 - 4,845 996 - 1 (4,847) (79) 867 3,536 9,319 4,454 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 (2,257) - - - - - (3) - (892) (931) (2,248) - - (28) - - (3) - 860 (3,122) (1,391) (3,150) (Peninsula Link)(Peninsula (EastLink) Environment Modifications (10,734) - (2,926) (10,956) - (2,198) (7,216) (8,820) (1) - (20,877) Note 2: Income and expenses by nature and major activity (continued) by nature and expenses Note 2: Income transactions balance) (net operating included flows Other economic in net result on non-financial Net gain/(loss) assets flows other economic Total included in net result (note 20) result Comprehensive 6,206 - 4,845 968 - 1 (4,850) (79) 1,727 414 7,928 1,304 Net gain/(loss) from disposal from Net gain/(loss) of land Land and infrastructure written written Land and infrastructure back/(off) the for Additional costs of acquiring (for administration Link) or disposing (for Peninsula land EastLink) Total expenses from from expenses Total Net result from transactions transactions from Net result

PAGE 34 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Description of major activities (applied to note 2):

Project management SEITA has a major task to facilitate and administer development of the Peninsula Link Project on behalf of the State. Project management for Peninsula Link includes assets received free of charge. This is for land that was not previously recognised by any other State Entity and has now been recognised by SEITA at its fair value as SEITA is in control of this land. SEITA also had the task to facilitate and administer the development of the EastLink Project but this ceased on 30 April 2010 when the responsibility of the EastLink Project moved to VicRoads. WestLink is not included in this note as it is disclosed as Works In Progress (note 9).

Frankston By-Pass Environment Effects Statement (FBEES) SEITA was given the responsibility of conducting an Environment Effects Statement in relation to a possible future bypass of Frankston. The project commenced in the 2007-08 financial year and was completed in the 2008-09 financial year. SEITA has now commenced work on delivering the Peninsula Link project for the State.

State Initiated Modifications (SIMS) and other works During the 2009-10 financial year, SEITA managed works adjacent to EastLink that have been constructed by various contractors.

Land acquisition Land has been acquired, reserved and licensed to ConnectEast for the purpose of constructing EastLink. Properties associated with EastLink that are identified as hardship cases or considered surplus to the construction requirements of EastLink, have been acquired and are held as assets held for sale. Following completion of construction, these assets were sold or transferred to VicRoads. Land acquired for Peninsula Link has not been included, but has been disclosed as Property acquired for roads (note 8).

Note 3: Cash and cash equivalents ($ thousand) 2010 2009 Total cash and cash equivalents disclosed in the Balance Sheet 8,503 13,253 Cash and cash equivalents at the end of the financial year as per Cash Flow Statement 8,503 13,253

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 35 SEITA FINANCIAL STATEMENTS 2009-2010

Note 4: Receivables ($ thousand) 2010 2009 Current receivables

Contractual Trade debtors 164 648 164 648 Statutory Goods and services tax receivable 1,245 717 Accrued income – project management Peninsula Link 19,237 - Accrued income – Independent Reviewer Peninsula Link 226 - Accrued income – project management EastLink - 389 Accrued income – land acquisitions EastLink - 6,671 Accrued income – WestLink (23) - Accrued income – SIMS and other works - 1,712 Accrued income – FBEES -80 20,685 9,569

Total current receivables 20,849 10,217 Accrued Receivable from Prior Year – Adjustment (4,255) 5,962

SEITA allows for 30 day terms on its receivables. SEITA has no doubtful debts and no bad debts were written off. (a) Ageing analysis of receivables Please refer to Note 19 for the ageing analysis of receivables. (b) Nature and extent of risk arising from receivables Please refer to Note 19 for the nature and extent of credit risk arising from receivables.

Note 5: Assets held for sale ($ thousand) 2010 2009 Balance at beginning of financial year 7,414 - Transferred from investment properties (note 6) - 7,414 Additions 1,075 - Written down value of properties disposed/sold (4,916) Transferred to properties acquired for roads (note 8) (1,800) Transferred to VicRoads via Allocation Statement (1,773) Balance at end of financial year - 7,414

Assets held for sale relate to investment properties held by SEITA. These properties were disposed of in the 2009-2010 year. SEITA earned rental income from its assets held for sale. This is shown in Note 2.

PAGE 36 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 6: Investment properties ($ thousand) 2010 2009 Balance at beginning of financial year - 7,414 Additions -- Net gain from fair value adjustments - - Transfer to assets held for sale (note 5) - (7,414) Balance at end of financial year - -

Investment properties have come into the hands of SEITA through either an acquisition to satisfy hardship cases involving property directly adjacent to EastLink or land that has become surplus to the construction of EastLink.

SEITA utilises the fair value basis in accounting for investment properties.

SEITA has transferred its investment properties into assets held for sale as it planned to dispose of these properties in the 12 months following 30 June 2009.

