Important Notice

The information contained in this document originally produced by AECOM Australia Pty Ltd (AECOM) and PricewaterhouseCoopers Consulting Australia Pty Ltd (PwC) together referred to as AECOM/PWC, was produced solely for the use of Infrastructure Victoria and was prepared for the specific purpose outlined in the contract dated 23 February 2016. No third party may use or rely on this document. AECOM/PwC has used its reasonable endeavours to ensure this document is based on information current as at the date of this document. AECOM/PwC’s assessments represent its reasonable judgments within the time and budget constraints of its commission and using information available to it at the time within those constraints. Information contained in this document takes precedence over any later verbal or written presentation, representation, clarification or advice. Unless contained within this document, information included in any verbal or written presentation, representation, clarification, or amendment made after the date of the Report may not be relied upon unless the same has been issued in writing by AECOM/PwC as a formal numbered addendum to the Report. AECOM/PwC has relied on information provided by Infrastructure Victoria and by third parties (Information Providers) to produce this document and arrive at its conclusions. AECOM/PwC has not verified information provided by the Information Providers (unless expressly stated otherwise) and we assume no responsibility and make no representations as to the adequacy, accuracy or completeness of such information. No responsibility is assumed for inaccuracies in reporting by the Information Providers including, without limitation, by Infrastructure Victoria’s employees or representatives or for inaccuracies in any other data source whether provided in writing or orally used in preparing or presenting the document. Unless required by law, Infrastructure Victoria shall not provide this document to any third party without AECOM/PwC’s prior written consent which AECOM/PwC may, in their sole discretion grant, withhold or grant subject to conditions. Possession of this document does not carry with it the right to commercially reproduce, publish, sell, hire, lend, redistribute, abstract, excerpt or summarise this document or to use the name of AECOM/PwC in any manner without first obtaining the prior written consent of AECOM/PwC. This document does not purport to give legal advice. Subject to AECOM/PwC’s obligations to Infrastructure Victoria: a. any other recipient of this document, by their acceptance or use of this document, releases AECOM/PwC, their parent corporation and its and their affiliates from any liability for direct, indirect, consequential or special loss or damage whether arising in contract, warranty, express or implied, tort or otherwise, and irrespective of fault, negligence and strict liability. b. AECOM/PwC undertakes no duty to, nor accepts any responsibility to, any other party who may use or rely upon this document. c. If anyone other than Infrastructure Victoria chooses to use or rely on this document they do so at their own risk. d. AECOM/PwC undertakes no duty to and accepts no responsibility for impacts on any findings from changes in "external" factors such as changes in GDP, terms of trade, changes in government policy or the behaviour of markets. e. This document may include “forward-looking statements”. These statements relate to AECOM/PwC’s expectations, beliefs, intentions or strategies regarding the future. These statements may be identified by the use of words like “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “should,” “seek,” and similar expressions. The forward-looking statements reflect AECOM/PwC’s views and assumptions with respect to future events as of the date of this document and are subject to future conditions, other risks and uncertainties, including but not limited to economic and political conditions and sovereign risk. Circumstances and events will occur following the date on which such information was obtained that are beyond AECOM/PwC’s control or knowledge and which may affect the findings or projections contained in this document. We may not be held responsible for and specifically disclaim any responsibility for such circumstances or events. No section or element of this document may be removed, reproduced, electronically stored or transmitted in any form by parties other than those for whom the document has been prepared without the written permission of AECOM. All sections in this document must be viewed in the context of the entire document including, without limitation, any assumptions made and disclaimers provided. No section in this document may be excised from the body of the document without AECOM’s prior written consent. PwC’s liability is limited by a scheme approved under Professional Standards Legislation.

Table of Contents

Regional rail electrification RRE2 5 Regional rail gauge standardisation RRG 10 Regional rolling stock expansion RRS 15 Regional road upgrades RRU 20 Road space allocation changes RSA 26 Rail signals and fleet upgrade RSF 31 Recycled treated wastewater for non-potable agricultural use RTA 37 Recycled treated wastewater for non-potable use RTH 43 Regional train link upgrades RTL 48 Residential tenancies reform RTR 53 Recycled treated wastewater for drinking RWW 58 Affordable housing development incentives SAH 63 Schools as community facilities SCF 68 Affordable Social housing infrastructure investment framework SCP 75 Public housing asset rationalisation and refurbishment SHA 81 Social housing stock expansion SHE 86 Affordable housing sector planning system amendment SHS1 91 Integrated government service and infrastructure planning SIP 96 SmartBus network extensions and service increases SNE 102 School demand management SOO 107 Sport and recreational facility strategic investment SRF 112 Stormwater harvesting and re-use SRH 118 School regional level maintenance contracts SRM1 123 Stormwater quality management SRQ 128 Unlocking school resources with technology SRS 133 Small scale solar energy regulation SSE 139 School and tertiary education cooperation STE 144 Strategic transit-oriented centres and corridors STO 149 South Yarra Metro station SYM 155 Technology enabled healthcare TEH 160 Major Hospital Redevelopments THR 166 Tram network extensions TNE 171 Real time public transport information TNI 176 Transport network price regime TNP 181 Torquay rail extension TRE 187 Transitional accommodation stock expansion TSA 192 Train station car parking improvement TSC 197 ‘TravelSmart’ programs TSP 203 Tidal and wave energy TWE 210 Compact urban development UDC 215 Green Infrastructure UFF 220 Urban planning and approvals processes for health facilities UPA 226 Victorian data analytics centre VDA 231 Water delivery efficiency in irrigation WDE 238 Webb Dock freight rail access WDF 243 Wonthaggi desalination plant expansion WDP 248 Western intermodal freight terminal WIF 253 Water infrastructure optimisation through increased network connectivity WIO1 258 Water infrastructure optimisation through governance arrangements WIO2 263 Water market development WME 268 Wastewater management in small towns WMS 273 Wallan rail electrification WRE1 278 Wollert rail extension WRE2 283 Water supply augmentation WSA1 288 Water supply augmentation through building new dams WSA2 293 Wind and solar energy generation large scale investments WSE 297 Wyndham Vale to Werribee rail extension WVW 302 Waste water system augmentation in high growth areas WWS 307

Needs Icons

Need Icon

Need 1 Address infrastructure demands in areas with high population growth

Need 2 Address infrastructure challenges in areas with low or negative growth

Need 3 Respond to increasing pressures on health infrastructure, particularly due to ageing

Need 4 Enable physical activity and participation

Need 5 Provide spaces where communities can come together

Need 6 Improve accessibility for people with mobility challenges

Need 7 Provide better access to housing for the most vulnerable Victorians

Need Icon

Need 8 Address expanded demand on the justice system

Need 9 Provide access to high-quality education infrastructure to support lifelong learning

Need 10 Meet growing demand for access to economic activity in central Melbourne

Need 11 Improve access to middle and outer metropolitan major employment centres

Need 12 Improve access to jobs and services for people in regional and rural areas

Need 13 Improve the efficiency of freight supply chains

Need 14 Manage threats to water security, particularly in regional and rural areas

Need Icon

Need 15 Manage pressures on landfill and waste recovery facilities

Need 16 Help preserve natural environments and minimise biodiversity loss

Need 17 Improve the health of waterways and coastal areas

Need 18 Transition to low carbon energy supply and use

Need 19 Improve the resilience of critical infrastructure

Regional rail electrification RRE2

Infrastructure Victoria’s Option Description Electrification of passenger rail services to Geelong (Sunshine to Waurn Ponds), Ballarat (Sunshine to Wendouree) and Bendigo (Sunbury to Epsom and Eaglehawk) to increase line capacity and reliability. This will attract greater mode shift from cars and may encourage more commuting from regional centres. The main benefits of electrification are cost efficiency, better rolling stock, reduced carbon emissions, improved passenger experience, and reduction in travel times particularly on corridors with closely spaced (or large numbers of) stations due to the sharper acceleration/deceleration profiles of the lighter electric rolling stock. Priorities for regional rail electrification should focus on the corridors with steady patronage and a large number of stations within a commutable distance to Melbourne, particularly the Geelong corridor. This could be followed by electrification of the Ballarat and/or Bendigo corridors pending the introduction of new or improved stations to serve emerging growth areas and/or continued increase in demand along these routes. This will assist in connecting people living in regional areas with jobs and services in the central city, and support the viability of reverse commuting to growing regional employment centres. Sector Certainty of evidence Transport Low Option type Evidence base New or expanded assets State Government of Victoria, Connecting Regional Victoria: Victoria's Regional Network Development Location and spatial context Plan (2016) Statewide V/Line, Performance and capacity (2016) Melbourne – Bendigo state-significant transport Department of Environment, Land, Water & corridor Planning (DELWP), Victoria in Future 2015 and Victorian Government unpublished population Melbourne – Ballarat state-significant transport corridor projections (2015) KPMG, Arup & Jacobs, Transport modelling for Melbourne – Geelong state-significant transport corridor Infrastructure Victoria (2016) This option affects areas in the catchment of the Victorian regional rail network. Risks and Opportunities There is a risk around working in an active rail corridor during the construction phase of this option, however it is assumed these will be managed appropriately. There is also the risk of oversupply in the provision of electrified railways (including all- new rolling stock), which could be underutilised relative to the cost. With faster and more frequent regional rail services, there is opportunity for greater regional development.

Regional rail electrification RRE2 Page 5 Supplement B – Options assessed (document 4 of 4)

Direct option cost distance of approximately 80km, 120km and 130km respectively yields an annual recurrent cost of $41 The capital or implementation cost of the option, million. plus the annual recurrent costs incurred within the 30 year study period of this option is: Costing source $5 billion – $10 billion Department of Treasury and Finance, Victorian Budget 15/16 (2015) Capital / implementation cost Department of Treasury and Finance, Victorian $5 billion – $10 billion Budget 16/17 (2016) Public Transport Victoria (PTV), Trains, Trams, Annual recurrent costs Jobs 2015-2025 (2015) $25 million – $50 million Department of Economic Development, Jobs, Transport and Resources, Connecting Regional Option lead time Victoria: Victoria's Regional Network Development Plan (2016) If this option was committed to today, it could be implemented in: Public Transport Victoria (PTV) website (2016) 5 – 10 years Stakeholder consultation Operational life What could influence this option? The expected operational life of this option (from The need for this option could be influenced by opening) is: population growth >50 years In response this option would increase capacity of the regional rail network through the greater Cost certainty provision of services. The certainty of costing evidence is rated: When could it be required? Medium Victoria may need this option to be implemented in: Electrification of 34 kilometres of track along the 15 – 30 years (2031 – 2046) Sunbury line in 2012 required construction of substations and 640 steel gantries. The total project What is the risk of deferring this cost $270 million, thus per kilometre cost was option? approximately $8 million. If this option were deferred the regional network It is assumed that the capital cost of procuring this would have a lower maximum service capacity. option would involve two components: The risk to the State if this option is deferred is: - Electrification of approximately 350 kilometres of track from the metropolitan transport hubs Low to the four regional transport hubs (two of which are in Bendigo). - Procurement of electrified regional trains. The Regional Network Development Plan does not inform VLocity carriage purchases over the long term, and instead identifies procurement and roll out of next generation trains. To operate the electrified Geelong line it is expected 200 carriages would be required. Annual recurrent cost has been calculated as $10 per train service kilometre, which is expected to cover most costs associated with running the service, such as power, wages, train stabling and maintenance. There are currently 64 services to/from Waurn Ponds per day, 36 services to/from Wendouree per day and 14 to/from Epsom per day. This slightly overstates the number of services given fewer trains run on the weekends, however it allows for some expansion of capacity. Taking a

Regional rail electrification RRE2 Page 6 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne The potential increase in service quality through an electrified regional network would be fairly high. Commuting from regional centres to central Melbourne has become increasingly popular since the provision of the Regional Fast Rail Project from the early 2000s. The KPMG, Arup and Jacobs modelling results showing growth on all major regional commuter lines between 2031 and 2046, especially along the Regional Rail Link, which is expected to grow at 7 percent each year, adding over 15,000 daily boardings in the AM peak (KPMG, Arup and Jacobs 2016). If the network was electrified and provided faster journey times, more frequent services and a new fleet of trains it is expected that these demand figures would increase. As the number of jobs and services increase in central Melbourne, it is expected that this will be followed by demand for journeys in to the city from regional areas. This option receives a 'Moderate' contribution rating against Need 10 initially, which increases to 'Significant' from year 5 on. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city Regional rail electrification will directly benefit access to the central city through increased service quality. Metric 2: Improvements in transport performance across the network to access central Melbourne There will be limited changes in the efficiency of the transport network around central Melbourne through the provision of an electrified service, although there may be some easing of congestion coming in to the city through more people choosing public transport over driving.

Need 12: Improve access to jobs and services for people in regional and rural areas In regional and rural areas, this option will improve connectivity both between Melbourne and also between neighbouring regional towns through an overall service quality improvement. It may also increase overall economic activity in regional centres and neighbouring towns along the rail line as longer-distance commuting becomes more viable. Although an electrified regional network would be beneficial today, as the Regional Rail Link corridor develops and adds new stations this option will contribute significantly to the need of regional transport. This option receives a 'Moderate' contribution against Need 12 initially. However, as the Regional Rail Link corridor develops and adds new stations, the contribution rating of this option increases to 'Significant' from year 5 on. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas Additional services and higher capacity regional rolling stock will directly contribute to the increase in supply of transport opportunities to regional and rural Victoria. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas Presently, some regional train services are at capacity in the peak periods. By providing these new trains and more services (with reduced journey times) it will help alleviate any congestion and encourage mode shift to public transport. Metric 3: Improvements in ICT connectivity in rural and regional areas This option may offer an opportunity to give people in regional and rural areas additional access to the internet through the provision of Wi-Fi on the new trains required, although it is assumed if the customer has a Wi-Fi capable device this would not be their only source of ICT connectivity.

Regional rail electrification RRE2 Page 7 Supplement B – Options assessed

Regional rail electrification RRE2 Page 8 Supplement B – Options assessed

Economic, social and environmental assessment summary Electrification of the regional rail network will have state-significant benefits including the increase in service quality (allowing greater access to jobs, services, education and social opportunities) and also the potentially reduced maintenance and operating costs of the rolling stock. Since electric regional trains would need to be procured, this would increase economic activity through the manufacturing process (due to local content laws) and also skills and knowledge transfer in the design process. There may also be environmental benefits through reduced local pollution and resource use (since they will no longer be diesel powered) and also the reduction in personal vehicle traffic coming in to Melbourne from the regional centres.

Regional rail electrification RRE2 Page 9 Supplement B – Options assessed

Regional rail gauge standardisation RRG

Infrastructure Victoria’s Option Description Convert the remainder of the regional rail network across Victoria including the passenger network from broad gauge to standard gauge. This will enable a wider range of rolling stock to operate on the Victorian network and interoperability with the broader national network. It will also save rolling stock conversions to broad gauge. The standardisation will provide new freight corridors for standard gauge operations to link with a greater number of port facilities. This will reduce freight costs, increase efficiency and create greater competition between the ports. Of the remaining broad gauge network in Victoria, the next area of focus after the Murray Basin Rail Project could be the Hume/Goulburn areas including the lines through Seymour, Shepparton and Tocumwal. This would create benefits for the substantial fresh produce industry in the area. Sector Certainty of evidence Transport Medium Option type Evidence base Better use Department of Economic Development, Jobs, Transport and Resources, 'The Murray Basin Rail Location and spatial context Project – Final Business Case (2015) Rural and regional Victoria Department of Transport, Planning and Local This option affects the regional rail network, mainly Infrastructure, 'Victorian Freight and Logistics Plan' (2014) to the north and north-east of the state. Bureau of Infrastructure, Transport and Regional Risks and Opportunities Economics, 'Freightline' (2014) There is a risk around working in an active rail corridor during the construction phase of this option, however it is assumed these will be managed appropriately. Like with the Murray Basin Rail Project, there is the opportunity to implement axle-load upgrades and other enhancements to increase the potential freight benefits of this initiative.

Regional rail gauge standardisation RRG Page 10 Supplement B – Options assessed

Direct option cost Project Transport Network Initiative: Final Business Case (2015) The capital or implementation cost of the option, plus the annual recurrent costs incurred within the What could influence this option? 30 year study period of this option is: The need for this option could be influenced by the $1 billion – $3 billion desire to optimise the performance of the Victorian regional freight rail network, and its ability to coexist Capital / implementation cost with interstate activities. $500 million – $750 million In response this option would increase the supply of standard gauge track in Victoria, which will allow Annual recurrent costs operators to better utilise their assets and reduce the cost of rail freight movements. $10 million – $25 million When could it be required? Option lead time Victoria may need this option to be implemented in: If this option was committed to today, it could be 5 – 10 years (2021 – 2026) implemented in: What is the risk of deferring this 5 – 10 years option? Operational life If this option were deferred, growth of regional road The expected operational life of this option (from freight would continue faster than rail freight. opening) is: The risk to the State if this option is deferred is: >50 years Low Cost certainty The certainty of costing evidence is rated: Medium At 2014 Victoria had 2,894 kilometres of broad gauge rail track and 1,222 kilometres of standard gauge rail track (including the trackage within metropolitan Melbourne). The Murray Basin Rail Project involves standardising and increasing the axle load of the freight lines in Victoria's Murray Basin Region. As per the Murray Basin Rail Project Business Case, the cost per each of the 1,023 kilometre of works is $388,192, and this includes track gauge conversion, secondary track, sleepers, under bridge inspections, level crossing upgrades, junction upgrades and additional signalling, among other more minor costs. The capital cost calculation assumes similar works will be required across the remaining 1,871 kilometres of broad gauge network.

In 2012 – 13, V/Line identified that Victoria's rail freight network required $30 million annually for maintenance. Half of this value been applied to this option for recurrent costs. Costing source Bureau of Infrastructure, Transport and Regional Economics and Australasian Railway Association, Trainline 2: Statistical Report (2014) Department of Economic Development, Jobs, Transport and Resources, The Murray Basin Rail Regional rail gauge standardisation RRG Page 11 Supplement B – Options assessed

Contribution to needs Need 12: Improve access to jobs and services for people in regional and rural areas Presently, there is only one V/Line service which is standard gauge in Victoria (Melbourne – Albury) with the remainder of the fleet being broad gauge. Converting the track in northern Victoria (through Shepparton, Deniliquin and Tocumwal) would require additional passenger rolling stock to be converted to standard gauge for the Shepparton passenger service, however service quality is not assumed to increase. This option is expected to make a ‘Very Low/Negative’ contribution to Need 12. The contribution of this option to regional passenger requirements is not expected to change over time. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas This option may not increase the ability to access regional towns and centres, since the vast majority of passenger rolling stock in Victoria is broad gauge (to suit the metropolitan network). Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas During the process of gauge conversion, there may be improvements made which increase the reliability of the track with flow on benefits to passenger services. Metric 3: Improvements in ICT connectivity in rural and regional areas This option will not affect ICT connectivity.

Need 13: Improve the efficiency of freight supply chains There are numerous freight operation benefits from gauge standardisation, including the ability for operators to reduce their costs by only needing one gauge of rolling stock and increasing the track axle load ratings during the upgrade. This will allow for heavier (and more productive) train loads to use the lines and make rail freight more competitive. This option could also align with the scope of the South East Rail Link (as set out in the 2013 Victorian Freight and Logistics Plan) if the Port of Hastings is developed. This option is anticipated to make a ‘Moderate’ contribution to Need 13 in all time periods. By 2046, the regional Victorian freight task is expected to grow to 68 million tonnes per annum, an increase of over 30 million tonnes from 2012 levels. This demonstrates the need for improved freight infrastructure in regional Victoria, and this option will help facilitate this over time. Metric 1: Reduction in cost of the total freight task (origin to destination) This option will improve the efficiency of which freight is moved around Victoria.

Regional rail gauge standardisation RRG Page 12 Supplement B – Options assessed (document 4 of 4)

Regional rail gauge standardisation RRG Page 13 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary The majority of benefits from this option will be economic benefits from the reduced regional freight cost. With this will also come environmental benefits from removing trucks from the freeways leading in to Melbourne and a reduction in port related traffic.

Regional rail gauge standardisation RRG Page 14 Supplement B – Options assessed (document 4 of 4)

Regional rolling stock expansion RRS

Infrastructure Victoria’s Option Description Procure new rolling stock to support additional services on regional lines. This option includes the acquisition of a next generation fleet to allow for retirement of older rolling stock and to support additional rail capacity between regional centres and to the central city, allowing more people to conveniently access jobs and services. Pending the potential for associated corridor enhancements such as electrification, the procurement of new vehicles could also improve journey times or minimise the impact of any new stations. This is due to the sharper acceleration/deceleration profile of electric vehicles or, to a lesser extent, any new vehicles with an advanced design. All new rolling stock should be specifically developed to best respond to the unique physical characteristics (i.e. grades, spacing of stations) of Victoria’s rail system. Sector Certainty of evidence Transport Low Option type Evidence base New or expanded assets State Government of Victoria, Connecting Regional Victoria: Victoria's Regional Network Development Location and spatial context Plan (2016) This option affects areas in the catchment of the V/Line, 'Performance and capacity' (2016) Victorian regional rail network. Department of Environment, Land, Water & Risks and Opportunities Planning (DELWP), Victoria in Future 2015 and Victorian Government unpublished population It can be assumed the design of the train will be projections (2015) new or modified to suit Victoria's needs, and therefore increases the chance for unexpected KPMG, Arup & Jacobs, Transport modelling for technical issues arising. As is the case with any Infrastructure Victoria (2016) procurement program involving new design, there is the potential for cost overruns. Opportunities with this option is the ability to increase the capacity of the regional rail network and make commuting from peri-urban and regional areas more viable, without more expensive infrastructure capacity upgrades.

Regional rolling stock expansion RRS Page 15 Supplement B – Options assessed (document 4 of 4)

Direct option cost Costing source The capital or implementation cost of the option, Department of Treasury and Finance, Victorian plus the annual recurrent costs incurred within the Budget 15/16 (2015) 30 year study period of this option is: Department of Treasury and Finance, Victorian $1 billion – $3 billion Budget 16/17 (2016) Capital / implementation cost Public Transport Victoria (PTV), Trains, Trams, Jobs 2015 – 2025 (2015) $1 billion – $3 billion Department of Economic Development, Jobs, Transport and Resources, Connecting Regional Annual recurrent costs Victoria: Victoria's Regional Network Development $50 million – $100 million Plan (2016) Public Transport Victoria (PTV) website (2016) Option lead time What could influence this option? If this option was committed to today, it could be implemented in: This option could be influenced by the need to provide more capacity on regional rail services 1 – 5 years (especially from the 'commuter' towns such as Operational life Geelong, Melton and Seymour). In response this option would increase the capacity The expected operational life of this option (from of regional rail network while maintaining the current opening) is: service plan. 25 – 50 years When could it be required? Cost certainty Victoria may need this option to be implemented in: The certainty of costing evidence is rated: 0 – 5 years (2016 – 2021) Medium What is the risk of deferring this The 2016 – 17 Victorian Budget includes $280 option? million for 27 new V'Locity carriages to be entirely built in Dandenong. This is in addition to the 21 If this option were deferred crowding will worsen on carriages and supporting infrastructure invested in regional trains and potentially reduce the viability of the 2015 – 16 State Budget at a cost of $257 commuting using public transport. million. This investment is in line with the short term The risk to the State if this option is deferred is: strategy of the Regional Network Development Plan. For the 48 carriages this investment over two Medium budget years totals $537 million, an average cost of approximately $11.2 million per carriage. This works out to $67.2 million per six car train. Victoria's regional train fleet currently comprises 41 diesel locomotives with 133 carriages, 141 VLocity carriages and 21 Sprinters. The Regional Network Development Plan does not inform VLocity carriage purchases over the long term, and instead identifies procurement and roll out of next generation trains. Assuming regional rail alignments remain unelectrified, it is expected that there would be a required investment in approximately 200 new generation train carriages over Infrastructure Victoria's 30 year strategy. At a cost similar to VLocity carriage procurement, this would have a total capital cost of approximately $2.24 billion. The annual recurrent cost is assumed as 0.5 percent of capital cost.

Regional rolling stock expansion RRS Page 16 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne Commuting from regional centres to central Melbourne has become increasingly popular since the provision of the Regional Fast Rail Project from the early 2000s. This trend is set to continue with the KPMG, Arup and Jacobs modelling results showing growth on all major regional commuter lines between 2031 and 2046, especially along the Regional Rail Link, which is expected to grow at 7 percent each year, adding over 15,000 daily boardings in the AM peak (KMPG, Arup & Jacobs 2016). As the number of jobs and services increase in central Melbourne, it is expected that this will be followed by demand for journeys in to the city from regional areas. This option receives a 'Moderate' contribution rating against Need 10 initially, which increases to 'Significant' from year 5 on. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city Additional and higher capacity regional rolling stock will directly contribute to the increase in supply of transport opportunities to the central city. Metric 2: Improvements in transport performance across the network to access central Melbourne There will be limited changes in the efficiency of the transport network around central Melbourne through the provision of these trains, although there may be some easing of congestion coming in to the city through more people choosing public transport over driving.

Need 12: Improve access to jobs and services for people in regional and rural areas In regional and rural areas, this option will improve connectivity both between Melbourne and also between neighbouring regional towns. These have both been identified as requirements of people living in regional Victoria in the Regional Network Development Plan (2016), and are shown to be a current problem with many peak-hour trains being at or above capacity. This new rolling stock will allow some of the older fleet to be retired which will reduce maintenance costs, while also supplementing the V'Locity fleet. This option receives a 'Moderate' contribution against Need 12 initially. However, as the Regional Rail Link corridor develops and adds new stations, the contribution rating of this option increases to 'Significant' from year 5 – 30. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas Additional and higher capacity regional rolling stock will directly contribute to the increase in supply of transport opportunities to regional and rural Victoria. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas Presently, some regional train services are at capacity in the peak periods. By providing these new trains it will help alleviate any congestion and encourage mode shift to public transport. Metric 3: Improvements in ICT connectivity in rural and regional areas This option may offer an opportunity to give people in regional and rural areas additional access to the internet through the provision of Wi-Fi on the new trains, although it is assumed if the customer has a Wi-Fi capable device this would not be their only source of ICT connectivity.

Regional rolling stock expansion RRS Page 17 Supplement B – Options assessed (document 4 of 4)

Regional rolling stock expansion RRS Page 18 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary With local content requirements in procurements such as this, there will be economic activity generated in the manufacturing process as well as knowledge and skills transfer. By retiring the older regional train fleet, the Government will save money through less maintenance required on the new rolling stock. As this option increases capacity of the rail network, it will also have positive impacts on access to jobs, services, education and social opportunities.

Regional rolling stock expansion RRS Page 19 Supplement B – Options assessed (document 4 of 4)

Regional road upgrades RRU

Infrastructure Victoria’s Option Description A number of upgrade projects on the regional road network (particularly in regional centres) to improve safety, travel times and travel time reliability, including for freight. The type of works proposed include town centre bypasses, improved connections to regional highways, improvements to ‘last kilometre’ access for freight and upgraded rest areas and truck turnaround areas. It includes both state and local roads. There are a range of upgrades already committed and therefore regarded as being included in the base case – this option goes beyond these. Sector Certainty of evidence Transport Medium Option type Evidence base New or expanded assets Community Indictors Victoria, VicHealth Survey 2011 (2016) Location and spatial context Community Indictors Victoria, 2012 general Regional practitioner (GP) addresses: Human Services Data This option is applicable to local roads within Directory (2016) regional centres and rural areas. Productivity Commission, Public Infrastructure (2014) Risks and Opportunities Travis Review, Increasing the capacity of the There may a risk of traffic delays during Victorian public hospital system for better patient construction. The upgrades to the road network will outcomes (2015) also need to consider any potential impacts to the local environment. Victorian Auditor General’s Office (VAGO), Maintaining the State’s Regional Arterial Road There is an opportunity to align this option with Network (2008) regional highway upgrades.

Regional road upgrades RRU Page 20 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the safety concerns, and demand from local traffic in 30 year study period of this option is: regional centres and rural areas. $250 million – $500 million In response this option would increase the capacity and improve the safety of local roads. Capital / implementation cost When could it be required? $250 million – $500 million Victoria may need this option to be implemented in: Annual recurrent costs 0 – 5 years (2016 – 2021) <$1 million What is the risk of deferring this option? Option lead time If this option were deferred specific hotspots for If this option was committed to today, it could be accidents would not be addressed, and traffic implemented in: concerns in some areas may worsen. <1 year The risk to the State if this option is deferred is: Operational life Medium The expected operational life of this option (from opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low The total funding provided for this option is assumed to be $500 million over the five year period. Annual recurrent costs are minimal as these are assumed to be covered through existing maintenance budgets. Costing source Stakeholder consultation

Regional road upgrades RRU Page 21 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 2: Address infrastructure challenges in areas with low or negative growth Overall, challenges in accessing infrastructure and services are typically more significant in local government areas experiencing low or declining population growth. With low or negative growth the revenue base for local government contracts, which can create challenges for maintaining existing infrastructure such as local government roads. Ongoing management and maintenance of infrastructure in these areas would ensure greater equity in quality of life and access to services for all Victorians. By upgrading roads in these regional areas, this option is likely to maintain or improve access for existing residences in low or negative growth areas. Areas with low or negative population growth are often located in more regional and rural areas, which often perceive their quality and access to infrastructure to be lower than more metropolitan areas. For example, areas with the longest distances to medical centres with GPs were in Victoria’s outer-metropolitan areas in the west and east of the state, and these areas generally also had a lower perceived quality of services. People in regional Victoria also reported experiencing transport limitations more often, with the greatest concentration of infrastructure challenges experienced within the State’s north-west (Community Indicators Victoria 2016). This option is likely to improve access to existing services within low or negative areas. It receives a 'Moderate' contribution in each time period. Metric 1: Ability to optimise infrastructure delivery while maintaining or improving service delivery within low growth areas This option has the potential to prioritise upgrading of local roads that are essential to the functioning of local rural communities including those in low growth LGAs.