Note 7: Property, plant and equipment Classification by ‘Transportation and Communications’ Purpose Group

(a) Carrying amounts ($ thousand) 2010 2009 Sub-classification by nature

Buildings: Leasehold improvements - at cost 1,725 1,650 Less: accumulated amortisation (1,501) (1,249)

Safety netting fence* At cost - 2,048 Less: accumulated depreciation - (51)

Plant, equipment and vehicles: At cost 1,163 926 Less: accumulated depreciation (544) (436) Net carrying amount of property, plant and equipment 843 2,888

* The safety netting fence was erected to ensure that golf balls from an adjacent golf course do not stray onto EastLink causing property damage or injury to motorists. The safety netting fence was transferred to VicRoads in 2010.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 37 SEITA FINANCIAL STATEMENTS 2009-2010

Note 7: Property, plant and equipment (continued)

(b) Movements in carrying amounts ($ thousand) Leasehold Safety Plant, equipment improvements netting and vehicles at cost fence at cost Total 2010 2009 2010 2009 2010 2009 2010 2009 Opening balance 401 - 1,997 2,048 490 504 2,888 2,552 Additions 75 470 - - 394 288 469 758 Disposals - - (1,954) - (100) (171) (2,054) (171) Depreciation expense (note 2) (252) (69) (43) (51) (165) (131) (460) (251) Closing balance 224 401 - 1,997 619 490 843 2,888

Property, plant and equipment are classified primarily by the ‘purpose’ for which the assets are used, according to one of six ‘Purpose Groups’ based upon Government Purpose Classifications (GPC). All assets within a ‘Purpose Group’ are further sub-categorised according to the assets ‘nature’ (i.e. buildings, plant and equipment etc), with each sub- category being classified as a separate class of asset for financial reporting purposes.

(c) Aggregate depreciation recognised as an expense during the year ($ thousand) 2010 2009 Buildings 252 69 Safety netting fence 43 51 Plant, equipment and vehicles 165 131 460 251

Note 8: Property acquired for roads ($ thousand) 2010 2009 Balance at beginning of financial year - - Land transferred from assets held for sale (note 5) 1,800 - Land allocated as Contributed capital from other government authorities 40,278 - Additions 14,565 - Net gain/(loss) from fair value adjustments 8,238 - Balance at end of financial year 64,881 -

Property acquired for roads relates to land acquired for the purpose of constructing the Peninsula Link project.

PAGE 38 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 9: Works-in-progress Classification by ‘Transportation and Communications’ Purpose Group

(a) Carrying amounts ($ thousand) 2010 2009 Works-in-progress: Works-in-progress - at cost 19,466 6,033

Net carrying amount of works-in-progress 19,466 6,033

(b) Movements in carrying amounts ($ thousand) Works-in-progress Works-in-progress Total (Peninsula Link) (WestLink) 2010 2009 2010 2009 2010 2009 Opening balance 6,033 - - - 6,033 - Additions 9,456 6,033 3,977 - 13,433 6,033 Closing balance 15,489 6,033 3,977 - 19,466 6,033

Note 10: Intangible assets

(a) Carrying amounts ($ thousand) 2010 2009 Software at cost 253 253 Website development at cost 152 152 Less: accumulated amortisation (404) (388) Total intangible assets 117

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 39 SEITA FINANCIAL STATEMENTS 2009-2010

Note 10: Intangible assets (continued)

(b) Movements in carrying amounts ($ thousand) Software Website development Total 2010 2009 2010 2009 2010 2009 Opening balance 14603 301790 Additions ------Disposals ------Amortisation expense (note 2) (13) (46) (3) (27) (16) (73) Closing balance 1 14 0 3 1 17

Note 11: Payables ($ thousand) 2010 2009 Contractual - current Trade creditors – project management Peninsula Link 866 - Trade creditors – project management EastLink 2 1,422 Trade creditors – SIMS and other works 71 1,208 Accrued expenses – project management Peninsula Link 2,642 - Accrued expenses – project management EastLink - 1,231 Accrued expenses – WestLink 100 - Accrued expenses – SIMS and other works - 401 3,681 4,262 Statutory - current Trade creditors – land acquisition EastLink - 54 Accrued expenses – land acquisition EastLink - 22 Total payables 3,681 4,338

SEITA allows for 14 day terms on its payables. (a) Maturity analysis of payables Please refer to Note 19 for the ageing analysis of payables. (b) Nature and extent of risk arising from payables Please refer to Note 19 for the nature and extent of risk arising from payables.

PAGE 40 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 12: Interest bearing liabilities ($ thousand) 2010 2009 Current Secured: Finance lease liabilities (i) (note 16) 191 79 Total current interest bearing liabilities 191 79 Non-current Secured: Finance lease liabilities (i) (note 16) 266 203 Total non-current interest bearing liabilities 266 203 Total interest bearing liabilities 457 282

(i) Secured by the assets leased.

(a) Maturity analysis of interest bearing liabilities Please refer to Note 19 for the ageing analysis of interest bearing liabilities. (b) Nature and extent of risk arising from interest bearing liabilities Please refer to Note 19 for the nature and extent of risk arising from interest bearing liabilities. (c) Defaults and breaches During the current and prior year, there were no defaults and breaches of any of the loans.

Note 13: Provision for compulsory land acquisition ($ thousand) Peninsula Link EastLink Total 2010 2009 2010 2009 2010 2009 Balance at beginning of financial year - - 2,343 20,392 2,343 20,392 Land acquisitions invoiced during the period (6,887) - (945) (20,429) (7,832) (20,429) Revision of estimate provision for compulsory land acquisitions 14,033 - (113) 2,380 13,629 2,380 Transferred to VicRoads via allocation statement - - (1,285) - (1,285) - Provision for compulsory land acquisition 7,146 - - 2,343 6,855 2,343

The provision for compulsory land acquisition represents the remaining ‘estimate’ of land costs to complete the acquisition of land required for the completed EastLink Project and Peninsula Link Project. The land acquisition process for EastLink is managed on behalf of SEITA by VicRoads. Land Acquisition for Peninsula Link is being undertaken by SEITA.