Need 3: Respond to increasing pressures on health infrastructure, particularly due to ageing The Travis Review considered that the ability of health infrastructure to respond to future pressures could be reflected by variations in factors including wait times for health services, shortfalls in infrastructure capacity and the increasing proportion of the population aged 65 years and over (Travis Review 2015). Although this option may improve the access of regional communities to access health infrastructure, it is not anticipated to be a substantial improvement. In addition, this option does not address the other factors identified as reducing pressure on the health system. However, some targeted projects may contribute to reducing traffic accidents and reduce associated hospital admissions in regional hospitals. This option may improve road safety in regional areas, or improve access to existing health infrastructure slightly. It does not address the underlying factors which can increase pressure on the health system, however, so receives a 'Very Low/ Negative' contribution rating against Need 3 in each time period. Metric 1: Improvements in access to health services This option is anticipated to provide only minor improvements to access to health services. Metric 2: Increase in efficiency of health services This option is not intended to improve health service efficiency.

Need 12: Improve access to jobs and services for people in regional and rural areas Pressures on maintaining the quality of the regional road network include funding devoted to maintenance, the expansion and aging of the asset base, higher traffic levels, increased size of vehicles using the road and increased expectations for road quality (VAGO 2008). While these issues were identified in 2008, it is considered likely that many still apply, as evidenced by ongoing State and Federal funding to support investment and /or maintenance of regional roads. Upgrading local roads can improve access to jobs and services through making local roads safer, and separating local traffic routes from heavy freight routes. Upgrading local roads may also be necessary to complement changes to local networks associated with highway upgrades and realignments. This option receives a 'Moderate' contribution rating in each time period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas

Regional road upgrades RRU Page 22 Supplement B – Options assessed (document 4 of 4)

Upgrading of local roads would make a moderate contribution to increasing supply to meet demand to accommodate journeys to and from employment centres and services. Upgrades within regional centres can also assist to make precincts more attractive places that support business and services. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas Upgrades to local roads can assist to improve performance across the network, particularly in separating freight movements from local traffic, therefore this option is rated moderate. Metric 3: Improvements in ICT connectivity in rural and regional areas This metric is not applicable to this option.

Need 13: Improve the efficiency of freight supply chains Freight users rely on the urban, regional and remote road network to transport goods. The freight industry is anticipated to benefit from this option through improved travel times and safety outcomes. There is the potential also for roads to be upgraded to take heavy vehicles, which could expand the network available for more productive freight services. With the structure of current road use charging, local government has limited ability to recover the wear and tear on local government maintained roads resulting from freight use. This can result in local government limiting the use of local roads to certain classes of freight vehicle. Nationally, the Heavy Vehicle Charging and Investment reform project has been established to address heavy vehicle charging conflicts (Productivity Commission 2014), which is an ongoing process. Potentially this option could help expand the freight network by providing funding support for road upgrades to support freight. This option is anticipated to have a ‘Moderate’ contribution to the need in all time periods. Metric 1: Reduction in cost of the total freight task (origin to destination) Improvements to the regional road network are likely to reduce the operating costs of road freight operators by reducing travel times, or allowing higher productivity vehicles to be used.

Regional road upgrades RRU Page 23 Supplement B – Options assessed (document 4 of 4)

Regional road upgrades RRU Page 24 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to benefit regional and remote communities through investment in their transport networks. This is likely to enable improved access to jobs and social infrastructure for these communities. In many cases these benefits are not considered likely to be appreciable, due to the distance to employment (greater than 45 minutes) or the existence of services to access. In the case of health and education services, known gaps and alternate delivery models using ICT indicate that the benefits may not be appreciable. Benefits for access to social infrastructure have been assumed. This option is considered likely to improve the resilience of regional road network and to have safety benefits for regional communities and road users.

Regional road upgrades RRU Page 25 Supplement B – Options assessed (document 4 of 4)

Road space allocation changes RSA

Infrastructure Victoria’s Option Description This option aims to reallocate road space to prioritise public transport and active transport corridors into the central city and employment centres to achieve best and most efficient use of the road network. The main emphasis of this is on separating trams and buses from other traffic (including upgrading some tram routes to light rail standard) enabling greater throughput of passengers on these corridors. Specific road allocation changes could include: converting traffic lanes to tram, bus or cycle lanes; extending clearways at intersections to enable priority lanes for trams or buses (also supporting priority signalisation); expansion of pedestrian space where viable; narrowing of traffic lanes for additional cycle/pedestrian space (or safety buffers). Many of these changes can be introduced on a segment-by-segment basis in response to variations of traffic volumes on city streets. An example of a template for bicycle-focused road reallocation (including narrowing of lanes and introduction of buffers) is Swanston Street from the CBD to the University of Melbourne. Areas to be prioritised for such upgrades could include under-accommodated links in otherwise well-connected corridors (such as the remaining section of Swanston Street between Collins Street and Flinders Street) or areas with either excess traffic capacity or critical safety issues. Areas where road space could potentially be reallocated for tram or bus priority include streets where lane separation is unclear or inconsistent (such as Tram Route 1 on Park Street) or streets/intersections where car turn lanes currently overlap with tram or bus lanes (prohibiting advanced signalisation). Priority areas for upgrades include streets where buses and trams are significantly impeded by general traffic (such as DART services on northbound Hoddle Street), areas where the current traffic signal priority structure is inadequate to ensure reliable running times (i.e. intersections with long signal cycles and long conflicting signal phases), and areas where demand for public transport is severely restricted by the poor speed/performance of street-running trams and buses. Sector Certainty of evidence Transport Medium Option type Evidence base Better use U.S Department of Transport, Road Diet Informational Guide (2014) Location and spatial context Institute of Public Works Engineering Australia Melbourne-wide Queensland Division Inc (IPWEAQ), Complete This option would apply to corridors or parts of the Streets Guidelines for Urban Street Design (2010) network that are not currently efficiently used or North Carolina Department of Transport, Complete where inconsistencies exist. These areas potentially Streets Planning and Design Guidelines (2012) include Hoddle Street and Park Street. Risks and Opportunities With the removal of road space for private vehicles, there is a risk of a backlash from some sections of the community. Reallocating road space provides an opportunity to increase urban amenity through street scaping and treatments.

Road space allocation changes RSA Page 26 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the congestion, inefficient use of streets and network 30 year study period of this option is: planning, creation of place as opposed to thoroughfare in suitable locations, and the need to $750 million – $1 billion create streets that serve mobility need of multiple Capital / implementation cost users. $500 million – $750 million In response this option would increase the capacity for travel through more efficient use of street space. In some locations such as back streets, or urban Annual recurrent costs centres traffic calming measures may be used to <$1 million support these places. Reallocation on arterial roads can help to move more people by prioritising mass- Option lead time transit. When could it be required? If this option was committed to today, it could be implemented in: Victoria may need this option to be implemented in: 1 – 5 years 0 – 5 years (2016 – 2021) Operational life What is the risk of deferring this The expected operational life of this option (from option? opening) is: If this option were deferred congestion will not be 25 – 50 years addressed as much as it could. The liveability of places within Victoria will not be optimised. Cost certainty The risk to the State if this option is deferred is: The certainty of costing evidence is rated: Medium Low A scope of works is assumed totalling $750 million. This would include road space reallocations in key activity centres and transport nodes, primarily within metropolitan Melbourne but also in key regional cities. Annual recurrent costs are assumed to be mostly absorbed in existing maintenance budgets. Costing source Stakeholder consultation

Road space allocation changes RSA Page 27 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne Road space allocation entails a variety of treatments that need to be tailored for a specific context and transit intent. Noting this, this option has the potential to increase capacity along road corridors that have existing mass- transit or have the potential to support mass-transit in the future. Given the number of kilometres covered by on-road trams and buses accessing central Melbourne that get delayed in traffic, this option has the potential to improve the reliability and travel times of mass-transit along with active forms of transport. Applied to certain transport corridors, this option can moderately contribute to meeting growing demand for access to economic activity in central Melbourne. This option is assessed as having a ‘Moderate’ contribution to Need 10. This contribution is anticipated to remain constant over the 30 year period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city This option would enable greater utilisation of existing transport corridor space, by reallocating street space to higher capacity transport modes such as public transport, cycling or walking where applicable. This option would accommodate additional journeys to and from the central city along certain transport corridors. Metric 2: Improvements in transport performance across the network to access central Melbourne Through smart application, this option could improve transport performance across the network, through prioritisation of signalisation and road diets. As these treatments would be tailored to the needs of each corridor or intersection, this option has the potential to improve overall transport performance, particularly given the proportion of journeys into central Melbourne.

Need 11: Improve access to middle and outer metropolitan major employment centres As per the benefits of this option explored in the related discussion for Need 10, this option could improve access to middle and outer metropolitan employment centres along certain corridors. Therefore this option would make a ‘Moderate’ contribution to this need. This contribution is anticipated to remain constant over the 30 year period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres This option when also supported by land use has the potential to improve access to middle and outer metropolitan major employment centres. This would primarily be by way of prioritisation of public transport that services these centres. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres This option has the potential to improve transport performance along specific corridors and networks surrounding major employment centres.

Road space allocation changes RSA Page 28 Supplement B – Options assessed

Road space allocation changes RSA Page 29 Supplement B – Options assessed

Economic, social and environmental assessment summary This option will moderately benefit the number of households with a journey to work >45 minutes by potentially increasing the speed and flow of the different modes affected (car, active transport, trams). It is assumed there will be travel time disbenefits for private road users which are countered with increases in PT service levels and efficiency. The areas in the option are all employment centres and the inner city which contain a large number of health and education facilities. This does not rate 'highly beneficial' as it will be a marginal improvement to existing corridors. A number of moderate environmental benefits are also anticipated such as reductions in carbon dioxide, air pollution and consumption of non-renewables associated with anticipated mode shifts to cleaner and/or more efficient forms of transport.

Road space allocation changes RSA Page 30 Supplement B – Options assessed

Rail signals and fleet upgrade RSF

Infrastructure Victoria’s Option Description Upgrade the signalling system across the metropolitan train network to accommodate more trains on existing tracks using new technologies. This option includes the implementation of high-capacity signalling (HCS) systems across the network, including upgrades to the rolling stock fleet and communication systems to support in-cabin signalling displays and direct control of the train. Complemented by the purchase of new high-capacity trains and associated upgrades (e.g. power upgrades) this will allow more services in peak periods and improve reliability. There are also safety benefits with HCS as it reduces the possibility for human error, and resilience benefits, as it supports quicker recovery from disruptions. HCS can be implemented on a corridor-by-corridor basis in the order of optimal impact. As the Melbourne Metro 1 (MM1) business case identifies HCS as part of the MM1 project, this option would focus on non-MM1 metropolitan corridors as well as regional trains that overlap the metropolitan routes. Clifton Hill Loop Line (South Morang/Mernda and Hurstbridge): The Clifton Hill group represents the most significant signalling-constrained portion of the metropolitan rail network (specifically the segment from Clifton Hill to/including the City Loop). Given that this line also serves several emerging high-growth areas and is being extended to Mernda (further increasing demand) it should be considered as Melbourne’s highest priority corridor for signalling upgrades. Northern Loop Line (Craigieburn and Upfield): These two corridors are programmed to operate together as the Northern Loop Line following the implementation of MM1, serving several significant high-growth. As such this corridor could be identified as a secondary priority for upgrade to HCS. Glen Waverley Line: The advantage of this line is that it has only six level crossings remaining; however, it does not serve a high- growth area (and therefore is not likely to see significant deterioration of conditions) and should be considered a lower priority for HCS. Burnley Loop Line (Alamein, Belgrave, Lilydale): The advantage of this group from an operations perspective is that it has fewer than 10 level crossings remaining; however, these lines already have a dedicated express track and do not serve high-growth areas (and are therefore unlikely to experience significantly degraded conditions in the future). It should therefore be considered only a moderate priority for HCS. Cross-City Line (Werribee to Sandringham): Forming the Cross-City Line following implementation of MM1, the Werribee-to-Sandringham corridor serves several high-growth areas particularly on the western leg near Werribee. As this service is not programmed to serve the full City Loop, it would require a lesser level of signalling works in the central city than most of the other metropolitan corridors. Frankston Line: As congestion within the Caulfield Loop of the City Loop will decrease as the Dandenong corridor is integrated into Melbourne Metro 1, the post-MM1 standalone Frankston Line should be considered a lesser priority for HCS as long as MM1 proceeds according to schedule. Bendigo and Traralgon V/Line services: As these regional services overlap the MM1 corridor along the outer portions of its route, the realisation of the full potential of HCS on MM1 will be dependent on the regional trains on these corridors also outfitted with HCS technology. (It is presumed the corridors would be HCS-enabled only to Sunshine and Dandenong but that regional trains and drivers would be equipped to use both conventional and HCS signalling).

Rail signals and fleet upgrade RSF Page 31 Supplement B – Options assessed

Sector Transport Option type Better use Location and spatial context Melbourne wide This option will affect people living within the catchment of the metropolitan rail network. Risks and Opportunities There are a range of risks with the implementation of high capacity signalling, as it has not yet been used in Victoria. The base case assumes that it will be implemented on the outer part of the Mernda line and through Melbourne Metro, substantially mitigating these risks. High capacity signalling opens up a range of opportunities to manage the network in different ways, including reconsidering a range of existing operating practices to improve efficiency. Certainty of evidence Medium Evidence base Department of Environment, Land, Water & Planning (DELWP), Victoria in Future 2015 and Victorian Government unpublished population projections (2015) Department of Premier and Cabinet (DPC), Next Generation Metro Tunnel Signalling Out To Market (2016)

Department of Economic Development, Jobs, Transport and Resources (DEDJTR), Infrastructure Australia Submission 2015 – High Capacity Signalling (2015) Department of Economic Development, Jobs, Transport and Resources (DEDJTR), Melbourne Metro Business Case (2016)

Rail signals and fleet upgrade RSF Page 32 Supplement B – Options assessed

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the political will for its implementation. 30 year study period of this option is: In response this option would increase the capacity $5 billion – $10 billion of the rail system to accommodate journeys to and from the central city. Capital / implementation cost When could it be required? $3 billion – $5 billion Victoria may need this option to be implemented in: Annual recurrent costs 5 – 10 years (2021 – 2026) $100 million – $250 million What is the risk of deferring this option? Option lead time If this option were deferred, the rail system may not If this option was committed to today, it could be have the capacity to accommodate expected implemented in: increases in demand. 5 – 10 years The risk to the State if this option is deferred is: Operational life Medium The expected operational life of this option (from opening) is: >50 years Cost certainty The certainty of costing evidence is rated: Low From the Infrastructure Australia submission, implementation on the Clifton Hill group is estimated to be $700 million – $900 million, with the wider network costing between $3 billion – $4 billion. Annual recurrent costs are assumed to be three percent of capital costs, and this covers maintenance only. Operating costs are assumed to remain unchanged. Costing source Department of Economic Development, Jobs, Transport and Resources (DEDJTR), Infrastructure Australia Submission 2015 – High Capacity Signalling (2015)

Rail signals and fleet upgrade RSF Page 33 Supplement B – Options assessed

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne Victoria’s population is expected to grow from a current 4.4 million to in excess of 9 million in 2051 and with it the number of jobs in central Melbourne is expected to increase from 435,000 in 2011 to 900,000 by 2051. The number of trips made to, from and around central Melbourne is expected to grow from 14.2 million per day to 24.9 million (Department of Environment, Land, Water and Planning, 2015). The capacity of the rail network will need to be expanded to accommodate this expected increase in demand for travel to central Melbourne. The introduction of high capacity signalling across the metropolitan network is anticipated to provide significant benefits to commuters, increasing the capacity of the network by up to nine trains per hour in each direction (for each individual line combination) based on international precedents, although these may be restricted in Melbourne due to mixed service patterns, high-volume junctions, and the high levels of passenger use (and associated station dwell times) within the CBD. Trains are currently separated by signals along the railway tracks. High capacity signals are located inside the driver's carriage, and computers determine how far apart the trains should be. Implementation of this technology across the metropolitan train network, combined with additional high capacity trains, would increase the capacity of the network to help meet the growing demand for access to central Melbourne. There are a number of rail-related infrastructure projects already planned over the next ten years which are intended to ease congestion and improve access to the central city, including the level crossing removal project, the Cranbourne – Pakenham line upgrade, Mernda Rail Extension. As such, the marginal benefit of this option over the short term may be more moderate. Over the longer term however, this option is intended to provide significant benefits. This option receives a ‘Moderate’ contribution rating in years 0 – 10, increasing to ‘Significant’ in years 10 – 30. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city This option is anticipated to significantly increase the capacity of the rail system, accommodating more journeys to and from the central city. Metric 2: Improve transport performance across the network access central Melbourne Implementation of high capacity signalling and purchase of high capacity rolling stock is anticipated to improve transport performance.

Rail signals and fleet upgrade RSF Page 34 Supplement B – Options assessed

Rail signals and fleet upgrade RSF Page 35 Supplement B – Options assessed

Economic, social and environmental assessment summary This option will significantly increase service levels on the metropolitan rail network, improving access to employment, education, health and other services. Upgrading the signalling system across the entire metropolitan train network is also expected to reduce car use and greenhouse gas emissions.

Rail signals and fleet upgrade RSF Page 36 Supplement B – Options assessed

Recycled treated wastewater for non- potable agricultural use RTA

Infrastructure Victoria’s Option Description This option involves greater use of recycled treated wastewater to meet existing agricultural water demands. This would supplement existing water use and allow greater use of raw water supplies for purposes such as meeting drinking water demands. Agricultural water usage is currently just over 70 per cent of total Victorian water usage. The majority of this water is supplied from catchment water storages. Substituting raw water supplies for agriculture with recycled treated waste water would help to increase water availability for critical purposes, particularly during dry periods. This option will consider the appropriate technology to treat waste water to a quality suitable for farming purposes, infrastructure upgrades to deliver this water to major irrigation areas, and pricing signals to promote uptake. Sector Certainty of evidence Water and waste Low Option type Evidence base Better use/New or expanded assets CSIRO and Bureau of Meteorology, Climate Change in Australia Information for Australia’s Location and spatial context Natural Resource Management Regions: Technical Report (2015) Statewide This option could be applied to the major irrigation Deloitte/Aurecon for Infrastructure Victoria, Infrastructure Capability Assessment, Water and areas in Victoria such as Pyramid–Boort, the Macalister Irrigation District, Werribee Irrigation Waste (2016) District, the Bacchus Marsh Irrigation District, Department of Environment, Land, Water and Sunraysia and the First Mildura Irrigation Trust Planning, Water for Victoria, a Discussion Paper District. (2016) Risks and Opportunities Department of Environment, Land, Water and Planning, Rural Water and Irrigation (accessed This option would be high cost to deliver at scale, 2016) and could require ongoing subsidies to be viable. Deloitte/Aurecon for Infrastructure Victoria, New irrigated areas or hydroponic farms could be Infrastructure Capability Assessment, Water and established closer to the production of recycled Waste (2016) treated wastewater to more cost effectively use the resource. Frontier Economics, Potential for water market expansion, a report prepared for Infrastructure Victoria (2016) Marsden Jacobs and Associates, Progress against the national target of 30 percent of Australia’s wastewater being recycled by 2015, Report prepared for the Department of Sustainability, Environment, Water, Population and Communities (Deepak) (2013) Melbourne Water, Annual report (2015) Melbourne Water, Using recycled water, http://www.melbournewater.com.au/whatwedo/recy clewater/Pages/Using-recycled-water.aspx, site accessed 29/06/201

Recycled treated wastewater for non-potable agricultural use RTA Page 37 Supplement B – Options assessed

Direct option cost 2016). The distance that the water would need to be transported is approximately 200 kilometres. The capital or implementation cost of the option, plus the annual recurrent costs incurred within the Stage 2 of the Warragul-Moe Water Supply 30 year study period of this option is: Interconnect is expected to cost $7.4 million, and involves connecting Darnum to Warragul by $250 million – $500 million pipeline, a distance of approximately 10 kilometres (Gippsland Water) Capital / implementation cost This indicates that 200 kilometres of pipeline $100 million – $250 million transport could cost in the range of $200 million dollars, with an allowance for additional supporting Annual recurrent costs infrastructure. $1 million – $10 million Annual recurrent costs have been assumed to be three percent of capital costs. Option lead time Costing source If this option was committed to today, it could be Deloitte and Aurecon, Infrastructure Capability implemented in: Assessment Water and Waste – advice to 1 – 5 years Infrastructure Victoria (2016) Operational life Gippsland Water, Draft Water Plan 3 Major Projects (website, accessed July 2016) The expected operational life of this option (from opening) is: What could influence this option? 5 – 10 years The need for this option could be influenced by the need to increase water security in response to likely Cost certainty future shortages, and the dependencies of major industry such as agriculture on water. The certainty of costing evidence is rated: In response the option would increase the supply of Medium non-potable water for irrigation in agriculture, Major irrigation areas in Victoria include Pyramid– reducing the demand on higher quality potable Boort, the Macalister Irrigation District, Werribee water and allowing it to be used for other purposes. Irrigation District, the Bacchus Marsh Irrigation District, Sunraysia and the First Mildura Irrigation When could it be required? Trust District (Goulburn Broken Catchment Victoria may need this option to be implemented in: Management Authority 2006). 10 – 15 years (2026 – 2031) To support this option, transport connections between existing recycled water treatment plants What is the risk of deferring this with unused capacity and major irrigation areas option? could be established. If this option is deferred ongoing climate variability Additionally, there may be opportunities to invest in will continue to influence the output of irrigated additional water recycling facilities in some regions farms. in Victoria to supply additional recycled water, as well as investing in transport networks to deliver the The risk to the State if this option is deferred is: water to agricultural users. Low In addition, subsidies or other forms of support could be provided. For the purpose of contribution assessment, one of these mechanisms has been explore more fully below. The cost estimate is limited by the lack of information about the feasibility of interventions. To provide an indication of cost, construction of a pipeline from the Eastern Treatment Plant to the Macalister Irrigation District has been considered. The Eastern Treatment Plant has the capacity to produce recycled treated wastewater of a quality sufficient for use in agriculture and currently discharges most of this water (Deloitte and Aurecon Recycled treated wastewater for non-potable agricultural use RTA Page 38 Supplement B – Options assessed

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas Agriculture is a major industry in Victoria and a major user of water, which is an essential input to production. In periods of water shortage, supplies of water to agriculture are affected and so is farm output, affecting regional economies. It is likely that demand for water will increase in the future, with economic and population growth forecast across Victoria. At the same time, it is likely that supply of water from traditional rain fed sources may diminish, and increase in variability (CSIRO and Bureau of Meteorology 2015). To maintain current output, and potentially expand, the sector could benefit from more secure water supplies. Recycled water can and is used for a range of agricultural applications, depending on the standard that water is treated to (Deloitte and Aurecon 2016). These include uses in cattle and livestock production and horticulture, including use in irrigation systems (Agriculture Victoria 2016, Department of Primary Industries 2006). With expanded use of recycled treated wastewater, potable water could be put towards alternate uses. Irrigation is a water intensive form of agriculture, which in 2012-13 accounted for 38 percent of the output (DELWP 2016). There is existing capacity to produce recycled waste water for non-potable uses and supply of this water currently exceeds demand in many jurisdictions, including in metropolitan Melbourne (Melbourne Water 2015). Transport costs and the cost of recycled treated wastewater relative to other sources of water supply are barriers to expanded use. Major irrigation districts are in the north of Victoria, while the largest quantities of recycled treated wastewater are produced in major urban areas. As recycled treated wastewater is of a different quality to potable water, it requires dedicated supply networks (i.e. trucking, or at a large scale, piping) that may be cost prohibitive outside of periods of water scarcity. This option would address the barrier of transport costs through investment in transport networks. Recycled treated wastewater is a more expensive form of supply than other options in normal weather conditions, due to the level of processing required for it to meet environmental standards. For this reason, historically, demand for treated wastewater for use in agriculture has peaked during periods of water shortage, and then fallen when alternate supply becomes available. This option is understood to involved subsidies to farmers or similar price signals to encourage them to make use of recycled treated wastewater under normal climatic conditions. The overall contribution of this option to the need is considered to be ‘Moderate’. There is some uncertainty in future trends in the agricultural sector that present some degree of uncertainty as the contribution of this option in the future. These factors include changing locations of major irrigation areas over the next 30 years along with changes in agricultural activities such as an increase in dairy farming and decrease in grain production. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users This option relieves pressure on supplies of potable water through enabling use of recycled water in Agriculture. Depending on the scale of the intervention, this option has the potential to significantly meet the need, as Agriculture is a major user of water. Metric 2: Increase in the efficiency of irrigation delivery systems This option does not target the efficiency of irrigation systems and so is not expected to have any direct impacts against this metric. Metric 3: Increase in total water available for non-urban water users This option performs strongly against this metric, as agriculture users are mostly in regional and remote communities.

Need 17: Improve the health of waterways and coastal areas It is assumed that this option, by increasing the supply of water suitable for use in Agriculture, would in periods of good water supply, reduce demand for existing rain fed water sources. This could allow for higher environmental flows. Additionally, in times of poor water supply, water could be retained for environmental flows that may have otherwise have been assigned for agricultural use. This option is therefore considered to have a moderate contribution to the need. This contribution is anticipated to be constant in all time periods.

Recycled treated wastewater for non-potable agricultural use RTA Page 39 Supplement B – Options assessed (document 4 of 4)

Metric 1: Increase of waterways in good or excellent condition This option supports the health of waterways by reducing the demands of agriculture on them, creating the potential for higher environmental flows. Metric 2: Improvements in coastal water quality This option is likely to impact on coastal water quality in a localised way to the extent that the quality of waterways is improved.

Recycled treated wastewater for non-potable agricultural use RTA Page 40 Supplement B – Options assessed (document 4 of 4)

Recycled treated wastewater for non-potable agricultural use RTA Page 41 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option diverts non-potable water to agricultural uses, making available existing potable supplies for other purposes and benefiting water use. In times of water scarcity this option is anticipated to benefit the resilience of water supply. By reducing the demands of agriculture on waterways, this option is likely to have benefits on ecosystems. For implementation and ongoing operation, this option is likely to require significant investment in water infrastructure to transport water to regional areas, and so is expected to benefit them. This option could also support business innovation, through encouraging the development of new irrigated and hydroponic farms. The resources needed to support this option may have negative impacts. State GSP growth is expected to be affected as the amount of resources tied up in supplying water to the agricultural industry would increase, decreasing its productivity and acting as a drag on the economy. Resource use and energy use are also anticipated to be negatively affected, both in water treatment and transport.

Recycled treated wastewater for non-potable agricultural use RTA Page 42 Supplement B – Options assessed (document 4 of 4)

Recycled treated wastewater for non- potable use RTH

Infrastructure Victoria’s Option Description This option involves increasing the use of recycled wastewater for non-potable (non-drinking) use through third pipe (or purple pipe) schemes. A state-wide review of current and potential uptake of recycled treated wastewater through third pipe schemes would inform progress in adopting this component of integrated water cycle management. Based on this review, the government can incentivise further uptake where there is potential for significant reduction in demand from mains water supply. This will promote consistency in utilisation of recycled wastewater and assist to address site specific cost challenges. A suitable incentive may be a targeted grant scheme. Wastewater treated to a quality suitable for supply through third pipe schemes can be used for watering gardens, toilet flushing, car washing, and irrigation of park areas, sporting ovals and golf courses. A key benefit of this water supply source is that it is not subject to restrictions. A number of water businesses in Victoria currently generate treated wastewater to a quality suitable for supply through third pipe schemes. In areas such as Melbourne and Geelong these schemes are well developed for some greenfield residential sites. This option has potential to further increase use of this resource in areas outside of Melbourne. Increasing the use of recycled treated wastewater creates local resilience by increasing water security. Sector Certainty of evidence Water and waste High Option type Evidence base Better use/New or expanded assets Barwon Water, Recycled water for Armstrong Creek and Torquay North (website accessed August 2016) Location and spatial context Department of Environment, Land, Water and Statewide Planning, Water for Victoria, a Discussion Paper This option entails two locations yet to be (2016) determined; however it has the potential to be Environmental Protection Authority, Supply of scaled-up to other areas across the state. Reclaimed Water for Drought Relief (2006) Risks and Opportunities National Department of Sustainability, Environment, Water, Population and Communities (DSEWPaC), Uptake of this option in rural areas may be limited Progress against the national target of 30 percent of by significant costs and lack of reticulated Australia’s wastewater being recycled by 2015 wastewater management systems. (2013) There is potential for cost efficiencies in integrating Melbourne Water, Annual Report (2015) third pipe schemes servicing developments within the vicinity of community spaces such as sporting Melbourne Water, Using recycled water (2016) fields.

Recycled treated wastewater for non-potable use RTH Page 43 Supplement B – Options assessed (document 4 of 4)

Direct option cost Costing source The capital or implementation cost of the option, Barwon Water, Extending Recycled Water to plus the annual recurrent costs incurred within the Torquay: Project Evaluation Report (2004) 30 year study period of this option is: What could influence this option? $10 million - $25 million The need for this option could be influenced by Capital / implementation cost future inability of rain-fed water sources to support population and economic growth, combined with the $10 million - $25 million ability to fit or retrofit housing stock in the catchment area of waste treatment plants with dual pipe Annual recurrent costs systems. <$1 million In response this option would improve the utilisation of recycled water by expanding the networks Option lead time required to transfer this water to households for household use. If this option was committed to today, it could be implemented in: When could it be required? 1 - 5 years Victoria may need this option to be implemented in: Operational life 0 - 5 years (2016 - 2021) The expected operational life of this option (from What is the risk of deferring this opening) is: option? >50 years If this option were deferred drinking quality water Cost certainty would continue to be used for functions like flushing toilets and watering gardens minimising The certainty of costing evidence is rated: conservation of this resource for drier periods. Low The risk to the State if this option is deferred is: The costing of this option assumes a review of Medium current projects and two targeted projects of a similar scale to that of the existing initiative carried out in Torquay and Jan Juc. The initiative in Torquay supplied non-potable water to 2,500 residential lots, shire offices, community and recreational facilities, as well as a future 350Ha of residential land. For this project, the Federal Government committed $10.5 million in funding. While infrastructure needs may vary for each site, it is assumed that the State Government will commit a similar amount to that committed for Torquay for each of the two projects. The incentive component of this option is considered to provide existing dwelling owners in Victoria with a $200 rebate for purple pipe installation. The recurrent costing assumes this option is applied to two initiatives of similar scale to the Torquay initiative, equating to a total of 5,000 lots, spread over a 10 year programme lifespan.

Recycled treated wastewater for non-potable use RTH Page 44 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas There is existing capacity to produce recycled waste water for non-potable uses. Supply of this water currently exceeds demand in many jurisdictions across the state. With investment in dual pipe infrastructure, recycled treated wastewater could be used to meet current and future water use needs, increasing water security. In situations of diminished water supply, the option will reduce the need for water restrictions by providing an alternate source of supply for essential household functions such as toilet flushing. This option is anticipated to make a ‘Low’ contribution in years 0 - 5, and a ‘Moderate’ contribution to managing threats to water security across the remaining time periods. It is anticipated that if further initiatives were rolled out that the contribution would increase, however as this option entails two projects, the contribution is likely to remain stable. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users This option relieves pressure on supplies of potable water through enabling use of recycled water. Depending on the scale of the intervention, this option has the potential to moderately meet the need. Metric 2: Increase in the efficiency of irrigation delivery systems This option does not target the efficiency of irrigation systems and so is not likely to have any direct impacts against this metric. Metric 3: Increase in total water available for non-urban water users This option could be applied in both larger and small settlements. While there are benefits of scale achievable in larger places; smaller treatment systems can also be adopted in smaller water supply catchments. Facilitating the use of recycled water would increase water available for non-urban users such as irrigators, the environment, industry and for recreational use and public spaces. Therefore this option is rated as moderate against this option.

Recycled treated wastewater for non-potable use RTH Page 45 Supplement B – Options assessed (document 4 of 4)

Recycled treated wastewater for non-potable use RTH Page 46 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is likely to have benefits for resilience, by expanding infrastructure in the water supply industry to take advantage of new water sources. Replacing higher quality water used in households with recycled treated wastewater conserves the supply of available high quality water. This could allow for greater supply of water to regional and remote communities as well as urban residents in dry periods that enables the continued maintenance of sporting fields and recreational areas such as parks. This option is anticipated to have mixed environmental impacts. This option directly improves efficiency of water usage through recycling, and reduces the release of flows from sewerage plants into the environment. However, recycling water is energy intensive.

Recycled treated wastewater for non-potable use RTH Page 47 Supplement B – Options assessed (document 4 of 4)

Regional train link upgrades RTL

Infrastructure Victoria’s Option Description Upgrade existing public transport links between regional centres and surrounding communities. This option will improve high priority links with increased frequency of service, reduced travel times and greater reliability. Examples of this option could include the purchase of additional rolling stock to support rail shuttles at the end of existing lines, increasing the frequency of long distance services or returning rail services to towns on the freight rail network. Rail shuttles: The initiation of rail shuttles would extend the reach (or service hours) of rail services further into regional communities, and enable the matching of capacity with demand along outer portions of the routes by allowing the use of short (1-2-car) trains in outer communities versus the full-length trainsets that travel into Melbourne. This strategy would rely on the design of termini to allow convenient (same-platform/cross-platform) transfers which could presumably be achieved with modest capital outlay given the minimum of platform space required for 1-2-car trains. A priority/pilot for this type of service (representing the opportunity to increase the number of trains per day) could be the Bendigo-to-Echuca corridor. A potential upgrade in service along this route would be supported by both Echuca-to-Melbourne and Echuca-to-Bendigo demand. The Geelong-to-Warrnambool corridor would similarly represent an opportunity to supplement the existing limited number of through services from Melbourne with shorter Warrnambool-to-Geelong shuttle trains. These upgrades will increase access to jobs, education, health care and other services for people in rural and regional centres. Sector Certainty of evidence Transport Medium Option type Evidence base New or expanded assets State Government of Victoria, Connecting Regional Victoria: Victoria's Regional Network Development Location and spatial context Plan (2016) This option applies to regional towns around Department of Environment, Land, Water & Victoria which are large enough to support public Planning (DELWP), Victoria in Future 2015 and transport connections with neighbouring towns and Victorian Government unpublished population regional centres. projections (2015) Risks and Opportunities A key risk in providing these service upgrades is if the future patronage is not sufficient to justify the service. This may result in an inefficient use of funding and infrastructure. This option may give the ability to cluster jobs and services in regional centres, due to the increase in transport service quality.

Regional train link upgrades RTL Page 48 Supplement B – Options assessed (document 4 of 4)

Direct option cost Managing Growth: Infrastructure for Melbourne's outer suburbs (2015) The capital or implementation cost of the option, plus the annual recurrent costs incurred within the Newman, Doncaster Rail: What are its prospects? 30 year study period of this option is: (2012) $750 million – $1 billion Stakeholder consultation Capital / implementation cost What could influence this option? $25 million – $50 million The need for this option could be influenced by sufficient evidence of demand for public transport services such as these. Annual recurrent costs In response this option would increase the capacity $10 million – $25 million of transport links between regional towns. Option lead time When could it be required? If this option was committed to today, it could be Victoria may need this option to be implemented in: implemented in: 0 – 5 years (2016 – 2021) <1 year What is the risk of deferring this Operational life option? The expected operational life of this option (from If this option were deferred the pattern of regional opening) is: towns shrinking may continue, since the mobility of residents will not be improved. >50 years The risk to the State if this option is deferred is: Cost certainty Low The certainty of costing evidence is rated: Medium The capital cost of this option is based on a pilot project being undertaken along the Bendigo/Echuca corridor. As the rail track is already in place and has capacity to accommodate additional services the only capital costs are expected to be minor associated infrastructure improvements. Rolling stock is assessed out of scope as it is to be provided under option RRS. The costing of this pilot project is, therefore, considered to have similarities to three other options - RCU, RBU and RMU. Rail shuttles: $25 million has been assumed as required for this pilot to allow for signalling and station upgrades as needed. Rail shuttles: The calculated annual recurrent cost is based on each additional coach covering a distance of 600 kilometres per day, 48 weeks of the year. Fuel consumption is assumed to be 200 litres per day per bus (three kilometres per litre) and fuel cost is assumed to be $1.25 per litre. Driver, management, administrative wages, stabling and maintenance facilities total $1 million per annum. Costing source Public Transport Victoria (PTV) website, Network Statistics (2016) Public Transport Victoria (PTV) website, Bendigo Metro Rail Project (2016) Regional train link upgrades RTL Page 49 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 12: Improve access to jobs and services for people in regional and rural areas As this option is a network-wide upgrade, the contribution towards the need is highly dependent on the level of services provided. Victoria's Regional Network Development Plan reiterates the importance of this option for people living in regional areas, indicating that a case for further investigation exists (State Government of Victoria 2015). Better connectivity between regional towns can allow for the clustering of jobs and services while also increasing the agility of the labour force to adjust to changing market conditions in their towns without the need to move house. Although the Victoria in Future population projections broadly show regional centres growing with surrounding communities declining (DELWP, 2015), increased accessibility to jobs and services through the provision of public transport in regional towns may slow this trend. This option receives a 'Moderate' contribution rating against Need 12 in time period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas By increasing the provision of public transport between regional towns and centres, it increases the mobility of Victorians living in regional areas. These services may induce demand for trips like this, which currently may be made in private cars or not happening at all due to the lack of transport options. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas The potential congestion removed off regional roads and highways is not assumed to be significant to the overall transport network, however improved public transport will make the network more accessible for a greater number of people (increasing its performance). Metric 3: Improvements in ICT connectivity in rural and regional areas This option may offer an opportunity to give people in regional and rural areas additional access to the internet through the provision of Wi-Fi on the services provided, although it is assumed if the customer has a Wi-Fi capable device this would not be their only source of ICT connectivity.

Regional train link upgrades RTL Page 50 Supplement B – Options assessed (document 4 of 4)

Regional train link upgrades RTL Page 51 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary By upgrading the transport connections between neighbouring regional towns with regional centres, it increases the ability for people to access jobs, services, education and social opportunities. These transport connections are assumed to have a positive impact on tourism in regional Victoria, as trips to regional towns may increase as public transport service quality is improved.

Regional train link upgrades RTL Page 52 Supplement B – Options assessed (document 4 of 4)

Residential tenancies reform RTR

Infrastructure Victoria’s Option Description Reform of residential tenancies laws and regulations to provide for longer-term rental housing outcomes. Sector Certainty of evidence Health and human services High Option type Evidence base Better use Affordable Development Outcomes, Draft Report to Infrastructure Victoria – Improving Access to Location and spatial context Affordable Housing (2016) Department of Families, Housing, Community This option is applicable to rental properties across Services and Indigenous Affairs, The Road Home: A National Approach to Reducing Homelessness the State. (2008) Risks and Opportunities Justice Connect Homeless Law Group, There's no If the reform process is rushed without adequate place like home: Submission to the Residential consultation it may be ineffective or have Tenancies Act Review (2015) unintended consequences due to the complexities Justice Connect Homeless Law Group, There's no of the housing market and the vulnerability of some place like home: Submission on the Rent, Bonds participants. and other Charges Issues Paper, (2016) For landlords, the option could present the risk of Residential Tenancies Act Review, Security of increased costs, or the inability to increase rents in Tenure Issues Paper (2015) line with the market. This could disincentivise investment in private housing. This option presents scope for significant structural reform of tenancies. This may reduce the need for state and federal government spending in other areas, for example, social housing or other forms of housing support.

Residential tenancies reform RTR Page 53 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the desire to improve choice in the private rental market 30 year study period of this option is: and ensure that legal structures support longer tenure private rental market for those that would $1 million – $10 million prefer it. Capital / implementation cost This option would result in a change in the legal $1 million – $10 million structures supporting tenancies to reflect changing needs of tenants in the private rental market. Annual recurrent costs When could it be required? <$1 million Victoria may need this option to be implemented in: 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be implemented in: option? 1 – 5 years If this option were deferred, existing legal arrangements would remain in place. Some parties Operational life in the private rental market may be able to negotiate their desired outcomes under this framework, The expected operational life of this option (from whereas others could be in a weaker bargaining opening) is: position relative to the circumstance of reform. 10 – 25 years The risk to the State if this option is deferred is: Cost certainty Low The certainty of costing evidence is rated: Low This is considered a very large size policy option that would involve initial policy drafting, consultation with key stakeholders and the community, and final policy implementation. This process is expected to involve public servants and potentially private sector consultants over a period greater than one year. The recurrent cost assumes that the cost of managing the policy addition is absorbed by the existing State Government budgets. Costing source Stakeholder consultation

Residential tenancies reform RTR Page 54 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 7: Provide better access to housing for the most vulnerable Victorians The Residential Tenancies Act Review (2015) documents that residential mobility in Victoria has shown a decreasing trend over the past twenty years, that is, Victorians in both the private rental market, and Victorians who own their own homes, are moving less frequently. Therefore, there is likely to be increased demand for contracts that support longer term tenancy arrangements. The review quotes research from the Tenants Union of Victoria indicating that 65 percent of tenants in the private rental market preferred the flexibility of short term leases, which are viewed as presenting the opportunity to move in response to changing circumstances (i.e. family, employment, study, existing the rental market through purchase of a property) (The Residential Tenancies Act Review 2015). This suggests that the remaining 35 percent of tenants may be interested in longer arrangements. It is unclear whether those desiring longer term arrangements are vulnerable in the housing market, but increasing tenancy protection may have benefits for housing market outcomes for these groups. If those desiring longer term arrangements can be better protected, they may be more likely to remain in the private rental market (and experience less stress). Potentially, the overall incidence of homelessness can be reduced because those who may have experienced extreme housing stress under previous laws may be better protected. The contribution to the need is assessed as ‘Moderate’. It is expected that this option requires a range of reforms, not just one single reform to the act. As such, it is expected it may take more than five years to implement all necessary reforms, and see the benefits from each, particularly with the need for stakeholder engagement and consultation prior to reforming the act. The contribution to the need may begin from the implementation of the first reform (expected to be possible in the next five years), which will likely have a ‘Low’ contribution. However, once more reforms are introduced in the next 5-10 years the benefits will likely increase to ‘Moderate’. Metric 1: Reduction in housing stress for lower income households in the rental market This option is directly targeted at reform to improving the legal arrangements for private tenancies. If low income tenants can have better protection and security of affordable tenure, this would likely address housing related stress. Metric 2: Reduction in average waiting time of people on the social housing register waitlist This option may reduce demand for social housing by improving the certainty of tenure in the private market. Although this option does not propose an increase in social housing supply, a decline in demand may reduce wait times for existing social housing. Metric 3: Ability to provide homeless people a pathway into housing This option does not directly target homeless people or provide them a pathway to housing, rather it indirectly effects homelessness in two ways. Firstly, improving protections to vulnerable tenants in the housing market could result in fewer incidences of homelessness, for example, through less scope for significant increase in rents or improved protection against eviction in the private market. Secondly, improving outcomes in the private rental housing market more generally could reduce demand for social housing and as such there may be increased capacity for others, including homeless people and those with high needs, to gain access to social housing units.

Residential tenancies reform RTR Page 55 Supplement B – Options assessed

Residential tenancies reform RTR Page 56 Supplement B – Options assessed

Economic, social and environmental assessment summary This option would support tenants seeking to secure a long term supply of housing in the private market. There is also the potential of benefits to housing affordability, depending on the reforms implemented and the market response. Reforms in favour of tenants would likely support low social-economic index communities, as members of these communities may experience reduced bargaining power in the private rental market compared to other participants. There is a chance than costs to business (i.e. landlords) may increase under this option, as the option appears likely to extend the regulation of the private housing supply. Depending on the nature of reforms, there could be a risk of reduced investment in residential investment if profitability of investment properties appears to be lower or the associated risks of holding rental properties increase.

Residential tenancies reform RTR Page 57 Supplement B – Options assessed

Recycled treated wastewater for drinking RWW

Infrastructure Victoria’s Option Description Review of government policy and investment in infrastructure to enable uptake of recycled treated wastewater for drinking. This option would allow wastewater to be treated to a quality suitable for drinking in order to supplement drinking water supplies. Wastewater treated to a quality suitable for drinking can be utilised directly through connection into mains water supply systems (direct potable reuse) or indirectly through discharge into rivers, storages or aquifers that then provide supply for drinking water systems (indirect potable reuse). This option proposes consideration of both mechanisms to enable increase water availability. The United Kingdom, California and Singapore provide examples of government policy to enable the use of recycled treated wastewater to meet potable water demands. Subsequent investment in infrastructure (by the private sector or State-Owned enterprises) is then required. This option could include building a new asset or expansion of existing assets. Treating wastewater to drinking quality is costly but it has great potential to meet the need of managing threats to water security. Sector Certainty of evidence Water and waste Medium Option type Evidence base New or expanded assets Deloitte/Aurecon for Infrastructure Victoria, Infrastructure Capability Assessment, Water and Location and spatial context Waste (2016) Statewide CSIRO and Bureau of Meteorology, Climate Change in Australia Information for Australia’s This option has the potential to impact all Victorians. Natural Resource Management Regions: Technical Risks and Opportunities Report (2015) Monitoring quality of water output at plant for safety National Water Commission, Using recycled water outcomes will be required, and monitoring of for drinking, Waterlines Occasional Paper no.2 discharge to make sure that it is meeting (2007) environmental requirements. Australian Academy of Technological Sciences and There may be an opportunity to introduce this with Engineering, Drinking Water Through Recycling: other 'new' water sources such as desalinated The Benefits And Costs Of Supplying Direct To The water. Distribution System (2013)

Recycled treated wastewater for drinking RWW Page 58 Supplement B – Options assessed

Direct option cost Costing source The capital or implementation cost of the option, Australian Government National Water plus the annual recurrent costs incurred within the Commission, Using recycled water for drinking 30 year study period of this option is: (2007) $5 billion – $10 billion Queensland Government Department of Infrastructure and Planning, Final Progress Report Capital / implementation cost (2009) $1 billion – $3 billion RBA website (2016)

Annual recurrent costs What could influence this option? $50 million – $100 million This option would be influenced by the need for major augmentation the timing of which is uncertain and can be delayed by uptake of localised Option lead time solutions. If this option was committed to today, it could be In response this option would increase water implemented in: security through rainfall independent water supply. 10 – 15 years When could it be required? Operational life Victoria may need this option to be implemented in: The expected operational life of this option (from 15 – 30 years (2031 – 2046) opening) is: What is the risk of deferring this 25 – 50 years option? Cost certainty If this option were deferred other options to The certainty of costing evidence is rated: minimise water demands or investigate alternative supply may be required. Medium The risk to the State if this option is deferred is: The estimated capital cost is based on the Western Corridor Recycled Water project that was Medium completed at a cost of $2.5 billion in 2008. Escalated to 2015 dollars this is $2.93 billion. The Western Corridor Recycled Water project draws water from six existing wastewater treatment plants in Queensland's south east. It involved construction of more than 200 kilometres of pipeline as well as three water treatment plants at Bundamba, Luggage Point and Gibson Island that are collectively capable of producing 232 megalitres of water per day, or approximately 85 billion litres per year. The estimated capital cost of this option assumes that the scale of the treated wastewater plant is of the same scale and the same cost in 2015 dollars as the Western Corridor Recycled Water project. Potable water output for this scale and cost is expected to be in the range of 85 billion litres per year. The cost may vary depending on site specific considerations and the range quoted allows for almost twice the capacity to be built. Recurrent costs are assumed to be three percent of capital costs, and this covers maintenance works, but not operational works.

Recycled treated wastewater for drinking RWW Page 59 Supplement B – Options assessed

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas CSIRO research, alongside other investigations, identifies that climate change is likely to reduce the certainty of traditional, rain-fed sources of water supply. Additionally, current water supplies will come under pressure due to increased population and economic activity. This option responds to these pressures by proposing new supply. The full contribution of the option against the need will depend on how the option is implemented. A number of small scale investments to process recycled treated wastewater to potable quality could be made around the state. Alternatively, Melbourne’s large treatment plants could be upgraded and infrastructure used to transfer or supplement supply to various areas. The treated recycled potable water can also be directed to existing storages to increase overall water availability. It is assumed that this option would be investigated after the desalination plant is in use, meaning that the resilience benefits the desalination plant now offers are exhausted. It is challenging to forecast future rainfall; however, it has been assumed that this occurs towards the end of the next thirty years. This option receives a 'Moderate' contribution rating in years 0-5, increasing to 'Significant' from years 5-30. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users The ability of this option to increase supply of water provides a significant contribution against the metric. Metric 2: Increase in the efficiency of irrigation delivery systems This option does not target the efficiency of irrigation systems and so is not likely to have any direct impacts against this metric. Metric 3: Increase in total water available for non-urban water users The implementation of the option will determine the full contribution against this metric, although there may be limitations in supplementing water or transferring water across the State.

Recycled treated wastewater for drinking RWW Page 60 Supplement B – Options assessed (document 4 of 4)

Recycled treated wastewater for drinking RWW Page 61 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Water is required to support the health of the Victorian population, and is used in commercial, residential and social settings. This option increases the supply of water in Victoria by using technology to recover water suitable for drinking from wastewater. By increasing the supply of water, the option has benefits for resilience and economic growth. The use of new technology is also anticipated to benefit business innovation, and increases the supply of an input to production. In situations of water scarcity, the option is likely to have benefits for health, business continuity, access to social infrastructure and securing water for the environment. Due to the energy intensity of the technology used to recover water, the option has some adverse environmental impacts. There are strong environmental benefits in terms of water use. By re-using a currently disposed water resource this option reduces pressure on river systems.

Recycled treated wastewater for drinking RWW Page 62 Supplement B – Options assessed (document 4 of 4)

Affordable housing development incentives SAH

Infrastructure Victoria’s Option Description This option proposes the introduction of voluntary incentive based statutory planning mechanisms to increase the supply of affordable housing, in particular affordable private rental dwellings. Mechanisms include :

- offering development bonuses related to building height, density or floor ratios - reduced building setbacks - reducing car parking requirement - removing unnecessary planning obstacles to smaller scale infill housing programs such as accessory or ancillary units (e.g. granny flats, secondary suites) or laneway units. - shortening and guaranteeing timeframes for assessment of planning applications. Further work is required to determine the approach without compromising design quality or amenity to the development and the broader community. It is also important that incentives are targeted at the developer, enabling a component of the benefit to be applied to affordable housing and not inadvertently passed to the landowner in the form of land value uplift. This approach is noted in the Plan Melbourne Refresh Discussion Paper, however the Plan Melbourne Refresh response had not been released at the time of drafting this document. Sector Certainty of evidence Health and human services Medium Option type Evidence base Better use/New or expanded assets Affordable Development Outcomes, Draft Report to Infrastructure Victoria – Improving Access to Location and spatial context Affordable Housing (2016) Statewide Council on Federal Financial Relations, Affordable This option would most likely affect Greater Housing Working Group: Issues Paper (2016) Melbourne and the regional centres. Grattan Institute, Getting the housing we want (2011) Risks and Opportunities Productivity Commission, Performance Concessions offered to developers, such as Benchmarking of Australian Business Regulation: reduced building setbacks, would need to be Planning, Zoning and Development Assessments applied sensitively to preserve amenity for residents (2011) and stakeholders. Coordination between State and Local Government in delivery could increase the benefits of this option.

Affordable housing development incentives SAH Page 63 Supplement B – Options assessed (document 4 of 4)

Direct option cost Costing source The capital or implementation cost of the option, Stakeholder consultation plus the annual recurrent costs incurred within the 30 year study period of this option is: What could influence this option? $10 million – $25 million The need for this option could be influenced by the intention to increase the supply of affordable Capital / implementation cost housing, and the comfort with using concessions to developers to achieve this goal. $1 million – $10 million In response this option would increase the supply of Annual recurrent costs affordable housing. <$1 million When could it be required? Victoria may need this option to be implemented in: Option lead time 0 – 5 years (2016 – 2021) If this option was committed to today, it could be implemented in: What is the risk of deferring this <1 year option? Operational life Then it is likely that the available supply of affordable housing would be lower and/or The expected operational life of this option (from developed in areas with lower land values. opening) is: The risk to the State if this option is deferred is: 10 – 25 years Low Cost certainty The certainty of costing evidence is rated: Low As per the description, this option proposes the introduction of voluntary incentive based statutory planning mechanisms to increase the supply of affordable housing, in particular affordable private rental dwellings. This option is considered to include a very large size policy and incentive development component that, from the State Government in association with private sector consultants, would involve preparation of policy and associated documentation, public and key stakeholder consultation, review and response to public submissions, and preparation of final policy documentation. As this is a voluntary incentive based schemes targeting changes to construction norms within the residential sector (particularly well serviced areas suitable for high and medium density housing, close to transport and social and commercial facilities), it is assumed the private sector will bear any increased and/or decreased profit margins. The only cost to the State Government would be those associated with drafting and implementing changes to the Victorian Planning Provisions (VPPs). Changes to local planning schemes (to specify well serviced areas) would be expected to be done within existing LGA budgets. The recurrent cost assumes that the cost of managing the policy addition is absorbed by the existing State Government budgets.

Affordable housing development incentives SAH Page 64 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 7: Provide better access to housing for the most vulnerable Victorians The need for more affordable housing for vulnerable Victorians has been identified by Infrastructure Victoria. Affordable housing is understood to “reduce or eliminate housing stress for low-income and disadvantaged families and individuals” (Council on Federal Financial Relations 2016), including through the provision of the private rental dwellings targeted by this option. An estimate of the number of low-income and disadvantaged families and individuals is provided by Affordable Development Outcomes report, which considers the number of Commonwealth Rental Assistance (CRA) recipients in private rental in Victoria paying more than thirty percent on housing, namely:

- 38,380 CRA recipients paying more than 50 percent of income on housing (Victoria) - 51,832 very-low income (Q1) CRA recipient households paying over 30 percent income in Melbourne - 20,192 low income (Q2) CRA recipient households in paying over 30 percent income in Melbourne (Affordable Development Outcomes 2016). This option would address the need for affordable housing by creating incentives for developers to target the affordable housing market. There is evidence that barriers to development influence the housing stock provided (Grattan 2011) and that planning and zoning practices could in many cases be simplified (Productivity Commission 2011). Additionally, the Council on Federal Financial Relations attributes a relative undersupply of affordable housing to “restrictive planning, zoning and land release policies have the effect of limiting the available supply of development sites for new housing” and the risk profile of tenants in affordable housing (Council on Federal Financial Relations 2016). By creating incentives for the development of new affordable housing, it is anticipated that this option could make a ‘Moderate’ contribution to the need overall. Metric 1: Reduction in housing stress for lower income households in the rental market By increasing supply of affordable housing, this option could reduce the level of housing stress for lower income households. Metric 2: Reduction in average waiting time of people on the social housing register waitlist This option is not expected to directly impact on this metric. The option may have indirect benefit by reducing pressure on other types of affordable housing. Metric 3: Ability to provide homeless people a pathway into housing This option is not expected to directly impact on this metric. The option may have indirect benefit by reducing housing cost pressure on low income earners

Affordable housing development incentives SAH Page 65 Supplement B – Options assessed (document 4 of 4)

Affordable housing development incentives SAH Page 66 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary By promoting additional supply of affordable housing, this option is expected to benefit housing supply and affordability, and support low social economic areas where households may be more vulnerable to housing stress. This option is anticipated to support business innovation and/or reduce business costs by reducing regulatory barriers faced by developers to encourage development of more affordable housing. Increasing the supply of affordable housing is considered likely to reduce state costs, for example, in the intervention in housing market, or due to positive social outcomes associated with more secure housing supply.

Affordable housing development incentives SAH Page 67 Supplement B – Options assessed (document 4 of 4)

Schools as community facilities SCF

Infrastructure Victoria’s Option Description This option supports the utilisation of school assets by the broader community. This could include community use of school grounds and facilities such as indoor courts outside of school hours, as well as the integration of spaces, early years and other facilities, that help make schools a relevant place for the whole community. Funding of conversion packages would be made available to schools for initial infrastructure investment. An increase in ongoing funding for maintenance and insurance etc. may also be required to cover increased use of assets. Good governance and shared use agreements are likely to be required, and a lead broker agency will also be needed to bring potential partners together well in advance of the design phase. This ‘lead broker’ could be a representative from the school, local Council or State government. We think there is evidence that integration of services leads to improved outcomes for the community and those services. Department of Education and Training research showed that integration of two or more service components can lead to a more joined-up experience for families, improved service effectiveness and increased service efficiencies. There can also be significant cost savings if facilities to be used by schools and the broader communities, such as indoor sports facilities, are delivered together. In September 2009, the Victorian Competition and Efficiency Commission released the final report Getting it Together: An Inquiry into the Sharing of Government and Community Facilities which identified the need for governance arrangements and coordination to enable shared use of facilities. Sector Certainty of evidence Education and training Low Option type Evidence base Better use Department of Education and Training, Schools as Community Facilities: Policy Framework and Location and spatial context Guidelines (2005) This option could be implemented at existing school Victorian Competition and Efficiency Commission, facilities Statewide. Getting it Together: An Inquiry into the Sharing of Government and Community Facilities (2009) Risks and Opportunities Schools and community partners will need to develop an appropriate governance structure to address impacts on school security and safety, maintaining records of the arrangements and taking responsibility for maintenance. Community access to school facilities must also comply with regulatory requirements, including obtaining appropriate planning permissions, insurance and occupational health and safety and general safety. This option could be developed in conjunction with option LLH – Lifelong learning hubs, to identify appropriate schools for increased community access and to manage disruption to school activities.

Schools as community facilities SCF Page 68 Supplement B – Options assessed (document 4 of 4)

Direct option cost Department of Health and Human Services, 2016- 17 Community Sports Infrastructure Fund: The capital or implementation cost of the option, Application Guidelines (2015) plus the annual recurrent costs incurred within the 30 year study period of this option is: What could influence this option? $750 million – $1 billion The need for this option could be influenced by public acceptance of increased community access Capital / implementation cost to school facilities, the identification of appropriate $750 million – $1 billion schools and facilities, and the political impetus to implement. Annual recurrent costs In response this option would increase community access to sporting, cultural and technological $1 million – $10 million infrastructure. Option lead time When could it be required? If this option was committed to today, it could be Victoria may need this option to be implemented in: implemented in: 0 – 5 years (2016 – 2021) 1 – 5 years What is the risk of deferring this Operational life option? The expected operational life of this option (from If this option were deferred the community would opening) is: continue access these facilities through alternative means. 10 – 25 years The risk to the State if this option is deferred is: Cost certainty Low The certainty of costing evidence is rated: Low It is assumed that all new schools and 50 percent of Victoria's 1,524 government schools adapt infrastructure to encourage shared community use at an average cost to the State Government of $1,000,000 per school. This option is also a medium level policy change. State Government resources will be needed to draft policy and any necessary legislative changes, including consideration of the implications for insurance and other costs. The costs for establishing appropriate governance relationships for shared use is anticipated to be absorbed by schools, local councils and community groups. In the case of new school development, it is likely that ongoing policy resources would be required to coordinate planning between the Department of Education and other stakeholders. Annual recurrent costs are assumed to be absorbed by existing school, and community stakeholder, budgets. Efficiency gains through shared use are expected to free up funds sufficient to meet annual recurrent costs. Costing source Department of Education and Training, Summary Statistics for Victorian Schools (2016)

Schools as community facilities SCF Page 69 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth Community infrastructure is can be seen as “follower”, that is, it is developed in response to the needs of communities as they establish themselves (SGS Economics and Planning 2016). Local government often has a major role in community infrastructure development and operation As population growth occurs in new development, residents and local government may need to develop a range of infrastructure and services, and the State Government may also need to develop new schools. School sites have a range of spaces and facilities which could be used by the broader community, for example, halls, meeting spaces and recreation facilities (Department of Education and Training, 2005). Other uses of school facilities include school-aged holiday, before- and after-school programs, providing information technology centres for community use, and sharing libraries and performing arts centres (Department of Education and Training, 2005). Early years facilities can also be integrated onto school sites. Therefore, there is a strong opportunity in greenfield high growth areas to implement this option to improve access to infrastructure, reduce the cost and increase the effectiveness community infrastructure. The contribution to this need is rates as ‘Significant’ in all time periods. Metric 1: Ability to improve access to services or increase service capacity for high growth areas Shared use, and planning for development of shared use facilities, could accelerate the growth in access to services in high growth areas.