By nature the estimate of this provision will continually be revised throughout the life of the Project as new information becomes available and settlements occur. It is expected that this would generally be due to changes in the land requirements of the Project and ongoing revisions in the final settlement value of properties.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 41 SEITA FINANCIAL STATEMENTS 2009-2010

Note 14: Provision for employee benefits ($ thousand) 2010 2009 Current Employee benefits (i) Unconditional and expected to be settled within 12 months (ii) 350 299 Unconditional and expected to be settled after 12 months (iii) 897 810 1,247 1,109

Provisions related to employee benefits on-costs Unconditional and expected to be settled within 12 months (ii) 58 51 Unconditional and expected to be settled after 12 months (iii) 152 139 210 190

Total current provisions 1,457 1,299

Non-current Employee benefits (i) 152 107 Provisions related to employee benefits on-costs 23 16 Total non-current provisions 175 123 Total provisions 1,632 1,422

Note: (i) Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by employees, not including on-costs. (ii) The amounts disclosed are nominal amounts. (iii) The amounts disclosed are discounted to present values.

(a) Employee benefits and related on-costs ($ thousand) 2010 2009 Current employee benefits Annual leave entitlements 323 265 Unconditional long service leave entitlements 924 844 Non-current employee benefits Conditional long service leave entitlements 152 107 1,399 1,216 Current on-costs 210 190 Non-current on-costs 23 16 233 206 Total employee benefits 1,632 1,422

PAGE 42 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

(b) Movement in provisions (on-costs) ($ thousand) 2010 Opening balance 1 July 2009 206 Additional provisions recognised 27 Unwind of discount and effect of changes in the discount rate - Closing balance at 30 June 2010 233

Current on costs 210 Non-current on-costs 23 233

Current employee benefits comprise all annual leave entitlements as well as long service leave entitlements representing 7 plus years of continuous service.

As explained in Note 1(k) the amount for long service leave is measured at its present value. The following assumptions were adopted in measuring present value:

2010 2009 Weighted average rates of increase in annual employee entitlements to settlement of the liabilities 4.9% 5.1% Weighted average terms to settlement of the liabilities 15 years 15 years

Employee numbers 2010 2009 The number of employees as at 30 June 2010. 42 37

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 43 SEITA FINANCIAL STATEMENTS 2009-2010

Note 15: Superannuation ($ thousand) Contribution Contribution for the Year for the Year 2010 2009 Defined benefits plans: State Government Superannuation Scheme – revised and new 63 69 Defined contribution plans: Victorian Superannuation Fund – Vic Super Scheme 279 222 Private Funds 41 35 Total 383 326

The basis for contributions are determined by the various schemes.

The above amounts were measured as at 30 June of each year, or in the case of employer contributions they relate to the period ended 30 June 2010.

There are no contributions outstanding to the above funds at 30 June 2010.

Note 16: Leases

(a) Finance leases Finance leases relate to motor vehicles with lease terms of 3 years. SEITA does not have an option to purchase the motor vehicles at the conclusion of the lease agreement. ($ thousand) Minimum Present value of minimum future lease payments future lease payments 2010 2009 2010 2009 Finance lease liabilities payable Not longer than 1 year 214 97 191 79 Longer than 1 year and not longer than 5 years 283 216 266 203 Minimum lease payments 497 313 457 282 Less: future finance charges (40) (31) - - Present value of minimum lease payments 457 282 457 282

Included in the financial statements as: Current interest bearing liabilities (note 12) 191 79 Non-current interest bearing liabilities (note 12) 266 203 457 282

PAGE 44 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

(b) Finance leases – Peninsula Link project During the year, Southern Way was awarded the contract to build and deliver the toll-free Peninsula Link project. The component of the contract relating to the design and construction of the road infrastructure is accounted for by SEITA as a lease agreement in accordance with the current Government accounting policy for availability based Private Provision for Public Infrastructure (PPPI) projects. The remaining component of the contract relating to the operation and maintenance of the road infrastructure is considered a service contract. Under the arrangement of the contract with Southern Way, the component of service payments to be paid by SEITA relating to design and construction (D&C) of the road infrastructure represents the minimum lease payments over the project term. These D&C service payments as specified in the project agreement are agreed at the inception of the lease agreement and not subject to variations during the project term (i.e. Southern Way bears any construction risks). There is no contingent rent payable under the agreement. During the project term, Southern Way is required to operate the road infrastructure with the objective of making the road available for public use on behalf of the State. The Government retains the residual interest in the road infrastructure at the end of the project term and will take ownership of the road infrastructure at that time. Accordingly, the D&C component of the contract with Southern Way is considered a finance lease agreement, whereby SEITA is the lessee. There is no purchase option under the agreement. The inception date of the lease agreement is 20 January 2010 when the contract was awarded to Southern Way. The commencement date of the lease is scheduled for 8 December 2012 or at the time of project completion. The total contracted future minimum lease payments are presented below together with the present value of the future minimum lease payments to be recognised at the commencement date of 8 December 2012. There is no contractual lease liability or leased asset to be recognised as at 30 June 2010. The initial recognition of the lease liability and leased asset will occur as of the commencement date of December 2012 in the Financial Statements for the year ending 30 June 2013. These amounts are commitments until recognised as a finance lease in 2012. ($ thousand) Minimum future lease payments 2010 2009 Finance lease payable from commencement date(i) Not longer than 1 year -- Longer than 1 year but not longer than 5 years 279,955 - Later than 5 years 2,015,334 - Minimum lease payments 2,295,289 - (i) These minimum lease payments were contracted and committed to during the year but they are only payable from the commencement date of the lease agreement of December 2012.