Need 2: Address infrastructure challenges in areas with low or negative growth As detailed in Need 1, school sites can include a range of infrastructure that can be used by other groups within the community. To implement this option in areas with low or negative growth, shared use arrangements for this infrastructure could be developed, and school infrastructure upgraded to meet expanded needs where necessary. Improving the utilisation of school infrastructure could allow communities to consolidate infrastructure assets such as kindergartens without sacrificing access to services. This option is likely to have a ‘Significant’ contribution to the need, and the contribution is expected to grow over time as trends to low or negative growth develop. Metric 1: Ability to optimise infrastructure delivery while maintaining or improving service delivery within low growth areas This option presents the opportunity to improve the utilisation of existing infrastructure, and for consolidation of other infrastructure that is surplus to demand.

Need 4: Enable physical activity and participation A key benefit of this option would be the increased ability of the community to access the sporting facilities located within schools. Such access has been demonstrated to be popular with the community. The Victorian Competition and Efficiency Commission provided the case study of the development of a basketball stadium at Mornington Secondary College, funded through a joint use agreement with government which enables community access (Victorian Competition and Efficiency Commission, 2009). As schools may not be required to earn a commercial rate of return on its facilities, the costs to individuals of hiring school sporting facilities may be favourable in comparison to private sports centres, which could increase their use across the community. This option receives a ‘Significant’ rating against Need 4 in each time period. Metric 1: Increase in access to infrastructure to encourage physical activity This option will increase community access to a range of infrastructure to encourage physical activity, such as sporting ovals, sports centres and swimming pools. Metric 2: Increase in physical participation rate Given the increased access to sporting infrastructure, this option may increase the physical participation rate across the community. Schools as community facilities SCF Page 70 Supplement B – Options assessed (document 4 of 4)

Need 5: Provide public spaces where communities can come together Schools have a range of spaces and facilities which could enable the community to come together, including to use school premises for community halls, meeting spaces and recreation facilities, creating spaces to support, before- and after-school programs, providing information technology centres for community use, and sharing libraries and performing arts centres (Department of Education and Training, 2005). Early years facilities can also be integrated into school sites. These facilities and spaces may not otherwise be easily accessible within the broader community. Not all schools in all locations will be able to offer the same range of facilities for community use, but, to the extent that this option increases the number and variety of spaces where communities can come together, it is likely to improve the perceived quality of community spaces within the general public. This option receives a ‘Moderate’ rating against Need 5 in all time periods. Metric 1: Improvements in perceived access to and quality of open and community spaces This option may increase the number of variety of spaces available for the community to come together. As such, it is likely to improve the public’s perceived quality of open spaces and community spaces. Metric 2: Increase in arts participation and attendance This option is not likely to directly affect arts participation and attendance, although it could increase the number of facilities available for the staging of arts events.

Need 9: Provide access to high-quality education infrastructure to support lifelong learning This option would support lifelong learning in that it would increase the number of venues with spaces designed for teaching and learning for community groups who run courses and classes (ranging from early years to adult- education classes). Since this option can only be enacted in areas with appropriate facilities, it receives a ‘Moderate’ across all time periods. Metric 1: Increase in overall education asset utilisation This option will increase overall education asset utilisation by using school facilities on nights and weekends. Metric 2: Increase in education participation This option will increase the ability for people to access classes (since there will be more potential venues available).

Need 12: Improve access to jobs and services for people in regional and rural areas Regional communities may be less likely to be able to access a range of services within their local communities. This option may increase the variety of services available to the community if schools have facilities which people would otherwise have travelled outside the community to access. These could include libraries or indoor sports facilities This option may increase ICT connectivity in rural and regional areas, if school computing facilities are opened up for community access. Access to these services would need to be managed around the needs of the school to access these facilities however, so overall this option is not anticipated to provide a significant contribution to Need 12. This option receives a ‘Low’ contribution rating in each time period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas This option may increase the number and scope of services available to community members in rural and regional areas. However, it may be unlikely that schools within rural and regional communities would have the facilities which individuals would otherwise have travelled outside the area to access. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas This option is not anticipated to improve transport performance across the network.

Schools as community facilities SCF Page 71 Supplement B – Options assessed (document 4 of 4)

Metric 3: Improvements in ICT connectivity in rural and regional areas By providing school ICT resources for community use, this option may increase the ICT connectivity of rural and regional communities, though public access would need to be accommodated around the school’s need to use this technology.

Schools as community facilities SCF Page 72 Supplement B – Options assessed (document 4 of 4)

Schools as community facilities SCF Page 73 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary By providing additional means for the public to access community facilities, this option may be able to reduce disruptions. It is likely to improve community access to social, sporting and recreational facilities, and may potentially benefit regional communities by expanding access to locally located facilities. As this option is implemented over time, this option is also expected to improve resource use (for example, of land), although the benefits are unlikely to become appreciable.

Schools as community facilities SCF Page 74 Supplement B – Options assessed (document 4 of 4)

Affordable Social housing infrastructure investment framework SCP

Infrastructure Victoria’s Option Description Develop and publish a 30-year infrastructure strategy for affordable housing that responds to forecast population growth, decline and demographic change. The strategy would outline set targets for the location and numbers of different types of housing to be made available. It would also include a pipeline of supporting funding and land release, with the land being provided by local and state government. The strategy would address:

- public and community housing - rationalisation of existing housing stock (as outlined in option SHA); and - provision of new housing under several different models of delivery and management (including those identified in options SHG, SAH, SHP1, GOM, SHD1 and CLT. Sector Certainty of evidence Health and human services Medium Option type Evidence base Better use Affordable Development Outcomes, Draft Report to Infrastructure Victoria – Improving Access to Location and spatial context Affordable Housing (2016) Statewide Infrastructure Victoria, Draft Options Books: Need 7 – provide better access to housing for the most This option has the potential to impact all Victorians. vulnerable Victorians (2016) Risks and Opportunities Metropolitan Planning Authority, Policy and Strategy – growth areas (2016) This option could enhance the effectiveness of other options relating to housing, for example, options ARH, CHP, SHE, TSA and SHA)

Affordable Social housing infrastructure investment framework SCP Page 75 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the existing and forecast future demand for housing 30 year study period of this option is: interventions to support vulnerable households. Vulnerable households have been identified $1 million – $10 million "defined as earning less than 80 per cent median Capital / implementation cost household income) and low-income households. This option would likely involve planning for crisis $1 million – $10 million housing, transitional housing, public and community housing, affordable housing and refurbishment of Annual recurrent costs existing public and community housing. <$1 million In response this option would reduce the risk of interventions in the housing market through integrated planning to identify potential and future Option lead time housing needs and the location of demand. The If this option was committed to today, it could be policy development could also include new implemented in: frameworks and incentives to support investment to meet these needs. <1 year When could it be required? Operational life Victoria may need this option to be implemented in: The expected operational life of this option (from opening) is: 0 – 5 years (2016 – 2021) 25 – 50 years What is the risk of deferring this Cost certainty option? If this option were deferred, then the benefits The certainty of costing evidence is rated: realised from individual interventions to address Low aspects of the housing market could be reduced. Infrastructure Victoria's operational budget is $10 The risk to the State if this option is deferred is: million per year, and this enables them to meet their Low task of providing a 30 year infrastructure strategy in 2016 as well as provide independent and transparent advice to Government on infrastructure priorities. The scope of this option is assumed to be about 10-30 percent of the scope of Infrastructure Victoria's, and has been costed as such. There would be minimal direct recurrent costs following strategy release. Costing source Department of Treasury and Finance, Victorian Budget 16/17: Service Delivery (2016)

Affordable Social housing infrastructure investment framework SCP Page 76 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth High population growth may increase pressure on housing affordability in the future, especially if the supply of accommodation does not keep pace with demand. While the profile of high growth suburbs varies, it is anticipated that in greenfield developments, such as the designated growth LGAs by the Metropolitan Planning Authority (Casey, Cardinia, Hume, Melton, Mitchell, Whittlesea and Wyndham), there may be gaps in the supply of housing for vulnerable Victorians, including crisis housing, transitional housing, and public or community housing. This option, by setting a strategic direction to address housing needs, may assist to close these gaps by highlighting areas of undersupply for investment, or setting in place the frameworks for incentives to develop supply. Land use planning that could be developed under this option could be particularly effected in greenfield developments. In more established areas anticipated to experience high growth, such as the city of Melbourne, interventions involving planning changes may be less effective. The overall contribution of the affordable housing strategy will be highly dependent on the level of funding provided to implement its recommendations. However, the issue of housing affordability cannot be addressed by a single solution, and a range of housing solutions, financial support packages and additional social support services will all be required. This option will provide the strategy to bring all elements of the solution together. Although the strategy in and of itself cannot fully address the issue of housing affordability, it will be a critical element of the government's response. As such, this option receives a 'Moderate' contribution rating against Need 1 in each time period. Metric 1: Ability to improve access to services or increase service capacity for high growth areas The strategy may indirectly result in an increase of the supply of housing that meets the needs of vulnerable Victorians in high growth areas.

Need 2: Address infrastructure challenges in areas with low or negative growth Areas of low or negative population growth are anticipated to have specific needs in relation to housing. Low or negative population growth could indicate that the supply of housing is more likely to keep pace with demand for housing, especially in the case of negative growth. The pressures on affordable housing supply may therefore be reduced. This option, through setting a strategic direction to address housing needs, could highlight areas where existing housing and housing support services do not meet the demands of population change, or are in surplus to demand. This option could also support the development of new solutions, which could be more flexible to meet the demands of low growth communities. Similarly to Need 1, this option receives a 'Moderate' contribution rating against Need 2 in each time period, as it will be a critical component of any housing affordability solution. Metric 1: Ability to optimise infrastructure delivery while maintaining or improving service delivery within low growth areas This option is likely to identify areas where current service models are not meeting changing demands, and allow for the targeting of investment. This option involves policy development only, without the funding necessary to alter where and how built solutions are provided or adapted.

Need 7: Provide better access to housing for the most vulnerable Victorians This option is to develop a strategy that would address existing and emerging needs for the spectrum of housing from crisis accommodation to affordable housing. The strategy would identify supporting actions that government could take, for example, establishing a pipeline of land funding and land release, or incentive planning mechanisms. The strategy would play an important role in coordinating investment across housing needs statewide. The strategy in and of itself is not anticipated to respond to current demand for housing services, from crisis accommodation to affordable housing, which is likely to come under increased pressure in the future due to population growth. The strategy as described is for policy development not implementation of built solutions to increase capacity, and the strategy does not appear to offer significant demand management initiatives.

Affordable Social housing infrastructure investment framework SCP Page 77 Supplement B – Options assessed (document 4 of 4)

Similarly to Needs 1 and 2, this option receives a 'Moderate' contribution rating against Need 2 in each time period, as it will be a critical component of any housing affordability solution. Metric 1: Reduction in housing stress for lower income households in the rental market Over time, an integrated housing policy, including planning for affordable housing may increase the supply of affordable housing, for example, through the use of tools such as planning incentives. However, the option does not include a funded commitment to expand supply. Metric 2: Reduction in average waiting time of people on the social housing register waitlist Over time, an integrated housing policy may reduce the social housing register waitlist, for example, through expanding the supply of affordable housing or transitional housing services. However, this option concerns the policy framework only, not funding for increased capacity. Metric 3: Ability to provide homeless people a pathway into housing Over time, an integrated housing policy may provide homeless people with a pathway to housing, for example, planning for improved transitional services, or increasing capacity in public and community housing. However, this option concerns the policy framework only, not funding for increased capacity.

Affordable Social housing infrastructure investment framework SCP Page 78 Supplement B – Options assessed (document 4 of 4)

Affordable Social housing infrastructure investment framework SCP Page 79 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option intends to implement a strategy to improve housing accessibility, and has been assumed to achieve this aim. Improved housing accessibility is likely to support low socio-economic areas, where Victorians may be most at risk of housing related stress. The development of a strategy to integrate the planning for different kinds of housing market interventions is likely to result in reduced state costs through better coordination of spending.

Affordable Social housing infrastructure investment framework SCP Page 80 Supplement B – Options assessed (document 4 of 4)

Public housing asset rationalisation and refurbishment SHA

Infrastructure Victoria’s Option Description More than 30 per cent of existing public housing is over 30 years old and was built to meet the needs of a community that has changed. Public housing built during this time is generally suited to larger families however, there is a greater demand from smaller households. Consequently a significant proportion of government owned social housing assets are not fit for purpose and also in poor condition. This option proposes to refresh and renovate suitable assets and invest in better purpose built accommodation apartments through the sale of old unsuitable assets. Elements of the refresh could be funded and financed under several different approaches, involving the non-government and private sectors and also involving consideration of issues such as transfer of land ownership. These different approaches also provide opportunities for the introduction of community owned and managed housing and private housing on the site. Sector public housing sites to include both social and private housing (Citta Property 2016). Health and human services Certainty of evidence Option type Medium Better use/New or expanded assets Evidence base Location and spatial context Affordable Development Outcomes, Draft Report to Statewide Infrastructure Victoria – Improving Access to This option would most likley affect Greater Affordable Housing (2016) Melbourne and the regional centres. Citta Property Group, Living Carlton (website, accessed July 2016) Risks and Opportunities Council to homeless persons, Making social There is documented underutilisation in some housing work – better homes for low income instances and overcrowding in others of public Victorians (2014) housing and community housing (Affordable Development Outcomes 2016). This option could Department for Family and Community Services enable better use of assets. (NSW), Future directions for social housing in NSW (2015) There has been a large increase in the number of social housing tenants receiving the Disability Support Pension, and this option could present an opportunity to make the current stock of social housing more reflective of their needs. Under this option there may also be scope for improved allocation choices i.e. social housing properties are advertised and tenants are given some choice in finding and accepting a vacancy without forfeiting their right to stay in the housing queue, or a NSW proposal to place people in private rental leased properties until a suitable social housing unit is available. Additionally, this option could provide an opportunity for innovative investment in new social housing facilities, particularly inclusionary zoning and mixed purpose developments, subsidised by private sales residencies in the same property. An example is the ‘Living Carlton’ redevelopment of three inner city

Public housing asset rationalisation and refurbishment SHA Page 81 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the opportunity to improve the fit of the existing social 30 year study period of this option is: housing stock to current and anticipated future needs. $5 billion – $10 billion In response, the option provides for remodelling Capital / implementation cost existing social housing to better meet the needs of $5 billion – $10 billion current tenants. This could include providing targeted accommodation options for those with disabilities, or dwellings for smaller households. Annual recurrent costs When could it be required? <$1 million Victoria may need this option to be implemented in: Option lead time 0 – 5 years (2016 – 2021) If this option was committed to today, it could be What is the risk of deferring this implemented in: option? 1 – 5 years The standard of social housing may decline but if Operational life funds were directed elsewhere (e.g. to construction of new public housing units) then quantity may The expected operational life of this option (from increase, and as such more people may have opening) is: access to social housing. 25 – 50 years The risk to the State if this option is deferred is: Cost certainty Low The certainty of costing evidence is rated: Low There are 84,000 social housing dwellings in Victoria that need to be maintained on an ongoing basis (VAGO 2012). These dwellings total to a $17.8 billion property portfolio (VAGO 2012), meaning each property is valued on average at $212,000. It is assumed for the capital cost estimation of this option that 20,000 require heavy renovation or replacement every 10 years at an average cost of $100,000, and that this work is delivered on a continuous rolling basis. The recurrent cost is assumed to be 1 percent of property portfolio valuation (for repurposed stock), and this responds to the need for minor maintenance and upgrading of facilities following heavy renovation or replacement. This is assumed to be absorbed by existing repair and maintenance budgets for social housing. Costing source Victorian Auditor-General’s Office (VAGO), Access to Public Housing (2012)

Public housing asset rationalisation and refurbishment SHA Page 82 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 7: Provide better access to housing for the most vulnerable Victorians Affordable Development Outcomes estimates that there is a need to provide targeted affordable housing for 70,000 to 100,000 low income households (Affordable Development Outcomes 2016). Although the contribution to the metrics supporting this need is anticipated to be low, without investment in the existing supply of social housing it is likely that capacity would decrease as buildings age and are decommissioned. This option may have some benefits to supply of social housing, as Affordable Development Outcomes (2016) estimates that close to 15 percent of public housing dwellings are underutilised. Therefore, there may be an opportunity to increase the capacity of public housing by remodelling existing stock to meet current needs. This could include supporting smaller households, and adapting to a higher number of tenants with disabilities. The contribution of this option to the need is anticipated to be ‘Moderate’ in all time periods. Metric 1: Reduction in housing stress for lower income households in the rental market This option could contribute to a reduction in housing stress if remodelling and repurposing assets expands capacity. Metric 2: Reduction in average waiting time of people on the social housing register waitlist This option could reduce waiting time if the refresh leads to the addition of an extra property (e.g. a two bedroom house is split into two by one bedroom units) where smaller groups of people on the list can benefit. Metric 3: Ability to provide homeless people a pathway into housing This option is unlikely to provide a direct pathway for homeless people into housing, except in the case where rationalisation or refresh leads to additional housing capacity.

Public housing asset rationalisation and refurbishment SHA Page 83 Supplement B – Options assessed (document 4 of 4)

Public housing asset rationalisation and refurbishment SHA Page 84 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Through renovation of the existing social housing stock, this option is anticipated to improve the quality of accommodation for existing tenants. This option is anticipated to support low socio-economic areas, where members of the community are social housing residents. The refurbishment is considered likely to have benefits for energy use through upgrades to the existing housing stock. Additionally, this option may have benefits for visual amenity.

Public housing asset rationalisation and refurbishment SHA Page 85 Supplement B – Options assessed (document 4 of 4)

Social housing stock expansion SHE

Infrastructure Victoria’s Option Description Provision of additional social housing stock that would be owned and operated by government or the community housing sector. It is proposed to deliver approximately 50,000 new public housing dwellings over the next 10 years. The dwellings would be a combination of medium density apartments and townhouses with some and stand-alone dwellings, with the majority to be studio, one and two bedroom dwellings in metropolitan Melbourne.

- Social housing is the largest single landlord holding in Victoria with 64,811 dwellings, the majority under the management of DHHS (2015). - 72.9 per cent are located in major cities, 22.1 per cent in inner regional areas and 5 per cent in outer regional. - Properties are rented at no more than 25 per cent of income on rent up to an income limit. - Tight eligibility criteria exist. Between 60,000 and 80,000 households require new targeted affordable rental housing outcomes, which could be delivered as a combination of new social housing, private rental market supply and support packages. The cost estimates provided include the capital cost estimates for developing the facilities, along with the recurrent cost to manage the assets. The recurrent cost to provide the service is excluded from the Direct Option Cost. Sector Certainty of evidence Health and human services Medium Option type Evidence base New or expanded assets Affordable Development Outcomes, Draft Report to Infrastructure Victoria – Improving Access to Location and spatial context Affordable Housing (2016) Australian Housing and Urban Research Institute, Housing supply bonds – a suitable instrument to This option does not specifically target regions or locations for additional social housing. channel investment towards affordable housing in Australia (2012) Risks and Opportunities Council to homeless persons, Making social This option may provide little incentive to encourage housing work – better homes for low income people to enter the private rental market even if Victorians (2014) they have financial and other support to be able to Department for Family and Community Services do so. (NSW), Future directions for social housing in NSW New social housing could be constructed to match forecast future demographic changes of social housing tenants. This could include housing to accommodate emerging needs from an aging population, better support tenants with disabilities, and smaller households.

Social housing stock expansion SHE Page 86 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the existing and forecast future demand for affordable 30 year study period of this option is: housing for vulnerable households. Vulnerable households have been identified "defined as >$10 billion earning less than 80 per cent median household Capital / implementation cost income and low-income households with the greatest levels of diminished capacity who are >$10 billion (~$10 - $15 billion) otherwise at risk, or require support in order to reduce their level of vulnerability" (Affordable Annual recurrent costs Development Outcomes (2016)). $250 million - $500 million This option would expand the supply of social housing to ensure an adequate supply of affordable Option lead time housing is available for vulnerable Victorians. When could it be required? If this option was committed to today, it could be implemented in: Victoria may need this option to be implemented in: 5 – 10 years 0 – 5 years (2016 – 2021) Operational life What is the risk of deferring this The expected operational life of this option (from option? opening) is: Existing identified excess demand would continue, 25 – 50 years the wait list for social housing could increase, the incidence of housing stress could increase. This Cost certainty can negatively affect stability and security of housing for people which can have flow on effects The certainty of costing evidence is rated: to educational and employment outcomes for Low children and adults. Additionally, development of sense of community for vulnerable people can be In 2010, it was considered likely that new social inhibited by unstable housing arrangements. housing dwellings could be constructed for However, if this option was deferred in favour of approximately $260,000, based on investment from demand interventions in housing affordability, such the State Government and charitable organisations as rental assistance programs or more structural of $400 million to expand supply by 1,550 dwellings reforms, the negative effects of deferral may be (VAGO 2012). This report also described planning partially mitigated. to separately develop 800 new dwellings for a projected capital cost of $200 million, indicating a The risk to the State if this option is deferred is: cost per dwelling of approximately $250,000 (VAGO High 2012). Taking the higher estimate, and adjusting the costs for cost inflation in the housing sector in Melbourne (ABS 2016), it is assumed that a dwelling could be constructed for approximately $290,000 in 2016. Recurrent costs have been assessed at three percent of capital cost, and this includes maintenance and repair to dwellings as needed. Costing source Australian Bureau of Statistics (ABS), Catalogue 6427 6427.0 – Producer Price Indexes (2016) Victorian Auditor-General’s Office (VAGO), Access to Public Housing (2012)

Social housing stock expansion SHE Page 87 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 7: Provide better access to housing for the most vulnerable Victorians This option directly aims to increase supply of social (public) housing, which would then be available for the most vulnerable people. Affordable Development Outcomes has identified a need for targeted affordable rental housing outcomes corresponding to 70,000 to 100,000 dwellings ((Affordable Development Outcomes 2016). This option makes a significant contribution to this need through delivering 50,000 new social housing dwellings, expanding the supply significantly from the existing 64,811 dwellings (Affordable Development Outcomes 2016) in the current public housing system. This option is assessed as making a ‘Significant’ contribution to Need 7. The benefits of additional social housing would be realised when the housing units are available for tenancy, given the existing waitlist for spaces, and so are expected to build over the 30 year period. Metric 1: Reduction in housing stress for lower income households in the rental market This option may allow eligible low income households in the private rental market to transition to social housing. Metric 2: Reduction in average waiting time of people on the social housing register waitlist Increasing supply of social housing is likely to directly reduce wait times. This option is for a capacity expansion of 50,000 dwellings, a substantial increase on the 64,811 dwellings (Affordable Development Outcomes (2016)) in the current public housing system. Metric 3: Ability to provide homeless people a pathway into housing By creating additional capacity in social housing, this option may support the transition of homeless Victorians into social housing.

Social housing stock expansion SHE Page 88 Supplement B – Options assessed (document 4 of 4)

Social housing stock expansion SHE Page 89 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to have social benefits by providing increased availability of social housing for vulnerable Victorians. Increasing capacity of affordable housing in the housing market is anticipated to benefit housing supply and affordability, as well as low socio-economic communities. Greater access to social housing could provide stability and security of tenure which in turn could improve safety and community participation outcomes for those benefiting (between 50,000 and 120,000 households), as well as proximity and thus accessibility to services such as health and education. Greater stability and security of tenure for vulnerable Victorians is also anticipated to result in avoided costs to the State and Federal Governments by reducing demand on health and justice services as households are supported to maintain connections with education and the workforce.

Social housing stock expansion SHE Page 90 Supplement B – Options assessed (document 4 of 4)

Affordable housing sector planning system amendment SHS1

Infrastructure Victoria’s Option Description Amend the planning system to provide an alternative statutory approval process for affordable housing developments to facilitate growth in supply by ensuring projects are not subject to lengthy approvals process, but local community issues are still incorporated in the decision making process. This alternative approach would expedite the approvals process by centralising the decision making authority and removing third party notification and appeal rights. As the state government would take on a greater role in the local government planning process under this option, a partnership approach would be required to balance the impact of statewide decisions on the local community. The revision of the planning system could be introduced for a fixed or unlimited timeframe, however the timeframe needs to be of a significant duration to give certainty to developments. Victoria’s current planning system contains only relatively broad objectives and strategies relating to affordable housing supply via the State Planning Policy Framework (SPPF), and no specific tools exist to achieve these. This approach is put forward in the Plan Melbourne Refresh Discussion Paper and was implemented on a short term basis for Social Housing from May 2009 until June 2012, to support the delivery of the Commonwealth Government’s Social Housing Initiative. This option would utilise the Victoria Planning Provisions to provide public, community and private affordable housing in strategic urban renewal precincts and other significant change areas. This would be achieved through:

- Amendment of the Victoria Planning Provisions to include a definition of “affordable housing”. - Develop the alternative statutory approvals process addressing the conflicting issue of fast-tracking and community consultation and appeal rights. Two examples of models that could be considered are the ‘Fast Track Government Land Service ‘ model and the approach taken during the delivery of NRAS housing - Identification of opportunities and targets for the inclusion of affordable housing prior to the commencement of formal structure planning and proposed rezoning of land. Sector This option could support improved social mix in developments by creating incentives for developers Health and human services to include affordable housing in their developments Option type The effectiveness of this option could be enhanced by the development of a target for the number of Changing behaviour dwellings to be delivered (Australian Housing and Location and spatial context Urban Research Institute 2012). Statewide Certainty of evidence This option could support the development of Medium affordable housing Statewide Evidence base Risks and Opportunities Australian Government, National Rental The option may deliver an uneven distribution of Affordability Scheme (website, accessed July 2016) affordable housing, as the option may be less Australian Housing and Urban Research Institute, effective in creating capacity in areas with high Affordable housing, urban renewal and planning: value land than areas with low land value. It is emerging practice in Queensland, South Australia expected in areas of high land value developers will and New South Wales (2012) be more prepared to trade off longer development approval times for the likely higher returns from Council on Federal Financial Relations, Affordable providing housing in keeping with the established housing working group: innovative financing market in the area, rather than affordable housing. models, Issues Paper (2016)

Affordable housing sector planning system amendment SHS1 Page 91 Supplement B – Options assessed (document 4 of 4)

Department of Environment, Land, Water and The VCAT annual report indicates that VCAT Planning, Fast Track Government Land Service spends $18.23 million in 2014-15 for wages, (website, accessed July 2016, 2016a) accommodation and depreciation. Department of Environment, Land, Water and It is assumed that three members are required for Planning, Plan Melbourne Refresh (2016b) the alternative body, supported by a staff of four people (part and full time). Taking a share of SGS Economics and Planning, Revisiting the VCAT’s annual operating expenditure, this is economics of inclusionary zoning (2015) assumed to result in a recurrent cost of Department of Human Services, National Rental approximately $500,000 – $700,000 per annum to Affordability Scheme (website, accessed July 2016) operate. Direct option cost Costing source The capital or implementation cost of the option, Stakeholder consultation plus the annual recurrent costs incurred within the Victorian Civil and Administrative Tribunal (VCAT), 30 year study period of this option is: VCAT Annual Report 2014-15 (2015) $1 million – $10 million What could influence this option? Capital / implementation cost The need for this option could be influenced by the $1 million – $10 million intention to increase the supply of affordable housing. Annual recurrent costs In response this option would increase the supply of affordable housing. <$1 million When could it be required? Option lead time Victoria may need this option to be implemented in: If this option was committed to today, it could be 0 – 5 years (2016 – 2021) implemented in: <1 year What is the risk of deferring this option? Operational life Then it is likely that the available supply of The expected operational life of this option (from affordable housing would be lower and/or opening) is: developed in areas with lower land values. 5 – 10 years The risk to the State if this option is deferred is: Cost certainty Low The certainty of costing evidence is rated: Low This option would include the need to develop an operating model for an alternative statutory approvals process for affordable housing, in addition to drafting and implementing changes to the Victorian Planning Provisions (VPPs). This option is considered to be a very large size policy development that, from the State Government and potential in association with external consultants, would involve preparation of policy and associated documentation, public and key stakeholder consultation, review and response to public submissions, and preparation of final policy documentation. As participation in the affordable housing sector would remain voluntary, it is assumed the private sector will bear any increased and/or decreased profit margins.

Affordable housing sector planning system amendment SHS1 Page 92 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 7: Provide better access to housing for the most vulnerable Victorians Affordable housing is understood to “reduce or eliminate housing stress for low-income and disadvantaged families and individuals” (Council on Federal Financial Relations 2016). This includes crisis, temporary and social housing, as well as low cost privately provided housing. This option would enable the development of more affordable housing by establishing an alternate assessment process for affordable housing proposals. A faster and/or more favourable approvals process is considered likely to incentivise developers to include affordable housing in their plans. In some areas it is likely however that additional incentives may be required to expand the supply of affordable housing.. For example, the Australian Housing and Urban Research Institute found that “planning mechanisms alone (either mandatory or voluntary) are generally insufficient to secure a significant supply of affordable housing in high value urban renewal or infill contexts without additional resources in the form of land dedication or government funding (Australian Housing and Urban Research Institute 2012). This option could provide a ‘Moderate’ contribution to the need through incentivising additional development of low cost privately provided housing. As a planning/regulatory change, the impact of this option is expected to build over time as the new processes are established and the private sector responds. The contribution of this option is anticipated to increase with time as more affordable housing is supplied. Metric 1: Reduction in housing stress for lower income households in the rental market This option is designed to increase the supply of affordable housing for low income households, which is likely to contribute to reducing housing stress. Metric 2: Reduction in average waiting time of people on the social housing register waitlist This option is not expected to directly impact on this metric. The option may have indirect benefit by reducing pressure on other types of affordable housing. Metric 3: Ability to provide homeless people a pathway into housing This option is not expected to directly impact on this metric. The option may have indirect benefit by reducing housing cost pressure on low income earners

Affordable housing sector planning system amendment SHS1 Page 93 Supplement B – Options assessed (document 4 of 4)

Affordable housing sector planning system amendment SHS1 Page 94 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to create incentives for the supply of affordable housing through developing a dedicated approvals process. This is anticipated to benefit housing supply and affordability. As the inclusion of affordable housing in development schemes under this option would remain voluntary, it is assumed that the same number of dwellings are produced, with a greater share of dwellings designed for “affordable” markets than would otherwise be the case, due to the approval incentive. This is expected to support low socio-economic communities as these Victorians may face greater risk of housing related stress.

Affordable housing sector planning system amendment SHS1 Page 95 Supplement B – Options assessed (document 4 of 4)

Integrated government service and infrastructure planning SIP

Infrastructure Victoria’s Option Description This option would formalise and simplify a whole of government infrastructure and service planning process that would facilitate investment prioritisation at a spatial level, this could be regionally, sub-regionally or across multiple Local Government Areas. Integrated across government service and infrastructure planning processes are potentially a very useful forum for the State Government to collaborate across portfolios with local governments and potentially the commonwealth government to integrate infrastructure planning and prioritisation. Discussions that occur across Government and at a spatial level can yield innovative approaches to better utilisation of existing infrastructure and a more collaborative approach to larger scale future planning. This is a governance reform option that requires an authorised, resourced and accountable lead agency to coordinate three levels of government to jointly plan for infrastructure to develop short, medium and long term infrastructure for priority areas. The priorities would require an evidence base and clear lines of reporting. The priorities would be based on shared principles for managing growth, or even decline, and would require sharing evidence and service plans within and across government. This process is separate from the Victorian Government's recently announced Regional Partnerships. While these partnerships will facilitate stronger engagement with community and business to identify local priorities, it’s also important that Government has improved capacity to service plan together. Sometimes this planning will involve confidential information, such as plans for new infrastructure that may for example have an impact on land values. There are a number of probity reasons for why this information should not be made available to community in early stages of government infrastructure planning. This option could enable joint infrastructure and service planning: - For a sector need (e.g. for health, housing or transport planning) - To coordinate planning for growth (e.g. planning for rapid growth in greenfield or established areas) - Planning for areas experiencing population decline. - To respond to identified local priorities, such as priorities as those identified through Regional Partnerships Sector use. Others entail major opportunities for health, education and social infrastructure planning to be All streamlined and consistent across metropolitan Melbourne and potentially all of Victoria. Option type Certainty of evidence Better use Low Location and spatial context Evidence base Statewide Department of Transport, Planning and Local This option could be implemented statewide. Infrastructure, Plan Melbourne (2014) Risks and Opportunities A delivery risk may be that key stakeholders could be reticent to share service planning data. The success of this option will also depend on its organisational design and the receptiveness of leaders at all levels of government to the planning structure. Opportunities include improved efficiencies in delivering infrastructure planning and better land Integrated government service and infrastructure planning SIP Page 96 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the shift towards coordinating agencies in delivering 30 year study period of this option is: plans and projects. $25 million – $50 million In response this option would by streamlining planning and delivery of infrastructure across Capital / implementation cost different tiers of government, and reduce duplication <$1 million of efforts. When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $1 million – $10 million 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be option? implemented in: If this option were deferred, alternatives ways of <1 year managing and delivering infrastructure are likely to be explored. Operational life The risk to the State if this option is deferred is: The expected operational life of this option (from Medium opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low This option is not assumed to require the creation of a new government agency, or development of policy documentation. As such, no capital costs have been included in this option. Subregional planning groups would need to be rolled out across Victoria, with input from key departments. Recurrent costs assume 4-6 additional level 6 VPS staff would be employed to run the groups, with up to 6-8 level 7 VPS designates acting as department liaisons across government. Costing source Community and Public Sector Union, VPS Wage Rates (2016)

Integrated government service and infrastructure planning SIP Page 97 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth This option is intended is allow for more efficient and coordinated planning, and can be seen as an extension of the approach taken with Plan Melbourne and the establishment of the Metropolitan Planning Authority. The coordination discussed in the option is relevant to areas of high population growth and greenfield development where significant new infrastructure is needed. The opportunities to stage and align investment are high. For other growth areas, such as the City of Melbourne, the form of new infrastructure needs to respond to existing land use, service delivery and infrastructure. Potential for staging may be limited. This may reduce the ability of such a body to implement an overarching plan. As a planning option, the contribution against the need is anticipated to be small initially, and increase over time as more development occurs under the planning regime. This option receives a 'Very low' contribution rating in years 0-5, while subregional infrastructure and service planning is in its infancy. The contribution rating increases to 'Low' in years 5-10 and again to 'Moderate' in years 10-15 as the cumulative benefits of subregional planning are accrued relative to the existing planning framework. This option receives a 'Significant' contribution rating against Need 1 in years 15-30, as subregional planning is anticipated to benefit high growth areas in particular. Metric 1: Address infrastructure demands in areas with high population growth Better planning structure may have a high contribution against this metric, although there is the risk that more protracted processes could lengthen the time taken to build new infrastructure.

Need 2: Address infrastructure challenges in areas with low or negative growth As population’s decline, infrastructure challenges are more likely to relate to making sure existing infrastructure supports communities in an efficient way, rather than providing new infrastructure. Meeting the needs of areas with low or negative growth is likely to require flexibility and innovation in service provision to cater to changing local needs. There is likely to be less of a role for coordinating and centralising planning between three levels of government. The option is assumed not to include coordination of service delivery, for example, of education services. Subregional infrastructure planning is anticipated to provide substantial benefits to low or negative growth areas, over and above the current planning framework. This option receives a 'Very low' contribution rating against Need 2 in years 0-10, which increases to 'Low' from year 10 on. Metric 1: Ability to optimise infrastructure delivery while maintaining or improving service delivery within low growth areas The challenges of planning for optimisation of services to low growth LGAs are unlikely to be solved purely by infrastructure, so this option has a low contribution to the metric.

Need 4: Enable physical activity and participation As many of these activity inducing options may be smaller-scale interventions, the overall contribution towards the need is deemed to be low. There may however be some benefits for infrastructure which crosses multiple LGAs (such as bike paths) due to better coordination. This option receives a 'Very low' contribution rating against Need 4 in years 0-5, which increases to 'Low' from year 5 on. Metric 1: Increase in access to infrastructure to encourage physical activity There is potential for this option to increase the efficiency in which infrastructure which promotes activity is provided, however it is assumed this will not be as beneficial as options which directly address this. Metric 2: Increase in physical activity rates If activity inducing infrastructure is provided more efficiently, this may increase the participation rate. However, the net benefit from this option is assumed to be measured by the number of community facilities above which would be provided without this governance system which is assumed to be minimal.

Integrated government service and infrastructure planning SIP Page 98 Supplement B – Options assessed (document 4 of 4)

Need 11: Improve access to middle and outer metropolitan major employment centres The option is for changes to planning, which in the short term will have a very low contribution to improving access. Over the long term, the contribution of the option the need is anticipated to deepen as the changes to planning influence project selection, development and benefit capture. It is assumed in assessing the contribution that coordinating body or the three levels of government lead policy development that priorities access to middle and out metropolitan employment centres. This option receives a 'Very low' contribution rating against Need 11 in years 0-5, which increases to 'Low' in years 5-10, and again to 'Moderate' from year 10 on. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres By focusing on planning, this option may influence demand, but is more likely to influence supply. For example, this option could contribute to planning for changes to transport services or the long term development of employment centres. Better coordination between the three levels of government for long term projects could result in better transport infrastructure and higher benefit realisation from transport projects. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres Better coordination of the three levels of government, over time, may contribute to improved transport performance by improving the process of project selection, implementation and benefits management.

Need 12: Improve access to jobs and services for people in regional and rural areas The planning structure in this option could contribute, through better alignment of government investment, to improved economic activity and therefore better access to jobs. The option is assumed to be limited in scope to infrastructure and land use planning. Coordination between the three levels of government for policy and service delivery, in for example, health, is outside the scope of the option. This option receives a 'Very low' contribution rating against Need 12 in years 0-5, which increases to 'Low' in years 5-10, and again to 'Moderate' from year 10 on. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas Investment in large scale projects to accommodate journeys from major employment centres and rural and regional centres, such as major highways or the regional rail network, is often led by State and Federal Government. This option, and the potential to align local government with the other two levels of government, may increase benefit realisation. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas Better coordination of the three levels of government, over time, may contribute to improved transport performance by improving the process of project selection, implementation and benefits management. Metric 3: Improvements in ICT connectivity in rural and regional areas Better coordination of the three levels of government, over time, may contribute to improved ICT connectivity in rural and regional Victoria by improving the process of project selection, implementation and benefits management.

Integrated government service and infrastructure planning SIP Page 99 Supplement B – Options assessed (document 4 of 4)

Integrated government service and infrastructure planning SIP Page 100 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary The coordination may help projects realise their benefits, as multiple levels of government work together to achieve agreed outcomes. This could enhance social and environmental aims of other options. As this option would work through improving the effectiveness of other projects, the direct impacts of the option on different criteria is hard to quantify Better realisation of project benefits, and coordination of funding from multiple sources, may result in avoided costs for the State Government. As the option is for planning only, not the delivery of infrastructure, other economic benefits have not been assumed

Integrated government service and infrastructure planning SIP Page 101 Supplement B – Options assessed (document 4 of 4)

SmartBus network extensions and service increases SNE

Infrastructure Victoria’s Option Description Expand the existing SmartBus (Premium) network to connect employment centres with more residential catchments with a higher frequency public transport network. It will focus on increasing the percentage of Melbourne residents who can access non-central employment centres within 30 minutes. In addition to more SmartBus routes, existing services will be enhanced by improving the frequency and efficiency of the bus network and increasing peak hour priority. This option expands the existing SmartBus orbital network, with additional routes covering the inner and western suburbs and connections to Melbourne Airport. Providing additional SmartBus services will increase bus mode- share, potentially reduce congestion on key arterial roads/freeways as people shift from car to public transport and increase access to non-central city employment centres. Providing additional public transport bus services to the airport is likely to increase bus mode-share and improve access. Extensions of SmartBus services should be prioritised on high-patronage local bus routes or routes in close proximity to major transfer points and activity centres. This option may also entail the reorganisation of some SmartBus routes to better connect with activity centres rather than providing a theoretical one-seat ride around the perimeter of the region. Route additions and alterations that could support these goals include:

- Extend routes 905, 906, 907 and 908 into the Docklands to serve emerging high-intensity employment and population clusters - Splitting orbital bus 903 into two separate routes (one from Altona and one from Mordialloc) both terminating at Melbourne Airport - Upgrade peripheral routes 513 and 828 to SmartBus standards - Add route 246 as the first SmartBus-quality ‘inner orbital’ - Upgrade routes 216 and 220 into radial SmartBus routes. Sector Certainty of evidence Transport Low Option type Evidence base New or expanded assets Public Transport Victoria (PTV), 'SmartBus' (website, accessed 2016) Location and spatial context Public Transport Victoria (PTV), Bus Patronage and Origin Destination Summary 2008-09 to 2011-12 (2013) This option would affect the outer metropolitan areas of Melbourne, especially in the north and Department of Environment, Land, Water & west. Planning (DELWP), Victoria in Future 2015 and Victorian Government unpublished population Risks and Opportunities projections (2015) Removing one-seat rides by splitting the larger KMPG, Arup & Jacobs, Transport modelling for orbital routes may not be popular with some people. Infrastructure Victoria (2016) There may also be a risk in choosing where the new routes will go, as a benefits from this option will be higher if routes are well designed. Expanding this high-quality bus service would encourage multimodal public transport travel.

SmartBus network extensions and service increases SNE Page 102 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the population growth in outer suburbs, requiring high 30 year study period of this option is: quality public transport services and connections to the heavy rail network. $750 million – $1 billion In response this option would increase the supply of Capital / implementation cost the public transport network, and promote $250 million – $500 million multimodal journeys. When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $10 million – $25 million 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be option? implemented in: If this option were deferred car dependency in the 1 – 5 years outer suburbs would continue. Operational life The risk to the State if this option is deferred is: Low The expected operational life of this option (from opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low The capital cost assumes 30 new routes will be applied, with each route requiring additional busses to operate at a cost of $200,000 per bus. In addition to the bus fleet purchase, infrastructure works are assumed to total $300 million. The annual recurrent cost provided assumes 100 new buses operate 7 days a week for 48 weeks of the year (the additional four weeks are provided for servicing). Fuel consumption is assumed to be 120 litres per day per bus (three kilometres per litre) and fuel cost is assumed to be $1.25 a litre. Driver, management, administrative wages, stabling and maintenance facilities are assumed to total $10 million. Costing source Newman, Doncaster Rail: What are its prospects? (2012) Stakeholder consultation

SmartBus network extensions and service increases SNE Page 103 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth Presently of the top five highest population growth areas in Victoria over the next 30 years, only one is serviced by a SmartBus (the 901 provides services through Epping, although does not service the adjacent high-growth areas to the north). Expansion of the SmartBus presents a large opportunity for the expansion of services to reach these areas which will need a high quality public transport connection in the near-and-mid-term. This option is expected to have a ‘Significant’ contribution to Need 1, increasing from ‘Moderate’ after five years due to forecast future population growth, which is expected to increase demand for services. Metric 1: Ability to improve access to services or increase service capacity for high growth areas Providing a SmartBus service to high growth areas will increase the supply of high quality public transport to these areas.

Need 11: Improve access to middle and outer metropolitan major employment centres SmartBuses provide a vital service of orbital transport connections, connecting the radial heavy rail lines with both activity and employment centres. For this reason, SmartBuses are more useful for local trips (within the same metropolitan region) than the heavy rail network which is more conducive to city bound trips. This option is expected to make a ‘Moderate’ contribution to Need 11 in all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres This option will increase the supply of public transport to middle and outer ring suburbs. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres As SmartBus are generally designed to connect employment centres to the heavy rail network, this option would increase access to those currently not connected (such as the future East Werribee employment centre).

SmartBus network extensions and service increases SNE Page 104 Supplement B – Options assessed

SmartBus network extensions and service increases SNE Page 105 Supplement B – Options assessed

Economic, social and environmental assessment summary This option proposed a substantial expansion to the smart bus network, designed to improve access to non-CBD employment centres, which is expected, due to the design of the option, to improve access to jobs. Additional benefits of access to social infrastructure are also expected. This option is expected to improve the resilience of the transport network through service expansion. This option is anticipated to encourage mode share shift to public transport. Buses are more environmentally friendly mode of transport than cars, and so this option is anticipated to benefit resource use, greenhouse gas emissions and air pollution.

SmartBus network extensions and service increases SNE Page 106 Supplement B – Options assessed

School demand management SOO

Infrastructure Victoria’s Option Description This option proposes to review and improve the tools available to manage localised variation in demand for school placement. This could include improving perceptions of the less desirable schools through better information, and/or targeted funding to address the causal factors behind some schools receiving less demand. This would improve the ability of the network to meet demand by relieving pressure on some schools and increasing the use of underutilised resources and excess space at others. Mechanisms for a network of schools to work together to lift the performance of the entire network could also be explored, such as a hub and spoke approach, with a high performing lead school assisting other schools. This would help to address why sometimes one school within a network may be perceived as more desirable and attract more enrolments, leaving adjacent schools with spare capacity and would also support sharing of school facilities, resources and even teachers. Sector Certainty of evidence Education and training Medium Option type Evidence base Changing behaviour/Better use Deloitte and Aurecon, Infrastructure Capability Assessment Education, advice to Infrastructure Location and spatial context Victoria (2016) Statewide Grattan Institute, Schools crisis comes with massive This option could be applied Statewide waste of tax dollars (2016) Risks and Opportunities A risk is that this program may not be communicated as well as possible to potential students and parents. An opportunity is that less popular schools may be supported to become more attractive.

School demand management SOO Page 107 Supplement B – Options assessed

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by a plus the annual recurrent costs incurred within the decision to address the pressure placed on popular 30 year study period of this option is: schools and the underutilisation of schools with fewer enrolments. <$1 million In response this option would assist to reduce the Capital / implementation cost imbalances in enrolments between schools. Some <$1 million students may be more able to attend their local school, while less popular schools might be more able to attract students. Annual recurrent costs When could it be required? <$1 million Victoria may need this option to be implemented in: Option lead time 0 – 5 years (2016 – 2021) If this option was committed to today, it could be What is the risk of deferring this implemented in: option? <1 year If this option were deferred some schools would Operational life remain underutilised and less desirable and other schools would continue to operate over capacity. The expected operational life of this option (from opening) is: The risk to the State if this option is deferred is: 5 – 10 years Low Cost certainty The certainty of costing evidence is rated: Low Ongoing costs to the State Government are expected to be absorbed within existing budgets. Costing source Stakeholder consultation

School demand management SOO Page 108 Supplement B – Options assessed

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth This option considers a number of alternative actions to address demand for school infrastructure in high population growth areas. The impacts of this option will most likely be felt most keenly within high population growth areas in metropolitan locations. As this option will not explicitly increase system capacity, it is unlikely to have a substantial impact on overall access for education services within high population growth areas, especially where demand exceeds supply. As a result, this option receives a 'Low' contribution rating to Need 1. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option may improve access to infrastructure for students in high growth areas, who are currently unable to attend their local school due to demand from neighbouring suburbs. This is a significant issue within inner Melbourne suburbs, where there is particular demand placed on more desirable schools. In some cases, higher income families may not be prepared to send children to schools that are perceived to be servicing disadvantaged families.

Need 9: Provide access to high-quality education infrastructure to support lifelong learning Many existing public schools are overcrowded. It is also likely that a number of new schools will be required to meet demand from population growth (Grattan 2016). Given these trends, and the high costs of maintaining underutilised government schools, this option proposed measures to more evenly spread demand for schools. This option could also support increased access to high-quality education through funding support for schools to improve performance, and so make them more attractive to parents. The effort required to improve school performance and reputation may be substantial, and may need to be supported into the medium term (>10 years). The Grattan Institute studied a number of so-called “turnaround” schools, and argued that five steps are: school leadership, teaching practices, measuring student learning and innovating with teaching, school culture and community support (Grattan 2014). There have been examples in Melbourne of schools closing and re-branding to attract more students, such as Albert Park College or Auburn High. In these instances, higher demand for enrolments and improved student outcomes have resulted. These have often involved substantial cultural change accompanied by new staff, and in some cases, large scale investment in school facilities. This option has been assessed as having a ‘Moderate’ overall contribution rating in all time periods. Metric 1: Increase in overall education asset utilisation This option directly targets this outcome using a range of tools. Metric 2: Increase in education participation This option may have a limited impact on participation, as this option affects primary and high schools, and the current school leaving age is 17.

School demand management SOO Page 109 Supplement B – Options assessed (document 4 of 4)

School demand management SOO Page 110 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary If this option is mainly implemented through improving less attractive schools that are underutilised, there may be marginal increase to access to education and supporting low-socioeconomic areas, with Government potentially saving money on not needing to build new schools. If students go to school closer to where they live, there is increased opportunity for environmental benefits (although again not significant enough to register).

School demand management SOO Page 111 Supplement B – Options assessed (document 4 of 4)

Sport and recreational facility strategic investment SRF

Infrastructure Victoria’s Option Description As sport and recreation infrastructure around the state comes to the end of its useful life and areas of population growth continue, investment is required to:

- upgrade and increase the capacity of existing sport and recreation facilities through the application of a number of different approaches (including for example, better use of technology, synthetic surfaces etc. to enable more intensive and longer use); and - maintain and renew existing sport and recreation facilities to reflect the needs of a diverse community and support increased participation - deliver new sporting and recreation infrastructure, including for high-performance. The government currently contributes funding towards community sport and recreational facilities though a Community Sports Infrastructure Fund (around $35 million in 2016-2017). This program allocates grants to local communities across a number of categories including pools but also to undertake the planning in the first instance, in addition to the Community Sports Infrastructure Fund. This option would require government to take a view across local government areas informed by the best quality data reflecting key trends in participation to establish the priorities for refocussing this investment across local government areas. Sector Certainty of evidence Cultural, civic, sporting, recreation and tourism Medium Option type Evidence base Better use/New or expanded assets Inside Edge, Melbourne East Sport and Recreation Strategy (2016) Location and spatial context SGS Economics and Planning, Community Sport Statewide and Recreation Futures Paper 2014-2024 (2014) This option affects Victoria statewide on a regional Victorian Auditor General, Local Government basis. Service Delivery: Recreational Facilities (2016) Risks and Opportunities Performance of the option will depend on organisational design and receptiveness of stakeholders to the governance structure. Improved efficiencies in delivering sport and recreation infrastructure, for example, reducing the likelihood of oversupply of one infrastructure type due to the current grant program approach.

Sport and recreational facility strategic investment SRF Page 112 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, This option would be influenced by demand for local plus the annual recurrent costs incurred within the sport and recreational facilities, including where 30 year study period of this option is: facilities are not fit for purpose. $500 million – $750 million In response this option would provide a strategic framework to consider, at a subregional level, the Capital / implementation cost need for maintenance, greater capacity in existing $250 million – $500 million facilities or new investment. When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $10 million – $25 million 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be option? implemented in: If this option were deferred, then adaption, 10 – 15 years upgrades and investment in new sport and recreational infrastructure could occur in a less Operational life coordinated fashion. The expected operational life of this option (from The risk to the State if this option is deferred is: opening) is: Low 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low Costing of this option is based on the Community Sports Infrastructure Fund, which started in 2015 and will provide around $35 million per year to improve community sports facilities. It has been assumed that this expansion includes a capital budget of approximately $370 million over a 10 to 25 year period to allow for investment in six metropolitan regions and seven regional areas. Additional funding of $25 million is assumed to be needed to support Sport and Recreation Victoria to develop appropriate governance frameworks, planning and money for data collection and analysis. Recurrent costs assumes annual maintenance and upkeep equivalent to three percent of capital cost, which would address the need for maintenance and upkeep. Costing source Department of Health and Human Services website, Apply now for 2015-18 round of the $100m Community Sports Infrastructure Fund (2016) Community Sports Infrastructure Fund – State Government of Victoria (2015)

Sport and recreational facility strategic investment SRF Page 113 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth There will be an additional demand for community sport and recreation facilities of between 23 percent – 28 percent depending on facility type by 2024 (SGS Economics and Planning 2014). Areas with high population growth, especially those in Melbourne’s growth areas, are anticipated to create the highest additional demand for additional sport and recreation facilities. The Auditor General has noted that there is limited strategic planning at the regional level for recreational infrastructure provision (VAGO 2016). Currently there is little coordination of future development to ensure that scarce resources are allocated efficiently, this is particularly important in the rate capping environment. The Auditor General has recommended the Sport and Recreation Victoria should assist Councils to improve regional strategic planning to achieve this goal (VAGO 2016). The Eastern Group of Councils have been working together to look at infrastructure provision from a regional perspective creating The Melbourne East Sport and Recreation Strategy (Inside Edge 2016). This strategy provides a regional planning and development framework to identify the key stages and criteria for assessing infrastructure projects and their suitability as regional facilities. An effective framework needs to be developed to implement the planning and provision of facilities from a regional perspective. This framework will:

 Identify priorities within the region for sport and recreation facilities  Enable collaboration and strategic partnerships between stakeholders on regional projects  Provide a formal governance and leadership structure to facilitate effective implementation of the framework and deliver infrastructure priorities from a regional perspective. This option is likely to address infrastructure demands in areas with high population growth by clearly identifying existing and future infrastructure gaps on a regional level. Taking a regional approach to infrastructure provision will ensure that scarce resources are allocated more efficiency to reduce infrastructure duplication. As infrastructure gaps are generally greater in high population growth areas, these areas are likely to be prioritised. This option receives a ‘Moderate’ rating across all time periods. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option is likely to improve access to services within high growth LGAs by prioritising sport and recreation facility investment throughout Victoria to where it is most needed. This option would prioritise the facility types most needed and prioritise the region in which they should be located or upgraded. High growth LGAs are likely to be targeted under these criteria therefore improving services in these areas.

Need 4: Enable physical activity and participation Participation rates in physical activity are linked to a number complex array of inter-related factors which fall into three broad categories, the culture and demographics of the population base, the social environment in which sport and recreation facilities operate and the physical environment in which sport and recreation facilities operate (SGS Economic and Planning 2014). Evidence suggests that investment in the right type of sport and recreation facilities in the right locations will encourage increased participation. Currently sport and recreation and recreation facilities are aging across the state while population increases are providing additional demand for facilities. The adoption of a regional approach to sport and recreation planning will allow the pooling of resources increasing the efficiency of resource allocation (VAGO 2016). Additionally there is a changing trend in the types of facilities being demanded requiring funding to be directed to certain types of facilities. This option is likely to enable physical activity and increase participation by identifying the types of sport and recreation facilities demand by location and then target infrastructure investment to best allocate scarce resources to cater to the needs of the most people. This option receives a ‘Moderate’ rating across all time periods’. Metric 1: Increase in access to infrastructure to encourage physical activity This option is likely to increase community access to infrastructure to encourage physical activity by prioritising infrastructure provision in areas which have the highest need for upgraded or new sport and recreation facilities

Sport and recreational facility strategic investment SRF Page 114 Supplement B – Options assessed (document 4 of 4)

(no facilities, wrong type of facilities or inadequate facilities). It may also prioritise the types of sport and recreation facilities that are most in demand, catering for the greatest number of people. Metric 2: Increase in physical participation rate Evidence suggests that provision of in demand sport and recreation facilities will increase the physical participation rate. By targeting infrastructure investment on the right type of sport and recreation facilities in the right locations, it is anticipated that the physical participation rate will increase.

Sport and recreational facility strategic investment SRF Page 115 Supplement B – Options assessed (document 4 of 4)

Sport and recreational facility strategic investment SRF Page 116 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Through investment in sporting and recreational infrastructure, this option is expected to have strong benefits for access to access to social, sporting and recreation facilities. This would support greater physical activity, and so could support better health outcomes. In addition, this option could have benefits for amenity.

Sport and recreational facility strategic investment SRF Page 117 Supplement B – Options assessed (document 4 of 4)

Stormwater harvesting and re-use SRH

Infrastructure Victoria’s Option Description This option involves harvesting stormwater at Greenfield sites in Melbourne and regional cities for use across a range of purposes. During rainfall events a significant amount of water is currently collected in urban drainage systems and released into waterways or the ocean. This option considers harvesting of this resource for fit for purpose uses. Methods to capture and re-use stormwater range from installation of rainwater tanks at the household level to development of stormwater treatment systems that include wetlands, distribution systems and treatment technologies. This option proposes inclusion of stormwater harvesting projects in new urban developments. For stormwater to be managed effectively as a water resource, regulatory guidance, governance arrangements and long term water resource planning implications will also need to be considered. This option therefore also proposes clearer incorporation of stormwater as a water resource in planning instruments and corresponding provision of technical and public health and safety guidance for increased uptake of stormwater harvesting projects. Harvesting stormwater during wet periods for use in drier periods can reduce reliance on mains water supply, free up water in storages for other uses, assist to mitigate the impacts of droughts, improve the health of waterways by directly mitigating against the impacts of urban stormwater runoff and assist to minimise impacts of storm events on drainage infrastructure. Sector Certainty of evidence Water and waste Medium Option type Evidence base New or expanded assets Australian Academy of Technological Sciences and Engineering, Water Recycling in Australia (2004) Location and spatial context Cooperative Research Centre for Water Sensitive Statewide Cities, Kalkallo: a case study in technological This option directly affects water supply systems in innovation amidst complex regulation (2015) Melbourne and regional cities. It indirectly affects Environment and Communications References the water supply systems statewide through the Committee, Stormwater management in Australia State water grid. (2015) Risks and Opportunities Morgan, C., and May, A., Delivering integrated outcomes in partnership: An integrated water Smaller local stormwater harvesting systems can be management strategy for growth areas in Sunbury more difficult to manage and they can pose a (n.d.) greater risk of system failure and public health risk. Prime Minister’s Science Engineering and Smaller local stormwater harvesting can however Innovation Council Working Group (PMSEIC), increase local resilience to climate change. Water for Our Cities: building resilience in a climate Stormwater harvesting systems have the additional of uncertainty (2007) benefit of being low cost technologies. Yarra Valley Water, Kalkallo Stormwater Harvesting (website accessed July 2016) University of Melbourne, Stormwater Harvesting and the Potential for New Dams in Victoria (2016) Zinger, Y., Deletic, A., Fletcher, T.D., Breen, P., Wong, T., A Dual-mode Biofilter System: Case study in Kfar Sava, Israel, 12th International Conference on Urban Drainage, Porto Alegre/Brazil (2011)

Stormwater harvesting and re-use SRH Page 118 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the water shortages, grants, changes in regulations that 30 year study period of this option is: would facilitate the development of large-scale stormwater harvesting, as well as changed $250 million – $500 million perceptions of stormwater reuse. Capital / implementation cost In response this option would improve the use of $250 million – $500 million current water demands such as public gardens through large-scale roll out of stormwater harvesting, and thereby reducing demand on Annual recurrent costs potable water. $1 million – $10 million When could it be required? Option lead time Victoria may need this option to be implemented in: If this option was committed to today, it could be 0 – 5 years (2016 – 2021) implemented in: What is the risk of deferring this 1 – 5 years option? Operational life If this option were deferred the use of stormwater may not be achieved on a large scale, resulting in The expected operational life of this option (from ongoing environmental detriments from stormwater. opening) is: This option is expected to provide an incremental 10 – 25 years capacity expansion in water supply for rural and urban water businesses which could improve their Cost certainty resilience. The certainty of costing evidence is rated: The risk to the State if this option is deferred is: Low Low The cost of this option is based upon seven urban and rural urban water corporations in Victoria implementing one stormwater harvesting project each being equivalent in scale and capacity to that of Yarra Valley Water’s stormwater harvesting facility at Kalkallo. This facility captures and treats 365 million litres of stormwater. A total capital cost of between $20-40 million for each facility is assumed. This is based upon Kalkallo receiving a federal government grant of $9.7million which consisted of up to 50 percent of total capital cost. The annual recurrent cost estimate is calculated at $17,430 per system plus $100,000 for maintenance per system per year. Costing source Yarra Valley Water, Kalkallo Stormwater Harvesting (website accessed July 2016)

Stormwater harvesting and re-use SRH Page 119 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas With the exception of Perth it is estimated that less than three percent of rainwater and stormwater in Australia is used (Environment and Communications References Committee 2015). Stormwater harvesting has the ability to augment water supply by providing an alternative to potable water for non-drinking water uses. Given regulatory changes, treated stormwater has the potential to be used for potable uses in the future (University of Melbourne 2016). The benefits of stormwater harvesting are greatest when it is harvested and used close to the source. This is due to the cost of transporting stormwater, the environmental benefits of preventing stormwater entering rivers and streams and other benefits such as ‘urban greening’. Decentralised stormwater systems such as household rainwater tanks or localised systems such as the Kalkallo Stormwater Harvesting project provide the most promising opportunities (University of Melbourne 2016). Using Ballarat as example, during the millennial drought large amounts of water were imported from distant areas and irrigation districts. Over the drought period, in many years the amount of stormwater runoff exceeded the metered water use in the city. Better utilisation of stormwater in this instance may have increased the water security of Ballarat. This option has the potential to manage threats to water security in regional and rural areas by capturing more of the rainfall available in the local area for use. Therefore this option is rated ‘Moderate’ across all time periods. This option is rated ‘Moderate’ across all time periods. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users This option is likely to reduce the vulnerability of water supply systems to water shortages by augmenting the non-potable water supply by increasing the amount of stormwater captured. Stormwater may be used to substitute potable water, reducing demand on existing water supply. Metric 2: Increase in the efficiency of irrigation delivery systems This option is unlikely to increase the efficiency of irrigation delivery systems as storm water is unsuitable for irrigation purposes due to the generally large storage requirements for irrigation uses and seasonable mismatch between rainfall patterns and irrigation demand. Metric 3: Increase in total water available for non-urban water users This option is unlikely to increase the total water availability for non-urban uses such as irrigation. In general, such regional uses require large storages of stormwater to accommodate the seasonable mismatch between rainfall patterns and irrigation demand . Need 17: Improve the health of waterways and coastal areas Stormwater runoff, particularly from urban areas is often highly polluted and is the dominant source of degradation of Melbourne's creeks and streams. The health of creeks and streams has flow on affects for coastal sites particularly through the delivery of nitrogen and other pollutants (University of Melbourne 2016). Before urbanisation around 90 percent of rainfall would have evaporated, absorbed by trees and plants, or soaked into the ground. Due to the large proportion of impervious surfaces in urban areas around 90 percent of rainfall is now running into creeks and streams. This water is often highly polluted and causes erosion in the river (Environment and Communications References Committee 2015). As this option entails capturing, treating and controlling the release of stormwater, this option will mitigate erosion associated with highflows, and minimise nutrient loading impacts, which reduce the health of waterways. Therefore this option has the potential to significantly improve the health of waterways and coastal areas. This option will make a ‘Significant’ contribution across all time periods. Metric 1: Increase of waterways in good or excellent condition Stormwater is a major contributor to pollution in waterways, particularly in urban areas. Harvesting stormwater and using it to supplement water supply or treating it before releasing it into waterways has the potential to moderately increase the health of waterways. Metric 2: Improvements in coastal water quality Stormwater runoff from urban areas can degradate marine habitats. Harvesting stormwater and using it to supplement water supply or treating it before releasing it into waterways has the potential to significantly increase the health of coastal sites. Stormwater harvesting and re-use SRH Page 120 Supplement B – Options assessed (document 4 of 4)

Stormwater harvesting and re-use SRH Page 121 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Large-scale storage of stormwater would benefit water security during droughts moderately benefiting resiliency to water scarce events for the serviced population. Similarly, assuming seven stormwater harvesting facilities are built and operational, a moderate number of beneficiaries would benefit in terms of their water needs and security. This option is also likely to moderately benefit regional and rural areas particularly given the importance of water security to these communities and areas. Environmentally, the option would moderately improve efficiency of water use and improve ecosystems and habitats. All the above benefits have been rated as moderate given the scale of population and need that seven facilities would cater for.