Included in the financial statement as: Current interest bearing liabilities - - Non-current interest bearing liabilities - - -- Present value of minimum lease payments to be recognised at initial recognition date of December 2012 (ii) Not longer than 1 year 142,116 - Longer than 1 year but no longer than 5 years 293,475 - Later than 5 years 409,221 - Present value of minimum lease payments 844,812

Contracted minimum lease payments 2,295,289 - Less: future finance charges (1,450,477) - Present value of minimum lease payments 844,812 -

(ii) The present value of minimum lease payments has been determined as at the lease commencement date with minimum payments derived from the present value of the project cost as outlined in the Peninsula Link Project Summary.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 45 SEITA FINANCIAL STATEMENTS 2009-2010

(c) Operating leases Operating leases relate to the office facilities with lease terms of between two to three years with an option to extend. The operating leases contain review clauses in the event that SEITA exercises its option to renew. SEITA does not have an option to purchase the leased assets at the expiry of the lease period. ($ thousand) 2010 2009 Non-cancellable operating leases payable: office facilities Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within 1 year 368 468 Later than 1 year but not later than 5 years 76 312 444 780

(i) Maturity analysis of finance lease liabilities Please refer to Note 19 for the ageing analysis of finance lease liabilities.

(ii) Nature and extent of risk arising from finance lease liabilities Please refer to Note 19 for the nature and extent of risks arising from finance lease liabilities.

Note 17: Commitments

(a) Capital expenditure Peninsula Link ($ thousand) 2010 2009 Capital expenditure commitments (i) Not Longer than 1 year -- Longer than 1 year but not longer than 5 years - - Longer than 5 years 79,265 35 Total 79,265 35

(i) Represents the lifecycle commitment.

(b) Other expenditure Peninsula Link ($ thousand) 2010 2009 Other commitments in relation to the Peninsula Link Project payable from December 2012 (ii) Not longer than 1 year -- Longer than 1 year but not longer than 5 years 21,191 - Longer than 5 years 346,770 - Total 367,961 -

(ii) Represents the operations and maintenance payments

Also refer to commitments in note 16.

PAGE 46 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 18: Contingent assets and contingent liabilities

Project Deed As disclosed in the Annual Report, the State has entered into a Project Deed with Southern Way for private sector delivery of the design, construction, finance, operation and maintenance of Peninsula Link under the Partnerships Victoria framework. The Project Deed is a public document and can be obtained on the internet at www.linkingmelbourne.vic.gov.au.

The Project Deed creates certain rights and obligations for the State. The most significant right is the right to receive the completed Project in the future. Contingent assets

Project bonds The Project documents provide for a bond to protect the State’s interest in its arrangements with Southern Way. The bond is a handover bond which Southern Way may provide as security for the performance of any maintenance and repair work to achieve handover of Peninsula Link to the State (as an alternative to depositing funds in an escrow account). This option does not arise until 3 years before the expected expiry of the operations and maintenance term.

Lathams Road Project The Lathams Road works are pre-construction works relating to the Peninsula Link project and are being undertaken by BMD Constructions. Under the contractual agreement, the contractor is required to provide security for 5% of the contract sum. This security is made up of two bonds each to the sum of $173,059.

Contingent liabilities The State has retained some specified risks associated with the project. Certain events such as compensable relief events and force majeure events as well as some changes in law enable Southern Way to submit a change notice to the State.

If Southern Way’s obligations are suspended because of a compensable relief event or if a change in law has an effect on the cost of performing the operating and maintenance activities, then subject to a number of conditions, Southern Way may be entitled to be paid an amount calculated in accordance with the change compensation principles.

Southern Way is required to minimise the duration and consequences of relief events and to insure against certain such events.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 47 SEITA FINANCIAL STATEMENTS 2009-2010

Note 19: Financial instruments

(a) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the Financial Statements.

(b) Categorisation of financial instruments ($ thousand) Financial assets Note Category Carrying Carrying amount amount 2010 2009 Cash and cash equivalents 3 Cash 8,503 13,253

Receivables (i) 4 Receivables (at amortised cost) 164 648

Financial liabilities Note Category Carrying Carrying amount amount 2010 2009 Payables (ii) 11 Financial liabilities measured at amortised cost 3,681 4,262 Interest bearing liabilities 12 Financial liabilities measured at amortised cost 457 282

Notes: (i) The amount of receivables disclosed here excludes statutory receivables which are the amounts receivable from the Department of Transport and the ATO. (ii) The amount of payables disclosed here excludes statutory payments which are the amounts payable to the ATO and that arise as a result of the statutory requirements of the Land Acquisition and Compensation Act 1986.

(c) Credit risk Credit risk arises from the financial assets of SEITA, which comprise cash and cash equivalents, trade and other receivables. Credit risk arises when there is the possibility of SEITA’s debtors defaulting on their contractual obligations resulting in financial loss to SEITA. SEITA measures credit risk on a fair value basis and monitors risk on a regular basis.

Credit risk associated with SEITA’s financial assets is minimal because the main debtor is the Department of Transport. In addition the majority of SEITA’s receivables relate to statutory obligations rather than contractual obligations.

Financial assets that are either past due or impaired Currently SEITA does not hold any collateral as security nor credit enhancements relating to any of its financial assets. Refer to Note 4, Receivables, for further information.