Stormwater harvesting and re-use SRH Page 122 Supplement B – Options assessed (document 4 of 4)

School regional level maintenance contracts SRM1

Infrastructure Victoria’s Option Description There is a significant cost required to maintain ageing school infrastructure. This option is intended to reduce school facility maintenance costs by achieving economies of scale in the procurement of maintenance and cleaning contracts on a regional level. Schools would be encouraged to work together to find efficiencies, obtain better value contracts and to collect data so that better planning and budgeting of maintenance can be achieved in the future. Under the existing model, individual schools engage in maintenance and cleaning contracts. Economies of scale could be employed at a region level to centralise control over these costs. Procurement could be led by the Department of Education and Training, with work/contract package boundaries negotiated on a regional and local level. The delivery would also be managed and facilitated by the department. It is recommended that a pilot is run to test the model, develop standards and gain greater visibility of the cost both to maintain the portfolio of schools and to implement this model statewide. Sector Certainty of evidence Education and training Low Option type Evidence base Changing behaviour/Better use Department of Education and Training (DET), Annual Report 2014-15 (2015) Location and spatial context Victorian Auditor-General's Office (VAGO), School Statewide Buildings: Planning, Maintenance and Renewal This option could be implemented across school (2008) regions. Victorian Registration & Qualifications Authority, Guidelines to the minimum standards and other Risks and Opportunities requirements for registration of schools including If the needs of different schools in a region are too those offering senior secondary courses (2016) varied economies of scale may be difficult to realise. The framework implemented to centralise school maintenance and cleaning contracts could be potentially be adopted by other government services to achieve cost savings while maintaining service quality.

School regional level maintenance contracts SRM1 Page 123 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the government demand to implement more efficient 30 year study period of this option is: funding of school maintenance. $1 million – $10 million In response this option would trial a new procurement model school maintenance and Capital / implementation cost cleaning contracts. <$1 million When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: <$1 million 0 – 5 years (2016 – 2021) What is the risk of deferring this Option lead time option? If this option was committed to today, it could be If this option were deferred schools would continue implemented in: to maintain their own facility management contracts. <1 year The risk to the State if this option is deferred is: Operational life Low The expected operational life of this option (from opening) is: 5 – 10 years Cost certainty The certainty of costing evidence is rated: Medium To trial this option, it is likely that additional Department of Education and Training resources would be needed to develop and evaluate the trial. To implement the option at scale, regional groups of schools would need to combine to agree on the services to be provided develop procurement processes, run tenders and manage contracts. It has been assumed that as schools are already performing these functions separately existing resources could be redeployed to implement this option. The recurrent cost of managing contracts under the new procurement models is expected to be absorbed by current school budgets, with an additional FTE at the VPS level to support contract management. Costing source Stakeholder Consultation

School regional level maintenance contracts SRM1 Page 124 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 9: Provide access to high-quality education infrastructure to support lifelong learning This option is intended to reduce school facility maintenance costs by achieving economies of scale in the procurement of maintenance and cleaning contracts. In 2015, the Department of Education and Early Childhood Development spent $240 million on maintenance (DET 2015). Cost savings from regional level maintenance contracts may reduce the deficit of required maintenance work in many schools, however on an aggregate scale this is deemed to have a lower impact. This option receives a ‘Low’ contribution rating against Need 9 in each time period. Metric 1: Increase in overall education asset utilisation This option is unlikely to substantially increase overall asset utilisation. Metric 2: Increase in education participation This option is unlikely to substantially increase the proportion of the population accessing education opportunities.

School regional level maintenance contracts SRM1 Page 125 Supplement B – Options assessed (document 4 of 4)

School regional level maintenance contracts SRM1 Page 126 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option targets government cost savings and is assumed to achieve them. This option is not anticipated to have other appreciable economic, social or environmental impacts.

School regional level maintenance contracts SRM1 Page 127 Supplement B – Options assessed (document 4 of 4)

Stormwater quality management SRQ

Infrastructure Victoria’s Option Description This option is a regulatory review and guidance update to enable development of more comprehensive and targeted stormwater quality management measures. Water sensitive urban design (WSUD) principles can be better incorporated into regulatory frameworks and technical guidance on adopting these principles reviewed to reflect current research and better enable site specific implementation. Stormwater quality management measures would be applied to both existing and greenfield developments. Poor quality stormwater, including that with pollutants and sediments, can negatively impact river health and aquatic and marine ecosystems. Over time this affects biodiversity and yields from water catchments. While there have been significant developments in stormwater quality management in Victoria over recent decades, there is benefit in having a more comprehensive and consistent approach to improving stormwater quality. Regulation can for example require renewal of ageing infrastructure in line with WSUD principles. In addition to improving stormwater quality, this option will increase local resilience to storm events by reducing stormwater runoff flowrates. Sector Certainty of evidence Water and waste Medium Option type Evidence base Changing behaviour/Better use Australian Academy of Technology and Engineering (ATSE), Time to use our stormwater, says ATSE Location and spatial context (website accessed August 2016) Statewide Christopher J. Walsh, Tim D. Fletcher, Matthew J. This option affects rivers and streams Victoria wide. Burns, Urban Stormwater Runoff: A New Class of Environmental Flow Problem (2012) Risks and Opportunities City of Kingston, Integrated Water Cycle Strategy There is a risk that the full benefits of stormwater (2012) quality management infrastructure will not be Cooperative Research Centre for Water Sensitive realised without sufficient on-going maintenance. Cities, Water Sensitive Urbanism (Program B) There is an opportunity to incorporate aesthetic and (website accessed August 2016) social aspects in implementing this option and in CSIRO, Urban Stormwater: Best Practice doing so benefit both communities and the Environmental Management Guidelines (2006) environment. Department of Environment, Land, Water and Planning (DELWP), Third Index of Stream Condition report (n.d.) Department of Environment, Land, Water and Planning (DELWP), State Environment Protection Policy (Waters) Review (2015), (website accessed July 2016) Environment and Communications References Committee, Stormwater management in Australia (2015) University of Melbourne, Stormwater Harvesting and the Potential for New Dams in Victoria (2016)

Stormwater quality management SRQ Page 128 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by a plus the annual recurrent costs incurred within the demand for stormwater reuse and the need for 30 year study period of this option is: quality measures. $1 million – $10 million In response this option would reduce risk through ensuring the quality of stormwater and therefore Capital / implementation cost should contribute to the increased use of <$1 million stormwater for non-potable uses. In turn, this would lessen demand on potable uses, and similarly further ensure that potable water is being used Annual recurrent costs where it is required. <$1 million When could it be required? Option lead time Victoria may need this option to be implemented in: If this option was committed to today, it could be 0 – 5 years (2016 – 2021) implemented in: What is the risk of deferring this 1 – 5 years option? Operational life If this option were deferred the variable quality of stormwater, may discourage such a wide use of The expected operational life of this option (from stormwater, and therefore not reduce the demand opening) is: on potable water. 10 – 25 years The risk to the State if this option is deferred is: Cost certainty Low The certainty of costing evidence is rated: Low The cost is based upon regulatory review and improved integration of WSUD into appropriate frameworks. The recurrent cost is based upon resources to revise appropriate frameworks and technical guides. This is expected to be minimal and covered within existing budgets. Costing source Australian Government Department of the Environment, Australian guidelines for water recycling: managing health and environmental risk (phase 1) (2006) State Government Victoria website, Yarra & Bay: Stormwater (2016) City of Melbourne Urban Water website, Water capture and reuse (2016)

Stormwater quality management SRQ Page 129 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 16: Help preserve natural environments and minimise biodiversity loss Stormwater runoff, particularly from urban areas is often highly polluted and is the dominant source of degradation of Melbourne's creeks and streams. The health of creeks and streams has flow on affects for coastal sites particularly through the delivery of nitrogen and other pollutants (University of Melbourne 2016). Before urbanisation around 90 percent of rainfall would have evaporated, been used by trees and plants, or soaked into the ground. Due to the large proportion of impervious surfaces in urban areas around 90 percent of rainfall is now flowing into creeks and streams. This water is often highly polluted and causes erosion in the river (Environment and Communications References Committee 2015) For urbanized areas, stormwater management should seek to mimic water quality and flows of non-urbanised streams. Standards for stormwater management should require the provision of a filtration system to treat the water to a standard similar to that of an undeveloped catchment. Additionally, stormwater management systems should be required to reduce outflow to levels which mimic stream flows in undeveloped catchments, this requires harvesting some of the water and not returning it to the stream (Walsh et al. 2012). This option further improves the health of waterways and coastal areas by integrating water sensitive urban design (WSUD) principles in regulatory frameworks and guiding implementation to improve regulation, implementation and accountability. This option has the potential to ensure consistency in addressing stormwater quality across the state. This option is rated ‘Moderate’ across all time periods. Metric 1: Increase in the volume and improve the quality of Victoria’s natural habitat areas This option may increase the volume of preserved natural habitat by improving the water quality of rivers and streams and returning streamflow to natural levels. This will assist in the revegetation of natural habitat. This option may improve the quality of preserved natural habitat areas by removing pollutants which promote weed growth and kill native species. A return of streamflow’s to natural levels may reduce erosion in these areas. Metric 2: Reduction in indigenous biodiversity losses This option may reduce indigenous biodiversity losses by improving the quality of water released into rivers and streams. Poor water quality can cause excessive competition from introduced weeds.

Need 17: Improve the health of waterways and coastal areas The outflow of stormwater into Victoria’s rivers and streams from urbanised areas is resulting in a loss of biodiversity and ecological function due to poor water quality and stream flows which are not consistent with natural non-urbanised areas (Walsh et al. 2012). This option may help preserve natural environments and minimise biodiversity loss by assisting to return rivers and streams to a natural state with regards to water quantity and quality. Therefore, water quality and stream flows support preserving natural environments and minimise biodiversity loss. The full effect of the option on rivers and streams is explored further in the related discussion under Need 17. This option is rated ‘Moderate’ across all time periods. Metric 1: Increase of waterways in good or excellent condition This option may increase the percentage of Victoria’s water ways in good or excellent condition by providing better guidance for developments in urbanized areas on how to better treat and retain water flows to mimic non- urbanised stream flows and water quality. Metric 2: Improvements in coastal water quality This option may increase the number of coastal sites in good condition by improving the quality of water out flow into coastal environments from creeks and streams; therefore it would have a moderate impact.

Stormwater quality management SRQ Page 130 Supplement B – Options assessed (document 4 of 4)

Stormwater quality management SRQ Page 131 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option would moderately benefit the reduction of polluted water entering creeks and streams associated with stormwater runoff. While this option is likely to moderately benefit stormwater quality, it will not notably contribute to reducing the consumption of water. Inadvertently it may enable the broader uptake of stormwater harvesting and reuse through stronger standards and regulations relating to quality; however as this is a secondary benefit, it is not reflected in this ESE assessment.

Stormwater quality management SRQ Page 132 Supplement B – Options assessed (document 4 of 4)

Unlocking school resources with technology SRS

Infrastructure Victoria’s Option Description The days of schools focusing on “chalk and talk” are over. Technological advances support new ways of learning through; individualised instruction, collaborative group learning, project based pedagogies, collaboration for knowledge creation and delivering feedback and formative real time assessment. Use of digital technologies by students can take pressure off school assets and classroom spaces, with students able to undertake self-directed learning at home or in other learning spaces. Students can also connect, interact, share and learn with others outside of their classroom or school through virtual learning that is either synchronous (all students log in at the same time) or asynchronous (students access in their own time) giving them access to greater subject choice (e.g. Specialist Maths) and accelerated learning opportunities. This policy can be rolled out across the school network, including collaboration with Catholic and Independent schools. A strong focus would be placed on regional schools, in particular those with low enrolment numbers. Digital technologies can re-shape teaching and learning in many ways. This option focuses on the extent to which digital technology can be used to take pressure off school assets, encourage school-to-school learning and increase government and non-government sharing. A capital injection would be required to sustain and supplement existing digital infrastructure for government schools across the state under this option. This would include; access to the NBN and high speed reliable Wi-Fi within schools, access to hardware for teachers to record and present online lessons and material, video conferencing, cloud suites and online content (e.g. virtual labs) and equity funding to subsidise disadvantaged students to purchase devices. Sector This option could be prioritised to schools where there is not sufficient curriculum offer now, such as Education and training rural schools. Option type Certainty of evidence Better use Medium Location and spatial context Evidence base Statewide Department of Environment, Land, Water & Planning (DELWP), Victoria in Future 2015 and This option would most likely affect Greater Melbourne and the regional centres. Victorian Government unpublished population projections (2015) Risks and Opportunities Grattan Institute, Schools crisis comes with massive waste of tax dollars (2014) The full potential of improved ICT connectivity may not be realised if teachers are not trained in how to Johnson, L., Smith, R., Levine, A., & Haywood, K, use the equipment practically and in how to The 2010 Horizon Report: Australia–New Zealand incorporate technology into the delivery of Edition (2010) education. Greater implementation of ICT Ministerial Council on Education, Employment, technology may also require additional technical Training and Youth Affairs, National Framework for support specialists to ensure the continued viability Rural and Remote Education (2001) of technology use within the school system. Attracting and retaining suitably qualified specialists Trinitas Pty Ltd, Delivering the promise (2010) to more regional and remote communities may be Rural and Remote Education Advisory Council, difficult. Future Uses of Technology in Rural and Remote Schools Report (2014) Access and use of ICT outside the school environment may improve its effectiveness within schools. As such, greater use of ICT to promote and enable learning outside of formal school settings could complement the benefits provided by this option. Unlocking school resources with technology SRS Page 133 Supplement B – Options assessed (document 4 of 4)

Direct option cost This option is in addition to the $924 million stated in the 2016-17 State Budget to deliver upgraded The capital or implementation cost of the option, schools and new schools to address population plus the annual recurrent costs incurred within the growth. 30 year study period of this option is: Annual recurrent costs are assumed to be 20 $750 million – $1 billion percent of capital cost, reflecting the short lifespan of technology. Capital / implementation cost Costing source $100 million – $250 million Victoria State Government Department of Education Annual recurrent costs and Training, Summary Statistics for Victorian Schools (2016) $25 million – $50 million Secure Edge Networks website (2016) Option lead time Department of Treasury and Finance, Victorian Budget 2016-17 (2016) If this option was committed to today, it could be implemented in: What could influence this option? 1 – 5 years The need for this option could be influenced by a Operational life policy decision to implement ICT across all schools. The implementation of the technology would The expected operational life of this option (from optimise the performance of existing school opening) is: infrastructure, by increasing the education opportunities offered to regional and remote 10 – 25 years communities, and by assisting to reduce pressure Cost certainty on school infrastructure in metropolitan areas. A secondary trigger for this option could be sustained The certainty of costing evidence is rated: population growth which increases the demand for school places beyond their current capacity. Low In response this option would increase the supply of As of March 2016 there were 1,524 government education to regional and remote communities, and schools in Victoria that accommodated 340,844 assist to increase capacity within metropolitan primary school students over an average class size areas. of 22.3 students and 221,458 secondary school students over an average class size of 21.3 When could it be required? students. Teaching staff including principles at government schools was 41,570 at this time. This Victoria may need this option to be implemented in: means that the average school consisted 0 – 5 years (2016 – 2021) approximately 370 pupils and 30 teaching staff. It also means there were approximately 25,681 What is the risk of deferring this government school class rooms. option? - Assuming each school is upgraded to a If this option were deferred, the disparity in wireless network, and that each network is educational outcomes between rural and regional capable of handling 750 devices on the students compared to metropolitan students could network at any one point through 15 access increase. The demand for school places in points, total cost would be around $17,000 per metropolitan areas would continue to grow, and in school, or near $26 million. certain locations could lead to students travelling - Assuming each teacher receives a laptop increasing distances to access education. and/or tablet at a cost to government of $1,250 The risk to the State if this option is deferred is: per hardware package, then investment would be approximately $52 million. Medium - Assuming each class room is provided a projector and screen at an average combined cost of $2,000, then investment would be approximately $51 million. - The policy development component of this option is assumed to cost between $1-2 million.

Unlocking school resources with technology SRS Page 134 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth The Victoria in Future forecast indicates that the majority of areas with high projected population growth are located within Melbourne, though a number of more rural and regional communities, such as Ballarat, Hume and Latrobe-Gippsland are also identified as high growth (DELWP 2015). The Grattan Institute notes that Melbourne’s outer growth corridors will house more than half of all new students projected to enter the education system over the next ten years. In particular it anticipates that Wyndham, Cardinia, Melton, Whittlesea, Hume and Casey will each need at least 10 new schools within the decade to accommodate more than 10,000 new students (Grattan Institute 2014). Melbourne’s five most central local government areas are also projected to experience rapid growth. The greatest challenge in metropolitan areas is the high price and scarcity of land. Many existing schools are already overcrowded, and appropriate sites for school developments need to be included in development plans (Grattan Institute 2014). This option is likely to address infrastructure demands in regional and metropolitan areas with high population growth. It may provide improved connections to education for students in outer growth corridors, and could relieve pressure on school assets and classroom spaces considerably in more densely populated metropolitan areas. This option receives a ‘Moderate’ contribution to Need 1 in each time period. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option is anticipated to improve access to services and increase service capacity in high growth areas. It may provide improved connections to educational opportunities for students, particularly within inner city Melbourne in which current school capacity is limited and land acquisition can be difficult.

Need 2: Address infrastructure challenges in areas with low or negative growth The challenges to providing traditional education services in regional and remote areas discussed under Need 12 are exacerbated when these services are provided to low or negative growth regional communities. Population densities may be lower, or it may be more difficult to attract staff or scale services to meet community needs. This option could expand access to education services in low growth areas, as ICT could enable students to access a wider range of teachers and subjects than might otherwise be possible. These benefits are further explored under the discussion in Need 9. As for schools and students in other areas, access to ICT would need to be supported through appropriate training of supervising teachers. This option is anticipated to make a ‘Moderate’ contribution to the need. Metric 1: Ability to optimise infrastructure delivery while maintaining or improving service delivery within low growth areas This option could improve access to education services for those in low growth areas.

Need 9: Provide access to high-quality education infrastructure to support lifelong learning The use of ICT for instructional delivery, combined with face-to-face instruction, has been demonstrated to improve curriculum learning, resulting in higher test scores in some subjects compared to traditional instruction alone (Johnson et al 2010). For example, the use of ICT could allow multiple schools to access high performing teachers or additional subjects located on other campuses, especially small rural areas or low performing schools. Potentially shared teaching could occur between non -government and government schools. The major beneficiaries of this option are likely to be students within regional and remote communities. Traditional educational instruction is difficult within these areas, and the expansion of ICT infrastructure available to these students may complement existing distance education techniques, and improve access to and delivery of high-quality education (Ministerial Council on Education, Employment, Training and Youth Affairs, 2001). ICT provides an opportunity to deliver courses that cannot practicably be delivered now, to redress the lower participation and retention rates that reduce the job prospects of their young people, and to retain their best teachers (Trinitas, 2000).

Unlocking school resources with technology SRS Page 135 Supplement B – Options assessed (document 4 of 4)

This option is anticipated to provide significant benefits to students in both regional and metropolitan communities. It receives a ‘Significant’ rating in all time periods. Metric 1: Increase in overall education asset utilisation This option may increase the utilisation of distance education infrastructure by connecting regional and remote students to these services more effectively. This option may also allow schools to collaborate to collectively provide specialised subject offerings, increasing the utilisation of teachers with specialised skills. Metric 2: Increase in education participation This option is anticipated to increase the proportion of the population accessing education opportunities. In particular, it is likely to provide more opportunities to regional and remote communities.

Need 12: Improve access to jobs and services for people in regional and rural areas As discussed in Need 9, the major beneficiaries of this option are likely to be students within regional and remote communities. This option could help address gaps in qualified teachers or the availability of certain subjects. In doing so, this option would improve access to education services for students in regional and rural areas. This option is focussed on increasing the adoption of ICT within schools. It is not anticipated to have substantial impacts on the supply or management of demand for transport system capacity, nor is it considered likely to improve transport performance across the network. This option is anticipated to have a moderate contribution to the need. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas This option is not anticipated to increase the supply or management of demand for transport system capacity. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas This option is not anticipated to improve transport performance. Metric 3: Improvements in ICT connectivity in rural and regional areas This option is intended to improve the ICT connectivity of schools within rural and regional Victoria. To the degree that it lays the foundation for further technology roll-out, it may improve ICT connectivity in rural and regional Victoria more generally.

Unlocking school resources with technology SRS Page 136 Supplement B – Options assessed (document 4 of 4)

Unlocking school resources with technology SRS Page 137 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option may reduce disruptions in the delivery of education, by providing students with greater access to learning opportunities outside the classroom. It is anticipated to benefit a relatively large population, being all students across the state. It is likely to increase access to education services across the state, with particular benefits to students in regional and remote communities.

Unlocking school resources with technology SRS Page 138 Supplement B – Options assessed (document 4 of 4)

Small scale solar energy regulation SSE

Infrastructure Victoria’s Option Description Reviewing and updating regulations to streamline planning processes for the installation of solar PV on industrial and commercial buildings. This option would also improve the information provided to businesses on the process of installing solar PV and potential for grid connections where these are being considered. Sector Certainty of evidence Energy Medium Option type Evidence base Better use Australian Energy Market Operator (AEMO), Emerging Technologies Information Paper, (2015) Location and spatial context Australian Energy Market Operator (AEMO), National Electricity Forecast Report 2016, (2016) This option is applicable across the state. Australian Energy Market Operator (AEMO) and Electranet, Renewable Energy Integration in South Risks and Opportunities Australia (2014) This option may not address other barriers to Clean Energy Council (CEC) and NSW Office of expanded use, for example, potential changes to Environment and Heritage, Guide to Installing Solar local government or other regulation. PV for Businesses in NSW (2016) This option presents an opportunity to encourage Climateworks, Commercial buildings emissions the scaling-up of the solar PV to the commercial reduction opportunities (2010) and industrial sectors, through information dissemination. Grattan Institute, Sundown, sunrise: how Australia can finally get solar power right (2015) International Renewable Energy Agency (IRENA), The Power to Change: Solar and Wind Cost Reduction Potential to 2025 (2016)

Small scale solar energy regulation SSE Page 139 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, This option would be influenced by the potential to plus the annual recurrent costs incurred within the use information to improve adoption of small scale 30 year study period of this option is: solar PV by industrial and commercial users. $1 million – $10 million In response this option would induce change through providing information to users. Capital / implementation cost When could it be required? $1 million – $10 million Victoria may need this option to be implemented in: Annual recurrent costs 0 – 5 years (2016 – 2021) <$1 million What is the risk of deferring this option? Option lead time If this option were deferred there would be less If this option was committed to today, it could be guidance for installing solar PVs, especially for implemented in: commercial and industrial buildings. This may not 1 – 5 years particularly affect the number of PVs installed, if other measures are in place. Operational life The risk to the State if this option is deferred is: The expected operational life of this option (from Low opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low Costing of this option is based on development and provision of guidelines, standards and information only. The revision of regulations to speed up the planning process of solar PV installation would likely be a small change, with most of the cost associated with providing information to Victorian households and businesses. The recurrent costs of managing the streamlined planning process for solar PV installation requests would be done by LGAs, thus cost to the State Government has been assessed as minimal. Costing source Stakeholder consultation

Small scale solar energy regulation SSE Page 140 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 18: Transition to low carbon energy supply and use This option encourages the further installation and use of solar PVs in commercial and industrial buildings. This is expected to increase installation rates. Where it is installed, electricity supplied from small scale solar is likely to reduce the demand for centrally generated electricity (i.e. electricity from major power stations) which is emissions intensive. It is understood that the regulation would also be designed to promote investment effectiveness, for example, ensuring installation at technically appropriate locations. Increased use of small scale solar PV is likely to bring forward changes to the composition of energy supply. The Australian Energy Market Operator (AEMO) forecasts that the adoption of small scale solar by 2035-36, under AEMO’s assumptions, would “reduce grid demand around noon to levels that may create challenges for the operation of large thermal generators” (AEMO 2016). Other forms of generation, for example gas peaking plants, may instead be required to balance the intermittent supply from small scale solar PV (AEMO and Electranet 2014). In the future, storage may also be possible, which could further enhance the contribution of the option to the need, The incremental expansion of capacity directly resulting from this option, aside from other factors such as growing awareness of energy efficiency cost savings and changes to building standards is considered likely to be small. This option does not include subsidies or other incentives to encourage uptake. This option has been assessed as having a ‘Low’ contribution in all time periods. Metric 1: Reduction in Victoria's greenhouse gas emissions This option would likely contribution to a reduction in greenhouse gas emissions, however the contribution is not expected to be substantial.

Need 19: Improve the resilience of critical infrastructure By encouraging further installation of PVs through improving guidance, this option provide further redundancy in energy supplies, should a shock impact the energy network. Although the option would improve the redundancy of electricity generation, the National Electricity Market is currently considered to be oversupplied, and redundancy is further provided through ‘mothballed’ power stations that could be brought back into operation if demand conditions improve (AEMO 2016). Additionally, the energy supply system is highly regulated to minimise the risk of shocks, so this option is expected to have minimal resilience benefits. In addition, and as discussed in relation to need 18, the amount of additional generation installed by this option may not be significant. Accordingly, this option is rated as ‘Low’ for all time periods. Metric 1: Increase in the resilience of critical infrastructure to disruptions By encouraging further installation of PVs through improving guidance, this option provides further redundancy in energy supplies, should a shock impact the energy network. The energy network is highly regulated so that a shock does not affect energy distribution, as surplus capacity in generation exists, and solar PVs provide only intermittent supply. Metric 2: Increase in the resilience of critical infrastructure to climate change This option is considered to make only a minimal contribution to improving the resilience of critical infrastructure to climate change.

Small scale solar energy regulation SSE Page 141 Supplement B – Options assessed (document 4 of 4)

Small scale solar energy regulation SSE Page 142 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is anticipated to result in small scale and voluntary uptake of solar PV by commercial and industrial users. The impacts of the option are anticipated to be broadly neutral.

Small scale solar energy regulation SSE Page 143 Supplement B – Options assessed (document 4 of 4)

School and tertiary education cooperation STE

Infrastructure Victoria’s Option Description Encourage partnerships between schools and tertiary education providers to facilitate the sharing of infrastructure through specific educational programs, strengthening pathways for school students to transition to tertiary education. This option would include using existing schools, particularly in regional and remote areas to provide Vocational and Educational Training. Commonwealth and state governments are currently encouraging such partnerships through the Trade Training Centres and Technical Schools programs. The option includes the need to address regulatory barriers that can prevent the sharing of schools such as the workforce arrangements required for VET teachers working in a school setting and duty of care requirements for school aged students. Sector Certainty of evidence Education and training Low Option type Evidence base Better use Department of Education and Training (DET), Victorian Training Market Report 2015 (2016) Location and spatial context Regional Cities Victoria, Submission to VET Statewide Funding Review (2015) Shared use of school facilities for vocational Victorian Employers’ Chamber of Commerce and education and training could be implemented Industry (VECCI), Reforming the Victorian statewide Vocational Education and Training System: VECCI Higher Education Taskforce Report (2015) Risks and Opportunities There has been a history of uncertain funding in the TAFE sector which, if continued, could pose a risk for future partnerships. This option could broaden the educational opportunities in regional areas.