As at the reporting date, there is no event to indicate that any of the financial assets are impaired.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. The following table discloses the ageing only of financial assets that are past due but not impaired:

PAGE 48 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Interest rate exposure and ageing analysis of financial assets table ($ thousand) Weighted Interest average rate Past due but not impaired effective exposure Not past Impaired interest Carrying due Financial rate% amount Non-interest and not Less than 1 – 3 3 months 1 -5 assets bearing impaired 1 month months – 1 year years 2010 Financial assets Receivables (i)-164164164----- 231231231----- 2009 Financial assets: Receivables (i) - 648 648 124 30 164 330 - - - 648 648 124 30 164 330 - -

Note: (i) Ageing analysis of receivables excludes statutory receivables (i.e. amounts owing from Department of Transport and GST input tax credit recoverable).

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 49 SEITA FINANCIAL STATEMENTS 2009-2010

Note 19: Financial instruments (continued)

(d) Liquidity risk Liquidity risk arises when SEITA is unable to meet its financial obligations as they fall due. SEITA settles financial obligations within 14 days. It continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets.

SEITA’s exposure to liquidity risk is deemed insignificant based on prior periods data and current assessment of risk.

The following table discloses the contractual maturity analysis for SEITA’s financial liabilities:

Interest rate exposure and maturity analysis of financial liabilities table ($ thousand)

Weighted Interest rate exposure Maturity dates (a) average effective Carrying Fixed Non- Nominal Less than 1 -3 3 months- 1-5 years interest amount interest interest amount 1 month months 1 year rate% rate bearing 2010 Financial liabilities Payables (i): Other payables 3,681 - 3,681 3,681 3,656 25 - - Interest bearing liabilities: Finance lease liabilities 6.97% 457 457 - 497 61 22 133 281 4,138 457 3,681 4,438 3,717 47 133 281 2009 Financial liabilities: Payables (i): Other payables - 4,262 - 4,262 4,262 3,758 330 174 - Interest bearing liabilities: Finance lease liabilities 7.50% 282 282 - 313 7 26 64 216 4,544 282 4,262 4,575 3,765 356 238 216

Note: The amounts disclosed are the contractual undiscounted cash flows for each class of financial liabilities (i) Maturity analysis of payables excludes statutory payables (i.e. amounts payable as a result of the statutory requirements of Land Acquisition and Compensation Act 1986 and GST input tax payment).

PAGE 50 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

(e) Market risk SEITA’s exposure to market risk is primarily through interest rate risk. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraphs below.

Interest rate risk SEITA has fixed interest rates for its finance leases thus the impact of a movement in interest rates will have a minimal impact on SEITA.

Sensitivity disclosure analysis Taking into account past performance, future expectations, economic forecasts, and management’s knowledge and experience of the financial markets, SEITA believes that interest rate and CPI movements, either way, will have a minimal impact on its financial instruments. The movement considered is a parallel shift of +1% and -1% on both interest rates issued by the Reserve Bank and CPI movements as reported by the Bureau of Statistics.

The Market Risk Exposure table discloses the category of each financial instrument that may be subject to the above sensitivity analysis.

Market risk exposure table ($ thousand) -1% +1% (100 basis points) (100 basis points) Carrying Net Net amount Result Equity Result Equity 2010 Financial assets Cash and equivalents (i) 8,503 (85) (85) 85 85

2009 Financial assets Cash and equivalents (i) 13,253 (133) (133) 133 133

Notes: (i) Sensitivity of cash and cash equivalents to a +1% movement in rates: [$8,503k x 0.07]-[$8,503k x 0.06] = $85k. Similarly for a -1% movement in interest rate, impact = $(85k).

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 51 SEITA FINANCIAL STATEMENTS 2009-2010

Note 19: Financial instruments (continued)

(f) Fair value The fair value and net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities of SEITA approximates their carrying amounts. ($ thousand) Carrying amount Net fair value 2010 2009 2010 2009 On-Balance Sheet financial instruments Financial assets Cash 8,503 13,253 8,503 13,253 Receivables (i) 164 648 164 648 8,667 13,901 8,667 13,901 Financial liabilities Payables (ii) 3,681 4,262 3,681 4,260 Interest bearing liabilities 457 282 457 282 4,138 4,544 4,138 4,542

Notes: (i) The amount of receivables disclosed here excludes statutory receivables which are the amounts receivable from the Department of Transport and the ATO. (ii) The amount of payables disclosed here excludes statutory payments which are the amounts payable to the ATO and that arise as a result of the statutory requirements of the Land Acquisition and Compensation Act 1986.

Note 20: Reconciliation of comprehensive result to net cash flows from operating activities ($ thousand) 2010 2009 Comprehensive result 7,928 1,304 Non-cash movements Depreciation and amortisation of non-current assets 476 324 Land and infrastructure written (back)/off (1,058) (18,050) Non-operating income from disposal of land 5,107 (300) Additional costs for the administration of disposing land

Movements in assets and liabilities (Increase)/decrease in debtors and receivables (9,253) 21,582 Increase/(decrease) in employee provisions 210 64 (Decrease)/increase in creditors and accruals (131) (2,882) Increase/(decrease) in other operating assets (13,290) - Net cash from operating activities (10,011) 2,042

PAGE 52 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 21: Movements in equity ($ thousand) 2010 2009 (a) Contributed capital Balance at beginning of financial year 321,359 315,326 Capital contributions during the year by Victorian State Government Land transferred from VicRoads 39,767 Net Assets transferred to VicRoads (3,729) WestLink 3,977 Land transferred from Melbourne Water 511 Peninsula Link initial direct costs 5,785 5,793 Peninsula Link land freehold land acquisition 16,566 Peninsula Link Lathams Rd 3,670 240 Balance at end of the financial year 387,906 321,359

(b) Accumulated surplus/(deficit) Balance at beginning of financial year (294,140) (291,189) Net result 7,928 1,304 Balance at end of financial year (286,212) (289,885) Accrued receivable from prior year – Adjustment (4,255) Balance after adjustment (294,140)

Note 22: Ex-gratia payments ($ thousand) 2010 2009

SEITA has made the following ex-gratia payments: Ex-gratia payments 15

The ex-gratia payments in 2010 relate to the out-of-pocket expenses incurred by representatives of the State Government appointed Community Advisory Group (CAG) for their work on WestLink.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 53 SEITA FINANCIAL STATEMENTS 2009-2010

Note 23: Responsible persons Remuneration received for Responsible persons in the 2010 year.