School and tertiary education cooperation STE Page 144 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the demand for VET education which is not able to be 30 year study period of this option is: accommodated within existing capacity. <$1 million In response this option would increase the capacity of the VET sector, particularly within regional and Capital / implementation cost rural areas. <$1 million When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: <$1 million 5 – 10 years (2021 – 2026) What is the risk of deferring this Option lead time option? If this option was committed to today, it could be If this option were deferred students who may wish implemented in: to undertake further study may not be able to <1 year access education opportunities. Operational life The risk to the State if this option is deferred is: Low The expected operational life of this option (from opening) is: 5 – 10 years Cost certainty The certainty of costing evidence is rated: Low This option is considered to include a medium size policy/regulatory development component that would involve preparation of policy and associated documentation, exhibition and key stakeholder consultation, review and response to public submissions, and preparation of final policy documentation. Ongoing costs to the State Government would likely be minimal. Costing source Stakeholder consultation

School and tertiary education cooperation STE Page 145 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 9: Provide access to high-quality education infrastructure to support lifelong learning Increasing the productive capacity of the Victorian education and training system was identified as a priority focus by the Victorian Employers’ Chamber of Commerce and Industry (VECCI, 2015). Enabling the use of school assets for VET courses, this option may increase the capacity of the system, while providing greater access to education infrastructure. This option could also help the vocational education sector adapt and respond to changing market conditions and student demand. There has been structural reform to the TAFE sector in the past five years, including stronger private sector involvement in course provision and changes to funding, such as the launch of the Federal VET FEE-HELP scheme. Government subsidised enrolment in TAFE courses has fallen across Victoria in the past five years, a trend seen nationwide (DET 2016). The shared use of buildings could allow TAFE course providers additional operational flexibility. This option is assessed as having a ‘Moderate’ contribution in all time periods. Metric 1: Increase in overall education asset utilisation This option is likely to increase the overall utilisation of school assets, by delivering additional services within existing facilities. Metric 2: Increase in education participation To the extent that this option encourages potential students to undertake VET study who otherwise would not have done, this option may increase the proportion of the population accessing education opportunities.

Need 12: Improve access to jobs and services for people in regional and rural areas This option could improve the quality of buildings and equipment used to provide Vocational Education in regional and rural areas. A high percentage of enrolments in higher education facilities in some regional cities are drawn from regional catchments, particularly in areas such as Bendigo and Gippsland. Retention of students in smaller catchment communities is contributes to the economic and social well-being with the regions. Disengagement is a very real possibility given the complexity of travel and remote learning (Regional Cities Victoria, 2015). Given the extent of travelling involved from more remote rural communities, access for these students would be enhanced through improvements to transport corridors across regional Victoria and improved public transport options between and within regional cities. As discussed in relation to Need 9, a number of changes have occurred in the Vocational Education and Training market in the past five years. Government subsidised enrolment in TAFE course has fallen across regional Victoria in the past five years, a trend seen across the State and Nationwide. (DET 2016). The shared use of buildings could allow TAFE course providers additional operational flexibility to continue to provide services in regional and rural areas. This option is assessed as having a ‘Moderate’ contribution in all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas This option may reduce the demand for transport system capacity to accommodate journeys to and from service centres, if vocational education is provided within existing schools in these locations. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas This option may reduce the distance required to be travelled by students in regional and rural areas to access education services. However, it is not anticipated to improve transport performance to a substantial degree. Metric 3: Improvements in ICT connectivity in rural and regional areas Overall it is unlikely to improve ICT connectivity in rural and regional Victoria.

School and tertiary education cooperation STE Page 146 Supplement B – Options assessed (document 4 of 4)

School and tertiary education cooperation STE Page 147 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary By increasing educational opportunities to students, particularly in rural and regional areas, this option may improve innovation over the long run. It may also have broader societal benefits, in that it increases community access to education opportunities, and targets rural and regional communities in particular.

School and tertiary education cooperation STE Page 148 Supplement B – Options assessed (document 4 of 4)

Strategic transit-oriented centres and corridors STO

Infrastructure Victoria’s Option Description This option is to develop a strategy to achieve Transit-oriented development in urban areas. Transit-oriented development is the intensification of housing and businesses around existing (or proposed) major public transport infrastructure. This option would designate and prioritise a set of strategic public transport corridors that are suited for transit oriented development. Existing examples include Sydney Road Brunswick, St Kilda Road and Chapel St Prahran. This option is to prioritise the intensification of National Employment Centres such as La Trobe, Sunshine and Monash, and Major Activity Centres, such as Box Hill, and their supporting transport corridors. This would include:

- zones that enable residential and mixed use intensification of key station precincts, along tram lines, and the bus network. - consideration of demand management measures to maximise access to rail infrastructure and reduce congestion. Sector Certainty of evidence Transport Medium Option type Evidence base Better use University of Melbourne and Monash University, Intensifying Melbourne: Transit-Oriented Urban Location and spatial context Design for Resilient Urban Futures (2014) Melbourne Wide UN-Habitat, Transforming Cities with Transit- This option would apply to specific areas in Robert Cervero You Tube (2015) Melbourne, potentially including National Victorian Auditor General’s Office (VAGO), Employment Centres such as La Trobe, Sunshine Developing Transport Infrastructure and Services and Monash, and Major Activity Centres, such as for Population Growth Areas (2013) Box Hill, and their supporting transport corridors. Risks and Opportunities There is often community resistance to residential intensification in existing established suburbs, including along transport corridors. This option assumes that some infrastructure would need to be upgraded in the established areas. It remains a complex process to collect contributions from developers towards the cost of upgrading and retrofitting existing infrastructure. The effectiveness of this option in greenfield areas depends on the commitment to investing in new public transport services. There are opportunities to align this option with the development of major and emerging employment centres. This option could be combined with the option SIP when applied to growth areas.

Strategic transit-oriented centres and corridors STO Page 149 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the increasing land pressure and prices, congestion 30 year study period of this option is: and the need to utilise land use and transport more efficiently. $10 million – $25 million In response this option would improve utilisation of Capital / implementation cost transport systems, by increasing trip capture and $1 million – $10 million aligning population growth with where transport systems can best absorb additional capacity. Annual recurrent costs When could it be required? <$1 million Victoria may need this option to be implemented in: 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be implemented in: option? 1 – 5 years If this option were deferred there would be missed opportunities to better align urban development Operational life projects with major transport projects and upgrades. This would likely result in continuity of current use of The expected operational life of this option (from transport modes, with implications for congestion, opening) is: economic growth, and travel times. 10 – 25 years The risk to the State if this option is deferred is: Cost certainty Medium The certainty of costing evidence is rated: Low This option is considered to include a medium size strategy (including reviewing the existing planning controls with a view to reducing barriers to densification along transport rich corridors) and policy development component that, from the State Government, would involve preparation of policy and associated documentation, public and key stakeholder consultation, review and response to public submissions, and preparation of final policy documentation. It is expected that the implementation of this policy would be undertaken by State and local governments for a period between 10 – 25 years, and that the strategy would require regular review to respond to changed market conditions. Costing source Stakeholder consultation

Strategic transit-oriented centres and corridors STO Page 150 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth Growth area LGAs have a lower level of access to public transport than more established areas of Melbourne, and there are significant investment backlogs to provide these services (VAGO 2013). This option could improve access to transport infrastructure by ensuring that residential and commercial infrastructure is planned in response to existing and future transport projects. Many growth LGAs are sites of greenfield development, and so have a high potential for benefit from this option. Implementing the option in under-developed areas means that there may be a greater opportunity to align planning changes with transport planning to support intensification along transport corridors. In these areas, there is also the potential to design active transport infrastructure to support the use of public transport. Examples of potential high growth areas include LGAs in Melbourne’s north, where planning changes could be used to maximise access to potential public transport investments such as the South Morang Tram extension. The Mernda rail extension is another example of a project where access to public transport could be further enhanced by planning amendments supporting densification along the rail corridor. This option is considered to have the highest contribution to greenfield growth LGAs. The contribution to the needs of more established LGAs where high growth is expected, such as the City of Melbourne, is expected to be lower due to the reduced opportunities to effect change through planning, relative to greenfield or under- developed sites. This option is considered to have a ‘Moderate’ contribution to the need, assuming that public transport services are expanded to accommodate greenfield growth areas. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option could improve community access to and use of public transport where new services are provided to support growth areas.

Need 10: Meet growing demand for access to economic activity in central Melbourne This option would encourage greater efficiency of integrating land use development with transport capacity and therefore has the potential to manage demand for trips, through reduction of unnecessary trips associated with mixed-land use and trip capture, and secondly developing land use and population densities that can support more frequent and higher quality services and network connections. This would also be reliant on other options that would specifically address network capacity and so forth, and therefore this option is rated as moderate for managing demand for journeys to and from the central city. This contribution is anticipated to remain constant over the 30 year period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city The strategic development of areas that are well-serviced by mass-transit can contribute to meeting growing demand for access to the central city. Therefore this option is rated as moderate. Metric 2: Improvements in transport performance across the network to access central Melbourne This option would support other initiatives that can improve transport performance, through better integration of future development with the mass-transit network. As it requires alignment with other options, by itself it is rated low for this metric.

Need 11: Improve access to middle and outer metropolitan major employment centres This option would integrate further development with transport, including around major employment and transport hubs such as Box Hill. Therefore this option is rated as moderate. This contribution is anticipated to remain constant over the 30 year period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres This option would assist in meeting this metric, but by itself would not increase supply or management of demand for transport and therefore would make a low contribution to this option.

Strategic transit-oriented centres and corridors STO Page 151 Supplement B – Options assessed (document 4 of 4)

Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres This option would assist in meeting this metric, but by itself would not improve transport performance across the network and therefore would make a low contribution to this option.

Strategic transit-oriented centres and corridors STO Page 152 Supplement B – Options assessed (document 4 of 4)

Strategic transit-oriented centres and corridors STO Page 153 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Over time, this option is likely to encourage densification in the vicinity of public transport networks. By increasing access to public transport, this option may positively impact on access to jobs, and to social infrastructure. The densification supported by this option is also anticipated to have benefits for housing supply and affordability. This option may have positive environmental impacts through encouraging mode shift from passenger vehicles to public transport by making public transport more accessible and convenient. Transit oriented developments also benefit resource use by supporting impact communities more efficiently served by investments in infrastructure.

Strategic transit-oriented centres and corridors STO Page 154 Supplement B – Options assessed (document 4 of 4)

South Yarra Metro station SYM

Infrastructure Victoria’s Option Description Provide a new station in the proximity of the existing South Yarra Station, on the alignment of the Melbourne Metro Rail Project (MMR). The additional station would increase the number of journeys for which people could travel to and from South Yarra without interchanging, increase the number of trains stopping at South Yarra, and allow interchanges to occur at South Yarra which would otherwise occur elsewhere in the network. Sector Certainty of evidence Transport Medium Option type Evidence base New or expanded assets Department of Economic Development, Jobs, Transport and Resources, Melbourne Metro Location and spatial context Business Case (2016) Metropolitan Public Transport Victoria, Melbourne Metro Rail This option is likely to affect public transport users Project – South Yarra Metro Station: Customer in the southern subregion in particular. Depending Outcomes and Economic Assessment Report on their travel intentions, public transport users may (2015) be positively or negatively impacted, while road users may experience slight benefits. Risks and Opportunities This is a high cost project with complexity and extensive disruption or risk regarding working in brownfields region. Direct interchange access from existing South Yarra station to additional South Yarra station on Melbourne metro alignment, resulting in additional journey options.

South Yarra Metro station SYM Page 155 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, This option could be influenced by a higher than plus the annual recurrent costs incurred within the expected growth in passenger numbers using South 30 year study period of this option is: Yarra station. $1 billion – $3 billion In response this option would for passengers utilising the station and provide additional options to Capital / implementation cost interchange, which could allow for more journey $750 million – $1 billion choices for some passengers. When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $25 million – $50 million 10 – 15 years (2026 – 2031) Option lead time NOTE: this option is directly tied to the construction of Melbourne Metro, and adding this station to the If this option was committed to today, it could be scope could delay the project delivery. This would implemented in: be from the need to gain further statutory approvals 1 – 5 years and other planning/design/construction requirements (including land acquisition). Operational life What is the risk of deferring this The expected operational life of this option (from option? opening) is: If this option were deferred passengers would need >50 years to use other interchange stations on the network to Cost certainty change between services. The certainty of costing evidence is rated: The risk to the State if this option is deferred is: High Low The capital cost is based on the direct interchange to South Yarra station which is defined in the Melbourne Metro Business Case. Annual recurrent costs are assumed to be three percent of capital cost. This is higher than other heavy rail options because the capital is directly for a station (as opposed to rail) which, as a high traffic zone, would require a more significant proportion of investment to maintain operation. Costing source Department of Economic Development, Jobs, Transport and Resources, Melbourne Metro Business Case (2016)

South Yarra Metro station SYM Page 156 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth The impact of the new South Yarra platform on the Dandenong (Melbourne Metro) line will depend on the destination of passengers' travel (Public Transport Victoria 2015). Passengers travelling by rail to or from the South Yarra area are likely to benefit from the additional rail services to South Yarra and a direct connection to the Dandenong rail corridor. Similarly, road users may benefit due to reduced congestion. However, travel times of passengers travelling on the Dandenong line going through South Yarra will increase. Overall, Public Transport Victoria considers there to be a net decrease in benefits to existing public transport users of approximately 1,500 travel hours a day by 2031 (Public Transport Victoria 2015). This option is not anticipated to contribute strongly to addressing infrastructure demands in high growth areas. It is anticipated to increase travel times in aggregate, and as such receives a 'Very low/Negative' contribution rating in each time period. Metric 1: Ability to improve access to services or increase service capacity for high growth areas Public Transport Victoria anticipates that this option would increase travel times for over 100,000 passengers per day, increasing aggregate daily travel times per 1,500 hours. This option is not anticipated to address infrastructure demands in high growth areas.

Need 10: Meet growing demand for access to economic activity in central Melbourne Similar to the reasons mentioned above for Need 1, this option is not anticipated to significantly improve access to the central Melbourne. Although there may some benefits to road users and new users of the public transport system, overall travel times are anticipated to increase by 1,500 travel hours by day by 2031 (Public Transport Victoria 2015). This option receives a 'Very low/Negative' contribution rating in each time period. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city Public Transport Victoria anticipates that this option would increase travel times for over 100,000 passengers per day, increasing aggregate daily travel times per 1,500 hours. This option is anticipated to decrease the supply of transport system capacity to accommodate journeys to the central city. Metric 2: Improvements in transport performance across the network to access central Melbourne This option is anticipated to worsen transport system performance, by 1,500 travel hours per day by 2031.

South Yarra Metro station SYM Page 157 Supplement B – Options assessed (document 4 of 4)

South Yarra Metro station SYM Page 158 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is associated with localised benefits to access for those in the catchment area of the station. While these benefits are positive for those in the catchment area, they are considered to be marginal. Given it is anticipated to aggregate journey times, this option may increase the number of households with a journey to work of more than 45 minutes.

South Yarra Metro station SYM Page 159 Supplement B – Options assessed (document 4 of 4)

Technology enabled healthcare TEH

Infrastructure Victoria’s Option Description Telehealth and other substitutes for face to face interactions. The ability to substitute traditional face to face service demand requires the development of a statewide technology solution that enables activity like videoconferencing and remote monitoring. It would be underpinned by a secure network (established in Option 10) and enable technologies to ‘plug-in’ and share information. Additional upfront investment in establishing minimum capability in mobile healthcare is required. To date, the Department of Health and Human Services has developed a Telehealth Strategy that outlines the proposed way forward for telehealth in public health services. In addition, in 2016/17 the Government allocated $5m in output funding to grow telehealth services in specialist clinics. The cost estimates provided include the capital cost estimates for developing the IT infrastructure and solution (primarily funded by the State Government) along with the recurrent cost to maintain the solution (funding from the Commonwealth and State Government). Sector Certainty of evidence Health and human services High Option type Evidence base Better use BMC Health Services Research, A comprehensive evaluation of the impact of telemonitoring in patients Location and spatial context with long-term conditions and social care needs: protocol for the whole systems demonstrator cluster randomised trial (2011) This option could be implemented statewide. British Medical Journal (BMJ), Cost effectiveness of Risks and Opportunities telehealth for patients with long term conditions (Whole Systems Demonstrator telehealth The health workforce will need to support to adjust questionnaire study): nested economic evaluation in to the change in service delivery. a pragmatic, cluster randomised controlled trial There may be legal barriers to service adoption. (2013a) This option will not be appropriate for all patients, British Medical Journal (BMJ), Effect of telehealth and so care needs to be taken to provide on quality of life and psychological outcomes over alternatives. For example, vision or hearing 12 months (Whole Systems Demonstrator impaired patients may need additional support to telehealth questionnaire study): nested study of use services effectively, or may prefer other patient reported outcomes in a pragmatic, cluster treatment options. randomised controlled trial (2013b) This option may be more suitable for certain kinds UK Department of Health, Whole system of health services than others, and so there is an demonstrator programme: Headline findings – opportunity to target the implementation of December 2011 (2011) telehealth services. Department of Health & Human Services, Travis There is the opportunity to improve utilisation of review – Increasing the capacity of the Victorian community health infrastructure, such as general public hospital system for better patient outcomes practitioner practices, by using them as sites for (2015) patients to access telehealth services. Health Outcomes International, Evaluation of the in- home telemonitoring for vetrans trial (website accessed July 2016) Grattan Institute, Access all areas: New solutions for GP shortages in rural Australia (2013) PwC, Health Options Paper – advice to Infrastructure Victoria (2016)

Technology enabled healthcare TEH Page 160 Supplement B – Options assessed (document 4 of 4)

Queensland Parliament (Health and Community What could influence this option? Services Committee), Inquiry into telehealth services in Queensland (2014) The need for this option could be influenced by a decision to explore the use of telehealth service Direct option cost delivery to increase access to healthcare services, potentially with the aim of improving access in The capital or implementation cost of the option, regional areas. plus the annual recurrent costs incurred within the 30 year study period of this option is: In response this option would increase the availability of telehealth services for remote access. $100 million – $250 million Capital / implementation cost When could it be required? Victoria may need this option to be implemented in: $50 million – $100 million 0 – 5 years (2016 – 2021) Annual recurrent costs What is the risk of deferring this $1 million – $10 million option? Option lead time If this option were deferred, then current identified regional issues of access to some health services If this option was committed to today, it could be could continue, and patients across the state may implemented in: continue to need to travel to health care centres like hospitals to receive consultation with specialists. 1 – 5 years The risk to the State if this option is deferred is: Operational life Low The expected operational life of this option (from opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated:

The Queensland Department of Health 2012-13 Annual Report stated that $30.9 million over four years would be provided to establish a Rural Telehealth Service. The capital cost assumption for this option is based on two investments of this value being made in Victoria over the next 30 years, one to address current demand, and another to address demand at a future point. It is assumed that approximately several million in operating expenses would be required each year to manage and update the case management system. Costing source Queensland Government Department of Health, 2012-13 Annual Report (2013) Victorian Auditor-General's Report, Digital Dashboard: Status Review of ICT Projects and Initiatives (2015)

Technology enabled healthcare TEH Page 161 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 3: Respond to increasing pressures on health infrastructure, particularly due to ageing This option responds to increasing pressures on health infrastructure, from, for example, aging of the population or increased incidence of chronic and complex disease, by through technology. This is proposed with two main aims. The first is to improve access to health services by remote technology such as videoconferencing. The second is to improve quality of care through services such remote monitoring Telehealth services can improve access to healthcare, largely by reducing the burden of travel on patients to access services. This is especially true of health care services that are not commonly provided in local communities, such as outpatient clinics at hospitals or other specialised services (Queensland Parliament 2014). Reduced travel minimises the disruption that patients face to access healthcare, and can lower the cost of providing services if travel would otherwise be subsidised (Queensland Parliament 2014). This finding is different to results seen from large-scale trials in the United Kingdom (BMJ 2013a), and likely reflects the increased burden of travel in Australia, both on the patient and in terms of travel costs. It has been noted that telehealth services may not be appropriate or cost effective for health services that are provided locally, for example, the services of general practitioners (Health and Community Services Committee 2014). Additionally, some health services may be better suited to telehealth access (for example, dietetics) than others (physiotherapists). The evidence for the second mechanism of the option, remote monitoring, is mixed. The Whole Systems Demonstrator Evaluation was a large scale trial (>3000 patients) in the UK of the use of technology to support remote monitoring of changes in an individual’s condition (i.e. falls sensors) and management of health care conditions (for example blood glucose levels for diabetic patients) (BMC 2011). While early findings from the trial were extremely positive (UK Department of Health 2011), published results concluded that there were limited benefits from the intervention and that it was unlikely to be cost effective (BMJ 2013a, BMJ 2013b). In their literature review, the journal authors also found mixed evidence for the benefits of telemonitoring (BMJ 2013a, BMJ 2013b). The evaluation of monitoring using technology does not appear to be as advanced as access, although a program run by the Department of Veterans Affairs is currently under evaluation (Health Outcomes International 2016). The contribution to the option is anticipated to be ‘Moderate’, as while telehealth services have a lot of potential and there is evidence of their effectiveness, they may not be appropriate across all health services or patients. Metric 1: Improvements in access to health services This option can have strong advantages to access to services such as hospital/sub-acute services, particularly for those who live a long distance from these services, or who experience mobility challenges. This has been found to be especially effective in delivering outpatient clinic services (Queensland Parliament (Health and Community Services Committee) 2014). Metric 2: Increase in efficiency of health services This option could improve the efficiency of health services through reducing the need for clinicians to travel.

Need 2: Address infrastructure challenges in areas with low or negative growth Victorians in regional and rural areas may experience lower availability of health services (Grattan 2013), and are likely to experience longer travel times to access specialist health services than Victorians in urban areas. These issues are amplified for areas where population is declining or growing only slowly, as there is even less likely to be the density to support full utilisation of health infrastructure. In addition, these populations may also have high needs, as decline or low growth in population may not occur evenly across all age brackets. For example, population declines can result in a growth in the proportion of aging residents as those from younger age groups move away. Telehealth services may offer the flexibility to help support Victorians in low growth communities, through remote delivery of health services. Telehealth services can provide patients with remote access to services, such as out- patient clinic, reducing the need for patients to travel (Queensland Parliament 2014). Telehealth services could potentially benefit patients through remote monitoring of their conditions, however, the evidence base for this remains unclear, as discussed in relation to Need 3. This option could enable innovation to support the ongoing provision of services in areas with low or negative growth. Its contribution to the need has been assessed as ‘Significant’ in each time period.

Technology enabled healthcare TEH Page 162 Supplement B – Options assessed (document 4 of 4)

Metric 1: Ability to optimise infrastructure delivery while maintaining or improving service delivery within low growth areas This option has been shown to support better access to health services for regional and remote communities. Through ICT, Victorians in low growth LGAs could have improved access to a number of specialist health services.

Need 12: Improve access to jobs and services for people in regional and rural areas Victorians in regional and rural areas may experience lower availability of health services (Grattan 2013), and experience longer travel times to access specialist health services than Victorians in urban areas. As discussed in relation to Need 3, Telehealth services have been used in other jurisdictions to specifically target access for those in regional and rural areas to health services. Telehealth services can provide virtual link to services, reducing the need for patients to travel and so improving ease of access. This is especially true of health care services that are not commonly provided in local communities, such as outpatient clinics at hospitals or other specialised services (Queensland Parliament (Health and Community Services Committee) 2014). Expanded use of telehealth services in Queensland has been shown result in reduced patient travel, avoided patient retrieval and transfer, reduced clinician travel and avoidance of unnecessary hospital admissions (Queensland Parliament (Health and Community Services Committee), Inquiry into telehealth services in Queensland 2014). Telehealth services may also have benefits through remote monitoring of patients, however, as discussed in relation to Need 3, the evidence for benefits is mixed. This option does not specifically address the metrics chosen to establish an option’s contribution to need 12, however, by improving access to vital health services the option is considered likely to have a ‘Significant’ contribution. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas This option is not expected to make a contribution to this metric. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas This option is not expected to make a contribution to this metric. Metric 3: Improvements in ICT connectivity in rural and regional areas The investment required to deliver this option may benefit ICT connectivity more generally.

Technology enabled healthcare TEH Page 163 Supplement B – Options assessed (document 4 of 4)

Technology enabled healthcare TEH Page 164 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to have strong benefits for access to healthcare by using ICT to reduce the need of patients to travel to receive services. Regional and remote communities in particular are expected to benefit. Over time, improved access is anticipated to result in better community health. By reducing the burden of travel on patients, they may seek to use services more frequently and avoid the need for major interventions such as hospitalisation. Through this, and the reduced need to provide patient transport services, the government is expected to avoid costs.

Technology enabled healthcare TEH Page 165 Supplement B – Options assessed (document 4 of 4)

Major Hospital Redevelopments THR

Infrastructure Victoria’s Option Description This option provides for major hospital development projects over the next 30 year period. In Victoria we have several major hospital campuses that provide a combination of statewide services for highly unique or complex conditions and specialist services. Typically these facilities are updated on an incremental basis, but at times due to the aged state of the asset or an identified health service gap, these facilities are redeveloped on existing or new hospital sites as a consolidated major development project. Projects in this category would have a capital value in excess of $500 million. Recent examples include:

- New Royal Children’s Hospital project - Bendigo Hospital Redevelopment - Victorian Comprehensive Cancer Centre - The planned Victorian Heart Hospital Existing facilities that are in need of major redevelopment or replacement in the medium term include the Alfred Hospital and Royal Melbourne Hospital. In the longer term a new facilities will be required to support population growth or a new statewide specialist health service. The cost estimates provided include the capital cost estimates for developing the infrastructure (which could be funded from private sector, State and Commonwealth Government funds) along with the recurrent cost to maintain the solution. Sector Certainty of evidence Health and human services Medium Option type Evidence base Better use/New or expanded assets Department of Health & Human Services, Travis review – Increasing the capacity of the Victorian Location and spatial context public hospital system for better patient outcomes (2015) Melbourne central subregion Statewide NHS, Five Year Forward View (2016) PwC, Health Options Paper – advice to This option will most directly affect hospitals in inner Melbourne. As these hospitals provide services to Infrastructure Victoria (2016) the whole state, the benefits are considered to accrue across Victoria. Risks and Opportunities Renovating or incrementally expanding hospitals presents operational challenges and may be higher risk than greenfield development. There is the opportunity to explore the trend towards centres of excellence seen in other health systems NHS, Five Year Forward View (2016) in the implementation of this option.

Major Hospital Redevelopments THR Page 166 Supplement B – Options assessed (document 4 of 4)

Direct option cost Summary: The new Royal Children's Hospital Project (2008) The capital or implementation cost of the option, plus the annual recurrent costs incurred within the The Royal Children's Hospital Melbourne, Annual 30 year study period of this option is: Financial Report 2014-15 (2015) >$10 billion (~$20 - $25 billion) Victorian Comprehensive Cancer Centre Project website, Victorian Comprehensive Cancer Centre Capital / implementation cost Project (2016) $3 billion – $5 billion What could influence this option? The need for this option could be influenced by the Annual recurrent costs opportunity to refurbish existing hospitals to meet $500 million – $1 billion demand more effectively in the future. In response this option would lead to the Option lead time refurbishment of several large inner-city hospitals that provide specialised services to the whole state, If this option was committed to today, it could be to allow them to play this role in the future more implemented in: effectively. 5 – 10 years When could it be required? Operational life Victoria may need this option to be implemented in: The expected operational life of this option (from 5 – 10 years (2021 – 2026) opening) is: 25 – 50 years What is the risk of deferring this option? Cost certainty If this option were deferred, the role played by major The certainty of costing evidence is rated: hospitals may reduce in effectiveness over time. Medium The risk to the State if this option is deferred is: Cost estimates have been developed assuming the Medium redevelopment of three major hospitals in Melbourne. The Victorian Comprehensive Cancer Centre is being delivered with a total investment of $1 billion, a similar cost to the new Royal Children's Hospital. It is assumed that three new health centres of similar size to the Victorian Comprehensive Cancer Centre and Royal Children's Hospital will be required over the next 30 years.

Recurrent cost repair and maintenance costs of have been based off an assumption of $430,000 per annum per new hospital, based average repair and maintenance costs for principal referral hospitals Australia (AIHW 2015). It is noted that for hospitals, as with other buildings, there are a number of trade-offs that can be made between construction and ongoing maintenance costs, and maintenance costs will also depend on the nature of the facility built. Costing source Australian Institute of Health and Welfare (AIHW), Hospital Resources 2014-15 (2015) Department of Human Services and Department of Treasury and Finance, Partnerships Victoria Project

Major Hospital Redevelopments THR Page 167 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 3: Respond to increasing pressures on health infrastructure, particularly due to ageing Over the next 30 years Victoria’s population is forecast to grow strongly, placing increased pressure on the health system. Demographic factors, such as the aging of the population and the increased prevalence of chronic and complex diseases, are also anticipated to increase demand on the healthcare system. Major hospital sites such as the Alfred Hospital and the Royal Melbourne Hospital have a large scale of operation. These hospitals, and others like the Royal Women’s or the Royal Children’s Hospital support highly specialised medical services and accommodate other functions such as teaching and research. These hospitals currently meet Statewide needs as they have the depth to provide services for unique or complex conditions. There is international evidence of better medical outcomes when specialisation of complex services is supported (PricewaterhouseCoopers 2016). This option involves supporting a ‘centre of excellence’ model through investment to expand or replace existing hospitals to address demographic changes. This option receives a 'Moderate' contribution rating against Need 3. Metric 1: Improvements in access to health services By refurbishing, expanding or replacing existing hospitals this option is likely to have a 'Moderate' contribution to this metric. Metric 2: Increase in efficiency of health services This option proposes adapting the existing supply of hospital services to better support current medical practice and address future areas of demand. This could enable efficiency gains as hospitals facilities could better match their sites.