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

Names The persons who held the positions of Responsible Persons in SEITA are as follows:

Responsible Minister Minister for Roads and Ports The Hon Tim Pallas, MP 1 July 2009 to 30 June 2010

Accountable Officer Chief Executive Officer Ken Mathers 1 July 2009 to 30 June 2010

Board Members Chairman, SEITA Board David Buckingham 14 September 2009 to 30 June 2010 Member, SEITA Board Anthony Darvall 1 July 2009 to 30 June 2010 Member, SEITA Board Shelley Penn 1 July 2009 to 30 June 2010 Member, SEITA Board Anna Skarbek 1 January 2010 to 30 June 2010 Member, SEITA Board Gary Liddle 1 July 2009 to 30 June 2010

Remuneration Remuneration received or receivable by the Accountable Officer in connection with the management of SEITA during the year was in the range $430,000 - $439,999 ($420,000 - $429,999 in 2009).

Remuneration received or receivable by other Responsible Persons in connection with SEITA during the year was in the range: ($ thousand) 2010 2009 No. No. Income Band $90,000 - $99,999 -1 $50,000 - $59,999 2- $40,000 - $49,999 -4 $30,000 - $39,999 1- $10,000 - $19,999 1- $0 - $9,999 1- Total numbers 55 Total amount $165 $267

For the period ending 30 June 2010, the SEITA Board met on 10 occasions.

Amounts relating to Ministers are reported in the Financial Statements of the Department of Premier and Cabinet.

Other transactions Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance for Responsible Persons have been considered and there are no matters to report.

PAGE 54 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 24: Remuneration of executives The number of executive officers, other than the Minister and the Accountable Officer, and their total remuneration during the reporting period are shown in the first and second columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns.

Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits. Total remuneration represents the actual remuneration paid or payable.

($ thousand) Income Band Total Base Remuneration Remuneration 2010 2009 2010 2009 No. No. No. No. $280,000 – $289,999 1 - - - $240,000 – $249,999 - - 1 - $230,000 – $239,999 - 1 - - $210,000- $219,999 1 - - - $200,000 – $209,999 - 1 - 1 $180,000 - $189,999 1 - 1 - $170,000 - $179,999 - - - 1 $160,000 – $169,999 - 1 1 - $150,000 – $159,999 1 1 - 1 $140,000 – $149,999 2 - - - $130,000 – $139,999 - 2 1 1 $120,000 – $129,999 1 - 2 1 $110,000 – $119,999 - 1 1 1 $100,000 - $109,999 - - - 1 Under $100,000 - - - - Total Numbers 7 7 7 7 Total amount $1,251 $1,158 $1,102 $1,029

The prior period was adjusted to relect the performance bonuses accrued.

Note 25: Remuneration of auditors Amounts received, or due and receivable, by the Victorian Auditor General’s Office for the audit of SEITA’s Financial Statements: ($ thousand) 2010 2009 Victorian Auditor General’s Office Audit of the Financial Statements 52 50

* The 2009 audit fee was disclosed last year as $34,000. Following the audit it was agreed to adjust this to $50,000.

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 55 SEITA FINANCIAL STATEMENTS 2009-2010

Note 26: Subsequent events There are no events that have occurred after the reporting date that reveal any change to the conditions that existed at the reporting date.

Note 27: State initiated modifications and other works

SEITA has managed works on land adjacent to EastLink that are being constructed by private contractors. SEITA receives an amount from the Department of Transport and engages these contractors to undertake these works. The amount received from the Department of Transport is shown as income and the amount paid to the Concessionaire and other contractors is shown as expenditure. SEITA used retained earnings to partially fund some of the other works.

At completion of these works, the relevant State authority will be advised to take up the fair value of these works in its accounts.

Note 28: Returned works During the course of work on the EastLink Project, certain assets constructed by the Concessionaire are transferred to State Government authorities, Local Government councils and utilities upon completion. Examples of these types of assets are shared paths, local roads and improvements to existing infrastructure. The return of these assets is conducted by a formal process specified in the Concession Deed. These assets are considered transitionary in nature and as such SEITA has not recognised these assets in the Balance Sheet.

There were no returned works in 2009-10.

Note 29: Going concern On 22 July 2009 SEITA commenced trading as the ‘Linking Melbourne Authority’. The Transport Integration Act 2010 has formally repealed the SEITA Act and created a new transport corporation called the Linking Melbourne Authority. The proclamation date for this was 1 July 2010.

The Linking Melbourne Authority is the successor in law of SEITA assuming all its rights and obligations. Every form of authority that has been provided to SEITA becomes authority given to the Linking Melbourne Authority. The transfer is automatic upon the dissolution of SEITA and there is no hiatus period. There is no impact on the valuations included on the Balance Sheet due to this change.

PAGE 56 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

Note 30: Restructuring of administrative arrangements (i) Transfer of the management of the EastLink project to VicRoads On 30 April 2010 the management of the EastLink project was transferred to VicRoads. As at 10 May 2010 the assets and liabilities were transferred to VicRoads as contributed capital.

Transfer from SEITA to VicRoads 2010 $000

Assets Cash 3 Property, plant and equipment 1,953 Assets held for sale 1,773 Receivables 1,735

Liabilities Payables (450) Provision for compulsory land acquisitions (1,285) Net assets transferred to VicRoads 3,729

(ii) Transfer of Freehold land from Melbourne Water to SEITA SEITA acquired land from Melbourne Water for the Peninsula Link project. On 30 June 2010 the assets were transferred to SEITA. 2010 $000

Assets Property acquired for roads 511 Net assets transferred from Melbourne Water 511

(iii) Transfer of Freehold land from VicRoads to SEITA SEITA acquired land from VicRoads for the Peninsula Link project. On 22 September 2009, the assets were transferred to SEITA 2010 $000

Assets Property acquired for roads 39,767 Net assets transferred from VicRoads 39,769

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 57 SEITA FINANCIAL STATEMENTS 2009-2010

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LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 59 SEITA FINANCIAL STATEMENTS 2009-2010

PAGE 60 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 SEITA FINANCIAL STATEMENTS 2009-2010

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 61 STATUTORY INFORMATION

Freedom of Information h) to make recommendations to the Minister in relation to facilitating the Project and coordinating with The Authority is subject to the provisions and statutory authorities, agencies of the State and other requirements of the Freedom of Information Act 1982. bodies or persons involved in, or affected by, the During the 2009-10 financial year LMA received five new development or operation of the Project; requests. All of these requests were from Members of i) to ensure that agreements between the State and any Parliament. Of these requests, the majority were other person for, or relating to, the development or acceded to and two went to internal review. One request, delivery of the Project are performed in accordance which was outstanding from 2008-2009, led to an appeal with their terms; to the Victorian Civil and Administrative Tribunal (VCAT), but the applicant withdrew the appeal prior to a hearing. j) to undertake any other functions that are conferred on the Authority by or under this or any other Act. Whistleblowers Protection Act 2001 Pecuniary Interest The Authority is subject to the provisions and requirements of the Whistleblowers Protection Act 2001. Declarations of Pecuniary Interest were executed by all During the reporting year, no staff of the Authority Board members, senior officers and other relevant sought to disclose information in accordance with the employees of the Authority. Act. Victorian Industry Participation Publications Policy The Authority’s publications and statements are There were no contracts completed in this period to principally within electronic domains which can be found which the Victorian Industry Participation Policy Act at www.linkingmelbourne.vic.gov.au. 2003 applied. Functions Availability of Other Information The Southern and Eastern Integrated Transport The Directions of the Minister for Finance, pursuant to Authority Act 2003 prescribes the functions of the the Financial Management Act 1994, require a range of Authority as follows: information to be prepared in relation to the financial a) to facilitate, on behalf of the State, the development year. of the Project; This material is itemised below and, where not b) to seek and evaluate submissions from persons published in this report, is retained by the Accountable interested in undertaking the Project; Officer and can be made available to Ministers, c) to negotiate with persons interested in undertaking Members of Parliament and the public on request, the Project; subject to the limitations of the Freedom of Information d) to make recommendations in relation to contractual Act 1982: arrangements between the State and any person for • A statement of declarations of pecuniary interests has the development or delivery of the Project; been completed by all relevant officers; e) to administer and manage agreements and • LMA is again compliant with the whole-of- arrangements between the State and any other Government’s Ministerial Standing Directions person for, or relating to, the development of the regarding financial management; Project; • LMA complies with all Victorian Government f) to facilitate and coordinate consultations with occupational health and safety requirements. statutory authorities and agencies of the State and other bodies or persons involved in, or affected by, the development or operation of the Project; g) to negotiate and enter into arrangements with statutory authorities and agencies of the State and other bodies or persons involved in, or affected by, the development or operation of the Project;

PAGE 62 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 DISCLOSURE INDEX

The Annual Report of the Linking Melbourne Authority has been prepared in accordance with all relevant Victorian Legislation. This index has been prepared to facilitate identification of the Authority’s compliance with statutory disclosure requirements:

Ministerial Directions SD 4.2(g) General information requirements . . .4-16 SD 4.2(j) Sign off requirements ...... 58 REPORT OF OPERATIONS – FINANCIAL REPORTING DIRECTION GUIDANCE FINANCIAL STATEMENTS Financial statements required under Part 7 of the FMA Charter and purpose SD 4.2(a) Statement of changes in equity ...... 20 FRD 22B Manner of establishment and the relevant SD 4.2(b) Operating statement ...... 18 Ministers ...... 6,8 SD 4.2(b) Balance sheet ...... 19 FRD 22B Objectives, functions, powers and duties ...... 6-8, 62 SD 4.2(b) Cash flow statement ...... 21 FRD 22B Nature and range of services provided . .6,8 Other requirements under Standing Direction 4.2 SD 4.2(a) Compliance with Australian accounting Management and structure standards and other authoritative FRD 22B Organisational structure ...... 8 pronouncements ...... 23-31 Financial and other information SD 4.2(a) Statement of Compliance ...... 31 FRD 8B Budget portfolio outcomes ...... 6 SD 4.2(d) Rounding of amounts ...... 29 FRD 10 Disclosure index ...... 63 SD 4.2(c) Accountable officer’s declaration ...... 58 FRD 12A Disclosure of major contracts ...... 9,10 Other disclosures as required by FRDs in notes to the FRD 15B Executive officer disclosures ...... 55 financial statements FRD 22B, Operational and budgetary objectives FRD 9A Departmental disclosure of administered SD4.2(k) and performance against objectives . . . .6 assets and liabilities ...... – FRD 22B Employment and conduct principles . . .16 FRD 11 Disclosure of ex-gratia payments . . . . .53 FRD 22B Occupational health and safety policy . .62 FRD 13 Disclosure of parliamentary FRD 22B Summary of the financial results for appropriations ...... – the year ...... 18 FRD 21A Responsible person and executive officer FRD 22B Significant changes in financial position Disclosures ...... 54-55 during the year ...... – FRD 102 Inventories ...... – FRD 22B Major changes or factors affecting FRD 103D Non-current physical assets ...... 36-39 performance ...... – FRD 104 Foreign currency ...... – FRD 22B Subsequent events ...... 56 FRD 106 Impairment of assets ...... – FRD 22B Application and operation of FRD 109 Intangible assets ...... 39-40 Freedom of Information Act 1982 . . . . .62 FRD 107 Investment properties ...... 37 FRD 22B Compliance with building and FRD 110 Cash flow statements ...... 21 maintenance provisions of Building FRD 112A Defined benefit superannuation Act 1993 ...... – obligations ...... 44 FRD 22B Statement on National Competition FRD 113 Investments in subsidiaries, jointly Policy ...... – controlled entities and public FRD 22B Application and operation of the non-financial corporations ...... – Whistleblowers Protection Act 2001 . . .62 FRD 114A Financial Instruments – General FRD 22B Details of consultancies government entities and public over $100,000 ...... 64 non-financial corporations ...... 48-52 FRD 22B Details of consultancies FRD 119 Contributions by owners ...... 57 under $100,000 ...... 64 FRD 22B Statement of availability of other LEGISLATION Information ...... 62 Freedom of Information Act 1982 FRD 24C Reporting of office based Building Act 1983 environmental Impacts ...... – Whistleblowers Protection Act 2001 FRD 25 Victorian Industry Participation Policy Disclosures ...... 62 Victorian Industry Participation Policy Act 2003 FRD 29 Workforce Data disclosures ...... 43 Financial Management Act 1994 SD 4.5.5 Risk management compliance Multicultural Victoria Act 2004 attestation ...... 59

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 63 RELATED POLICIES

Policies issued by the Victorian Government provide the Melbourne@5 million is the Victorian Government’s framework within which LMA operates. Some of the response to the recent analysis of the 2006 Census and more significant Government policies are noted below. Australian Bureau of Statistics information which projects an increase in population and household growth The Victorian Transport Plan (VTP) is the most for the metropolitan area. This update has a strong comprehensive transport policy released by the focus on creating jobs and services in key Central Government. Containing $38 billion in projects, the VTP Activities Districts and employment corridors that are aims to meet growing demands and shape a more closer to people’s homes. productive, liveable and sustainable State. It builds on the work undertaken by Sir Rod Eddington in his Growing Victoria Together expresses the Government’s Investing in Transport report, which provided a series of broad vision for the future and aims to balance recommendations for alternative east-west connections economic, social and environmental considerations. Key across Melbourne. priority goals across Government are: a thriving economy, caring communities, a health environment, a Released against the backdrop of the challenges of vibrant democracy and quality health and education. climate change, growing population and the global economic downturn, the VTP has six priority areas for Victoria: Leading the Way (Economic Statement, April action. They are: 2004) is the Victorian Government’s action plan to 1. Shaping Victoria – linking jobs, services and homes; position Victoria to meet significant external challenges and maintain its leading economic performance. The 2. Linking rural, regional and metro Victoria – plan will drive new investment and infrastructure, strengthening the connections between regional, stimulate the creation of jobs across the State, lower rural and metropolitan Victoria so all parts of the costs for Victorian businesses and support increased state share in economic prosperity; exports of Victoria’s goods and services. 3. Creating a metro system – taking practical steps to increase the frequency, reliability and safety of trains Melbourne 2030 is a comprehensive policy which sets and trams and moving towards a metro system; the direction for the way the metropolitan area will grow 4. Moving around Melbourne – linking our communities in the future. Amongst its key deliverables are better by closing gaps, reducing congestion and improving management of metropolitan growth and better safety on the road network; transport links. Melbourne 2030 is based on the principles of sustainability, innovation, partnership, 5. Taking practical steps for a sustainable future – leadership, equity, adaptability and inclusiveness. moving towards a sustainable and lower emissions transport system to support a greener Victoria; Partnerships Victoria gives effect to a commitment to 6. Strengthening Victoria’s and Australia’s economy – optimise the level of infrastructure spending through a new links to drive jobs and economic growth and responsible use of resources of both the public and build Victoria’s prosperity. private sectors. Value for money and the public interest are keynotes of the policy.

SEITA Consultancy Expenditure for the year ending 30 June 2010 ($000’s)

Comprehensive Works in Total Operating Progress Consultancies Statement GHD 985 39 1,023 PWC 663 2,576 3,239 Clayton Utz 799 2,143 2,942 VicRoads 329 - 329 Standfast Consulting 294 163 458 Workshop Architectures 116 - 116 AGA 144 1,787 1,931 Consultancies less than $100,000 612 115 727

Total Consultancies 3,942 6,823 10,765

PAGE 64 LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 NOTES

LINKING MELBOURNE AUTHORITY ANNUAL REPORT 2009-2010 PAGE 65 NOTES

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