Major Hospital Redevelopments THR Page 168 Supplement B – Options assessed (document 4 of 4)

Major Hospital Redevelopments THR Page 169 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to have benefits for access to healthcare, by supporting and enhancing the role currently played by major hospitals into the future. Existing large inner-city hospitals are able to support a significant specialisation and so provide services to the whole state. Additionally, they are able to support other functions such as specialist training and research. By maintaining and repurposing capacity, this option is considered to have benefits for the resilience of the healthcare system and its ability to meet future demand.

Major Hospital Redevelopments THR Page 170 Supplement B – Options assessed (document 4 of 4)

Tram network extensions TNE

Infrastructure Victoria’s Option Description Extend tram lines and complete network links with other major transport and destination hubs. Extending the tram network contributes to amenity and the attractiveness for businesses and people to relocate to new areas and supports higher land use densities. Tram extensions to train stations promote multimodal travel and mode shift. This increases people’s ability to access employment, services and activities in their local areas. Priorities for implementation include:

- connections with heavy rail and other public transport; e.g. The extension of route 5 Malvern to Darling railway station - connections to major activity centres; e.g. The extension of Route 48 North Balwyn to Doncaster shopping centre - high-demand connecting bus corridors; e.g. The extension of Route 75 Vermont South to Knox shopping centre - ‘missing’ tram network links and connections; e.g. The extension of Route 82 Footscray to Docklands. Another example of strategic network extension is represented by the potential for an inner-orbital tram route from Nicholson street, along Brunswick Road and southbound on Royal Parade to the planned Parkville Station from Melbourne Metro 1, which would help relieve the congested tram routes 1 and 8 (Lygon Street) as well as offer the opportunity for improved connections into Melbourne CBD. This option supports enhanced access to the central city and middle and outer metropolitan major employment centres. Sector Certainty of evidence Transport Medium Option type Evidence base Better use/New or expanded assets Department of Treasury and Finance, Release of costing of election commitment – Fill missing tram Location and spatial context links (2014) This option will affect areas potentially within reach Public transport users association, Policies: of the existing Melbourne tram network. Extending Melbourne's Network (2016) Risks and Opportunities Department of Environment, Land, Water & Planning (DELWP), Victoria in Future 2015 and Much of the construction of this option will occur in Victorian Government unpublished population existing road corridors, however the risk of this is projections (2015) assumed to be managed during the planning phase. There is an opportunity to upgrade multimodal interchanges with other forms of transport.

Tram network extensions TNE Page 171 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the potential demand for tram services, which may 30 year study period of this option is: optimise the performance of the local road networks. $1 billion – $3 billion In response this option would increase the supply of Capital / implementation cost the tram network. $1 billion – $3 billion When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $25 million – $50 million 0 – 5 years (2016 – 2021) What is the risk of deferring this Option lead time option? If this option was committed to today, it could be If this option were deferred, public transport around implemented in: Melbourne may not improve at a sufficient rate. 1 – 5 years The risk to the State if this option is deferred is: Operational life Medium The expected operational life of this option (from opening) is: 25 – 50 years Cost certainty The certainty of costing evidence is rated: Medium Cost assumptions used were similar to that of the Department of Treasury and Finance which were used for the Greens Fill missing tram links policy. Cost assumptions are as follows: Cost per kilometre of tram extension, inclusive of overhead works is $15 million per kilometre; each Disability Discrimination Act compliant tram stop (located approximately every 300 metres) costs $1.7 million; each tram terminus costs $5 million; extensions over five kilometres require a $5 million substation each five kilometres; it costs $2.8 million per major intersection to accommodate new tram infrastructure. Without exact tram alignment known for this option it is assumed an average total cost of $24 million per kilometre of track. The capital cost estimate assumes that tram extensions total 50 kilometres. Annual recurrent costs have been calculated at three percent of capital cost. Costing source Department of Treasury and Finance: Release of costing of election commitment – Fill missing tram links (2014)

Tram network extensions TNE Page 172 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth Besides the Melbourne CBD which is already very well serviced by the tram network, all of the highest population growth areas in Victoria are in the outer suburbs of Greater Melbourne. Of the top five growth LGAs in terms of absolute population in the next 30 years (DELWP 2015), only Hume and Whittlesea (both in Melbourne's outer north) are within 10km of an existing tram line, however the majority of growth in Hume will be in the Bulla / Sunbury areas which are more than 10km away from the route 59 tram in Airport West. This means the only smaller-scale tram extension to service a growth area would be the route 86 tram from Bundoora RMIT to South Morang and the Whittlesea growth area. The Whittlesea growth area is currently experiencing extremely fast development, which may be accelerated by the Mernda rail extension (due 2019). On a slightly smaller scale, urban infill growth areas through the middle and inner suburbs may benefit from improved public transport connections. This option is considered to have a ‘Moderate’ contribution to Need 1 in all time periods. Metric 1: Ability to improve access to services or increase service capacity for high growth areas Trams can provide excellent connections between activity centres which can provide vital public transport links in high-growth areas. Need 10: Meet growing demand for access to economic activity in central Melbourne Using the tram network to access the central city becomes less viable the further away from the CBD the line goes. For middle and outer suburban tram lines, potential tram extensions would be used more for local trips or as connections to the heavy rail network rather than directly accessing the central city. If the ends of tram lines are extended, trams may reach capacity earlier up the line meaning it reduces the ability of people living in the inner-suburbs to use the network during peak times. This may be resolved through more frequent services or higher-capacity trams. Densification of the inner suburbs have been planned around existing train and tram lines, and even though these will play a more important role in the future the extensions included in this option may not prove to be more effective over time. This option has been assessed as having a ‘Low’ contribution to Need 10 in all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city Filling missing links in the tram network will improve access to the central city, especially through the ability to transfer to the heavy rail network. Metric 2: Improvements in transport performance across the network to access central Melbourne The increased use of public transport will reduce the number of private vehicles on the road, reducing congestion and increasing network efficiency. Need 11: Improve access to middle and outer metropolitan major employment centres A key factor in the perceived success of a tram extension in a middle and outer metropolitan suburbs is connecting to a high-activity generator (such as a major shopping centre, train station or university). Many of the trips taken on trams in middle and outer suburbs are local journeys, which has the potential to reduce localised traffic and improve congestion at peak times. As the outer-growth suburbs develop, there may be a greater need for high quality public transport connections to allow residents to move between local activity centres. This option is anticipated to have a ‘Moderate’ contribution to Need 11. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres Tram extensions will increase the provision of public transport to middle and outer employment centres. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres Arterial road congestion may reduce due to public transport mode shift in the middle and outer suburbs.

Tram network extensions TNE Page 173 Supplement B – Options assessed

Tram network extensions TNE Page 174 Supplement B – Options assessed

Economic, social and environmental assessment summary By increasing the reach and improving the efficiency of the Melbourne tram network, residents of middle and outer ring suburbs will be able to access a high quality form of public transport for trips to jobs, education, healthcare and social opportunities. Due to the quantum of this option, this has the potential to increase mode shift from personal vehicles to public transport and reduce congestion and localised pollution.

Tram network extensions TNE Page 175 Supplement B – Options assessed

Real time public transport information TNI

Infrastructure Victoria’s Option Description Develop an ICT platform that can coordinate real time data from all public transport operators to allow private software developers to create applications that will support commuters to make real time and plan multi-modal decisions about their journey. This data could be made publically available through Victoria’s Open Data Directory based on the Transport for London example. It thereby has the potential to reduce and spread peak period demand and assist passengers to better deal with disruptions on the network. This will improve the comfort of services to passengers, reduce barriers to accessing public transport and increase the utilisation of existing transport infrastructure. Sector Certainty of evidence Transport Low Option type Evidence base Changing behaviour/Better use Waze, Waze Live Map Portal (website, accessed July 2016) Location and spatial context Transport for London, Open Data Users Portal Statewide website accessed July 2016) This option could have Statewide impacts. Australian Bureau of Statistics, Census 2011 Risks and Opportunities The development of a new network may struggle to successfully integrate and coordinate data from different transport modes and operators. This could lead to project delays and cost overruns. To make a contribution to the need, this option would need to outperform existing private and public sector transport information tools. This option implies better monitoring of the use of transport systems, which should support better identification of the communities transport needs for project development. Additionally, there may be opportunities for passengers to contribute their own real time observations to the system as they may be more responsive to incidents than VicRoads or PTV.

Real time public transport information TNI Page 176 Supplement B – Options assessed

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the peaks in demand spread unevenly across networks 30 year study period of this option is: and time, with substantial instances of excess demand. $10 million – $25 million In response this option would improve utilisation of Capital / implementation cost the transport system, by providing travel time $10 million – $25 million information to passengers which may spread demand across non-peak periods and assist passengers to deal with disruptions on the network. Annual recurrent costs When could it be required? $1 million – $10 million Victoria may need this option to be implemented in: Option lead time 0 – 5 years (2016 – 2021) If this option was committed to today, it could be What is the risk of deferring this implemented in: option? 1 – 5 years If this option were deferred the private sector may Operational life develop products that achieve similar outcomes. The expected operational life of this option (from The risk to the State if this option is deferred is: opening) is: Medium 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low This option represents an IT based coordination tool designed to disseminate transport information across a wide spectrum of public users. Associated costs include the cost of maintaining the website plus the labour needed to collect and organise the data on an ongoing basis. Costing source Stakeholder consultation

Real time public transport information TNI Page 177 Supplement B – Options assessed

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne This option focuses on managing demand for the existing transport system capacity to accommodate journeys around Melbourne. It is inferred that if demand is better managed then transport performance may be able to improve with lower average travel times across the network. This option is aimed at reducing information asymmetry between commuters and PTV such that commuters have access to information across the network in real time so they can make optimal decisions for their journeys. The 2011 census found that 43 percent of people use some form of timetabled public transport to access central Melbourne for work (~200,000 people). The beneficiaries of this option would therefore be a subset of these people who currently are not making the most efficient public transport journey choices everyday due to either their gaps in knowledge of the public transport system, or are hindered by unexpected disruptions (e.g. significant train delays). The success of this option (in improving overall transport performance) also relies on the individual having the propensity to actively use the tool / application (requiring an applicable level of technological literacy) and then their willingness to break any journey habits they have made. For the people that meet this criteria, the benefits are expected to be high (assuming the communication tool significantly outperforms existing tools) and will continue to be strong provided that the program evolves and adapts to ongoing changes in technology. There may also be benefits to commuters in the reduction of any perceived barriers to using public transport (understanding services, reliability, etc.). Although there will be significant customer service benefits from this option, the contribution to the need would be dependent on the increase in the performance of the overall transport network from these people making changes (if and when they are necessary). On the assumption that this group of people (and potential average journey time savings and comfort improvements) is fairly small, this option is rated as ‘Low’ across all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city This option addresses demand management, providing users with information that may prompt some travellers to change their journey mode or time. Metric 2: Improvements in transport performance across the network to access central Melbourne Providing real time information during disruptions, allowing travellers to change their plans, could improve the measured performance of transport networks. If the option is effective at demand management, for example, peak spreading, it will also contribute against this metric.

Real time public transport information TNI Page 178 Supplement B – Options assessed (document 4 of 4)

Real time public transport information TNI Page 179 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is assumed to offer more accessible information than real time ICT information services currently available from private sector providers with high market share. Travellers are projected to use better information to choose their route and mode of travel, potentially resulting in less peak demand, mode shift, and reduced disruption on the network. This option will allow businesses and commuters to make better use of existing transport networks, and improve access to a range of services and community activities. As the option targets demand management, without improvements to public transport capacity or service levels, this option is not anticipated to result in large positive environmental impacts.

Real time public transport information TNI Page 180 Supplement B – Options assessed (document 4 of 4)

Transport network price regime TNP

Infrastructure Victoria’s Option Description Overall pricing review to manage demand for travel at peak/non-peak times across the entire transport network to achieve a number of objectives:

- most efficient use of assets - spread the peak/traffic volume - encourage public transport use (including optimising most affordable public transport: buses) - capture true cost of transport types, particularly private vehicle use - encourage less car use to the central city and major employment centres - incentivise heavy vehicle use of roads during determined times - reduce travel time and improve travel time reliability for private vehicles and freight. Pricing options could include fixed tolls on particular roads, satellite-enabled tolling, and variable tolls based on demand (e.g. peak-pricing). Sector Certainty of evidence Transport Medium Option type Evidence base Changing behaviour Liu, Y. and Charles, P., Spreading peak demand for urban rail transit through differential fare policy: A Location and spatial context review of empirical evidence (2013) Statewide Murray, P. Congestion pricing for roads: An This option could affect the transport network overview of current best practice, and the economic throughout the State. and transport benefits for government (2012) Smith, M., Public Transit and the Time-Based Fare Risks and Opportunities Structure: Examining the Merits of Peak Pricing for There is a risk is that community sees the option as Transit (2009) revenue raising rather than demand and usage KPMG, Arup & Jacobs, Transport modelling for management. Infrastructure Victoria (2016) This option could disproportionately affect low- SEIFA communities as they are more likely to be located further from the CBD and spend more time on roads (or be more likely to use freeways/motorways) or public transport. This would need to be taken into account during option implementation. Potential to drive cultural changes with school and work start and finish times, encouraging greater flexibility in the workplace. Also extensive list of opportunities to reduce congestion and travel times, improve cost recovery for roads and public transport services (mainly trains), encourage greater use of buses etc.

Transport network price regime TNP Page 181 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by a plus the annual recurrent costs incurred within the significant increase in road congestion leading to 30 year study period of this option is: community support for transport pricing. $1 million – $10 million In response this option would improve the utilisation of the transport system, by providing clear signals to Capital / implementation cost users of the costs of their decisions, assisting to $1 million – $10 million allocate network capacity to the highest value activities. Annual recurrent costs When could it be required? <$1 million Victoria may need this option to be implemented in: 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be implemented in: option? 1 – 5 years If this option were deferred congestion on the road network could worsen, increasing travel times and Operational life lowering productivity. The expected operational life of this option (from The risk to the State if this option is deferred is: opening) is: Medium 10 – 25 years Cost certainty The certainty of costing evidence is rated: Medium The Australian Automobile Association 2016-17 Pre-Budget Submission recommends that Infrastructure Australia lead a public inquiry into transport market reform and road user charging at a cost of $10 million over two years. An investigation undertaken by a similar body (e.g. Infrastructure Victoria) with a focus on Victoria's transport network is expected to cost 20-50 percent of this value over a two year period. Costing source The Australian Automobile Association, 2016-17 Pre-Budget Submission (2016)

Transport network price regime TNP Page 182 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne Overall, this option is expected to have significant impact on meeting the growing demand for access to the Melbourne CBD. The main effects of the TNP on commuters to the CBD will likely be to spread their demand for public transport and roads across the peak and into the off-peak time period. Most of the proposed measures are pricing or policy based rather than infrastructure based so can be implemented relatively quickly and contribution to the need within the next 5 years. As this option aims to change behaviours, it must be noted that this takes time and people's responsiveness to price changes is likely to be "sticky" i.e. they will not substitute from road to public transport (e.g. car to bus) immediately. Once behavioural change is achieved (expected to be after 5-10 years), contribution to needs will be more significant, mainly through increasing the accessibility of central Melbourne and reduced number of trucks and freight vehicles on the roads into central Melbourne during peak times. This option is assessed as having a ‘Moderate’ contribution in the 0-5 and 5-10 year time periods, with a rating of ‘Significant’ for all other periods. These ratings recognise that it will have a modest impact during the implementation phase, but the contribution should be more significant after this time. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city The introduction of peak and non-peak pricing for public transport and road users is aimed at managing demand for transport and roads, mainly to and from the CBD. Price changes are aimed at inducing behavioural changes such that commuters either travel earlier/later than normal, or encourage mode shift or mode sharing whereby more public transport is used, especially buses. Additionally, demand for transport by freight (trucks) would likely be better managed with specified travel times and restrictions during peak times. Metric 2: Improvements in transport performance across the network to access central Melbourne The price regime is aimed at reducing congestion in Melbourne during peak times such that transport infrastructure can perform better as it is under less stress. Incidents that may occur can be better managed and affect less people if congestion is reduced.

Need 11: Improve access to middle and outer metropolitan major employment centres This option is expected to have similar impacts as to those discussed under Need 10, albeit that the effects are anticipated to be more modest. It is expected that the effects are more moderate given middle and outer metropolitan areas are generally less congested than the CBD and roads and public transport into the CBD during peak times, so there is less scope for the TNP to have a significant effect. This option is assessed as having a ‘Moderate’ contribution to Need 11 in all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres There will be similar effects when compared to accessing the inner-city, although expect less impact on middle and outer metropolitan employment centres as congestion is currently not as bad to access these areas as it is for the CBD. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres Since congestion is less of an issue in these areas than much of the inner-city, the effect of this option on network-wide transport performance will be smaller than areas for closer to the central city.

Need 13: Improve the efficiency of freight supply chains This option is expected to have significant impact on improving efficiency of freight supply chains. The main effects of this option on truck freight across Melbourne during peak hours will likely be to spread use of roads across the peak and into the off-peak time period. Network pricing may enable freight operators more control to plan the timing of their runs according to urgency or service, improving resource use. If the option reduces congestion freight operators are likely to benefit through reduced vehicle running costs per trip and the potential to schedule more trips in a day, improving labour productivity.

Transport network price regime TNP Page 183 Supplement B – Options assessed (document 4 of 4)

This policy can be implemented relatively quickly and potentially have a moderate contribution to this need within the next 5-10 years if it leads to more efficient supply chains with lower costs (e.g. fuel) as less time is spent in congestion and traffic. Benefits are expected to increase over time as firms may need to adjust their supply chains and logistics plans to take full advantage of new pricing regimes. The most significant contributions to the need will come once firm supply chains and logistics are optimised with the new regime. This option is rated as ‘Moderate’ in years 0 –10 and ‘Significant’ from years 10 – 30. Metric 1: Reduction in cost of the total freight task (origin to destination) Cost of total freight task may be decreased if trucks and freight vehicles spend less time in congestion and traffic, and hence use less fuel. Although it is possible there may be an increase in inefficiencies and "dead weight loss" from excess capacity if trucks and freight vehicles are not able to drive during certain times. Eventually (5+ years after introduction of the option) firms may be able to alter their supply chains to suit the regulated times for transportation of freight such that the dead weight loss is minimized.

Transport network price regime TNP Page 184 Supplement B – Options assessed (document 4 of 4)

Transport network price regime TNP Page 185 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is likely to reduce congestion and pressures on roads and public transport by spreading demand across the peak and non-peak periods. It is likely to have positive environmental impacts from reduced pollution from less stop start mode driving in congestion, and some reduced demand for fuel if there is substitution away from private vehicle use due to the cost. Supply chain costs and disruptions are both likely to be reduced due to spread of demand. Social outcomes are expected to be largely neutral except the potential negative impact on low SEIFA communities who may have to travel further distances and the increase in cost of travel in peak is a higher proportion of total income than for a high-SEIFA index community.

Transport network price regime TNP Page 186 Supplement B – Options assessed (document 4 of 4)

Torquay rail extension TRE

Infrastructure Victoria’s Option Description Extend the regional passenger rail network to Torquay. The new rail line would extend to Torquay as a spur line off the Geelong-Warrnambool rail line between the existing Marshall and Waurn Ponds Stations. This extension will connect the growth areas around Armstrong Creek and Torquay with the regional city of Geelong and the central city in Melbourne. By constructing this rail extension it will be possible to reduce reliance on private vehicles in these new growth areas and enable more efficient access to jobs and services in Geelong and Melbourne. Sector Certainty of evidence Transport Low Option type Evidence base New or expanded assets Geelong Region Alliance, 'Regional Rail Connections' (2016) Location and spatial context Public Transport Victoria (PTV) website (2016) This option stretches from Waurn Ponds (south of Geelong) through to Torquay via Armstrong Creek. V/Line, 'Performance and capacity' (2016) Department of Environment, Land, Water & Risks and Opportunities Planning (DELWP), Victoria in Future 2015 and The staged approach may reduce the efficacy of Victorian Government unpublished population this option, as people may not use the transport projections (2015) connection if it is not as high quality as a heavy rail KMPG, Arup & Jacobs, Transport modelling for service. Infrastructure Victoria (2016) This creates the opportunity to further develop Armstrong Creek through to Torquay.

Torquay rail extension TRE Page 187 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the demand for public transport from Torquay to 30 year study period of this option is: Geelong and through to the city. $250 million – $500 million In response this option would increase the supply of public transport along the Surf Coast. Capital / implementation cost When could it be required? $250 million – $500 million Victoria may need this option to be implemented in: Annual recurrent costs 15 – 30 years (2031 – 2046) $1 million – $10 million What is the risk of deferring this option? Option lead time If this option were deferred it may limit the future If this option was committed to today, it could be development of these areas. implemented in: The risk to the State if this option is deferred is: 1 – 5 years Low Operational life The expected operational life of this option (from opening) is: >50 years Cost certainty The certainty of costing evidence is rated: Medium Costing assumptions for this option account for construction of road and rail grade separations and train stations (including capacity for car parking). Costing further assumes fully electrified single track is procured from Waurn Ponds Station to just north of existing Torquay. Annual recurrent cost has been calculated as $10 per train service kilometre, which is expected to cover most costs associated with running the service, such as power, wages, train stabling and maintenance. Services per day following the extension of approximately 12 kilometres has been estimated at 50 (25 in both directions), or annually at 18,250. Costing source Public Transport Victoria (PTV) website, Network Statistics (2016) Public Transport Victoria (PTV), Annual Report (2014/15)

Torquay rail extension TRE Page 188 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne Considering the distances involved and at a high level assessment, a single-seat service to the city from Torquay would take approximately one and a half hours. This is roughly equivalent to commuting from Seymour or Ballarat and significantly less time than from Bendigo and Traralgon, all of which are part of V/Line's commuter rail service. This demonstrates that this service could have potential as a commuter line as many Victorians make similar journeys to the city daily. Even with a staged approach (where a BRT or light rail service could be implemented), this would still remain a potential commutable journey to access jobs and education in Melbourne. The areas of Armstrong Creek and Torquay are both predicted to experience moderate growth over the next 30 years putting them in the top 20 areas of growth in Victoria, however much of this growth is forecast to occur in the longer term. This growth in population can be used as a proxy for public transport demand. However, considering the likely near term growth in the catchment area, and the number of people likely affected relative to other options to address Need 10, this option is considered to have a ‘Low’ rating. The option’s contribution is expected to increase over time as population in the catchment area grows. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city. This would increase the demand catchment for trips to the inner city as the Torquay / Armstrong creek catchment is a potentially commutable journey. Metric 2: Improvements in transport performance across the network to access central Melbourne More services would need to be provided along this corridor since Geelong trains are already nearing capacity during the peak periods.

Need 12: Improve access to jobs and services for people in regional and rural areas As these towns have the potential to become the future outer-suburbs of Geelong, there will need to be a high- quality public transport connection to improve the mobility of people living in these areas and reduce the reliance on private car travel. As Geelong's population grows, the number of jobs and services will also grow. This will mean access to this regional centre will become more vital in the future. There are a number of ways this access could be provided by public transport, for example, bus services. The ability of this option to provide and increase in service quality or capacity compared to existing bus services or the potential to improve bus services in the area is questionable. This option is considered to make a ‘Low ‘contribution to Need 12. The option’s contribution is expected to increase over time as population in the catchment area grows. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas This extension would allow the future population of Armstrong Creek and Torquay to access the jobs, service, education and social opportunities available in Geelong. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas This will increase the catchment of the regional rail network. Metric 3: Improvements in ICT connectivity in rural and regional areas This option does not impact ICT connectivity in rural and regional Victoria.

Torquay rail extension TRE Page 189 Supplement B – Options assessed (document 4 of 4)

Torquay rail extension TRE Page 190 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary As a new transport connection, this rail line will increase access to jobs, education, social and healthcare opportunities in Geelong and Melbourne. Due to the relatively low current population of these areas, this option is unlikely to have appreciable benefits. Potentially the option may have dis-benefits, as rail services need to meet a usage threshold to outperform other transport modes in terms of environmental benefits. As stated in the option description, a staged approach to this transport corridor may be a more viable approach to connect this area to the regional rail network. By 2046, the areas of Torquay and Armstrong Creek may have a large enough population to justify a heavy rail connection, however additional feasibility studies will need to be conducted.

Torquay rail extension TRE Page 191 Supplement B – Options assessed (document 4 of 4)

Transitional accommodation stock expansion TSA

Infrastructure Victoria’s Option Description Provision of supported short-term accommodation with access to support services intended as a stepping stone to more permanent housing. This accommodation is intended to be a temporary option with tenants actively working with their support provider to apply for long-term housing This option would include the provision of:

- two supported accommodation developments (see Common Ground) in metropolitan Melbourne of up to 70 units (predominantly studios with common areas). - 20 new community housing sector managed rooming house style accommodation providing up to eight beds per property - eight youth foyers (6 metro, 2 regional) to accommodate up to 40 young people in each facility. In 2012-13 Victorian Transitional Housing Managers had 166,525 contacts with households who were homeless or at risk of homelessness. Of those accessing homeless support services in Victoria in the 2013/14 financial year, nearly one third were turned away due to lack of accommodation. Twenty seven percent of people accessing homeless support services in the same year were already homeless (26,679 people), requiring an urgent accommodation response. The youth foyers are specifically recommended as between one half and one third of all young people exiting state care will experience homelessness in the first two years after leaving care. The cost estimates provided include the capital cost estimates for developing the facilities, along with the recurrent cost to manage the assets. The recurrent cost to provide the service is excluded from the WOL cost. Sector Certainty of evidence Health and human services Medium Option type Evidence base New or expanded assets Affordable Development Outcomes, Improving access to affordable housing for vulnerable Location and spatial context Victorians – advice to Infrastructure Victoria (2016) This option has a direct spatial context as the Baker, C, Niolon, P, & Oliphant, H, A descriptive accommodation will have a specific location, analysis of transitional housing programs for however the catchment area for the accommodation survivors of intimate partner violence in the United is expected to be large. States (2002) Risks and Opportunities Casey S, Snakes and Ladders: Women's pathways into and out of homelessness (2001) Without development of appropriate 'exit points' from transitional accommodation this option could Commonwealth Government, The Road Home: A be ineffective at contributing to the overall need of National Approach to Reducing Homelessness providing better access to housing for the most (2008) vulnerable Victorians. Fischer, R. L., Toward Self-Sufficiency: Evaluating a This option presents opportunities to explore a Transitional Housing Program for Homeless range of different transitional housing models Families. Policy Studies Journal (2000) across the state, including women only facilities, US Department of Housing and Urban Development scattered-site models or other kinds of targeted and US Department of Health and Human Services, facilities. Transitional housing and services: A synthesis. Practical lessons: The 1998 National Symposium on Homelessness Research (1999)

Transitional accommodation stock expansion TSA Page 192 Supplement B – Options assessed (document 4 of 4)

Washington T, The Homeless Need More Than Just What could influence this option? a Pillow, They Need a Pillar: An Evaluation of a Transitional Housing Program (2002) The need for this option could be influenced by documented shortfalls in the availability of crisis Direct option cost accommodation, and support services to assist those in crisis accommodation achieve access to The capital or implementation cost of the option, housing. plus the annual recurrent costs incurred within the 30 year study period of this option is: In response this option would increase the capacity of housing stock devoted to crisis accommodation, $100 million – $250 million and provide support services to those using the Capital / implementation cost capacity. $50 million – $100 million When could it be required? Victoria may need this option to be implemented in: Annual recurrent costs 0 – 5 years (2016 – 2021) <$1 million What is the risk of deferring this Option lead time option? If this option was committed to today, it could be If this option were deferred people would continue implemented in: to be turned away from transitional housing facilities, contributing to increased homelessness in 1 – 5 years Victoria. Homelessness has high costs in terms of Operational life the emotional wellbeing of those experiencing homelessness, social cohesion and demands on The expected operational life of this option (from other services (i.e. hospitals, justice) that could be opening) is: avoided/minimised through better transitional housing support. 10 – 25 years The risk to the State if this option is deferred is: Cost certainty High The certainty of costing evidence is rated: Low The capital cost estimate for this option is based on two projects: - The Elizabeth Street Common Ground supportive housing development opened in 2010 cost $46 million to build and provides 131 studio apartments over six floors for homeless and low-income earning Victorian's, and 30 two bedroom apartments for low- income families over three floor (Grocon 2010) - The Shepparton Youth Foyer will have 40 individual, self-contained units as well as extensive common area and support services. It will be developed at a cost of $7.5 million (MMG 2014). Annual recurrent costs are calculated at three percent of capital cost for maintenance and $2 million for staffing, administrative and other operational costs. Costing source Grocon website, Premier opens new Melbourne CBD affordable housing (2010) MMG website, Shepparton accommodation project to start this year (2014)

Transitional accommodation stock expansion TSA Page 193 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 7: Provide better access to housing for the most vulnerable Victorians The number of people being turned away from transitional housing services due to lack of capacity (Affordable Development Outcomes 2016) indicates that there may be a need for more transitional accommodation. Transitional accommodation and support services would support homeless Victorians, and Victorians at risk of homelessness, Demand for transitional housing is influenced by conditions in the housing market, and by individual circumstances. For example, reduction in affordable housing stock is likely to result in increased demand for transitional services, by increasing the number of Victorians unable to afford to remain in the private rental market. This option could therefore be strengthened by implementation in combination with other measures to address housing affordability. The accommodation and support detailed in this option may help Victorians struggling with housing access and affordability to avoid, or transition out of, homelessness. Events unrelated to market forces, such as marriage breakdown, domestic violence or mental illness could also result in demand for transitional housing. This option is anticipated to have a significant benefit in such instances, by providing both accommodation and support services to allow vulnerable Victorians to avoid, or transition out of, homelessness. This option receives a ‘Low’ contribution in the construction phase (0 – 5 years), however once the complete hard infrastructure (accommodation facilities) and soft infrastructure (support services) of this model are implemented (0 – 5 years) the contribution increases to ‘Significant’ up to years 15 – 30. Metric 1: Reduction in housing stress for lower income households in the rental market This metric is not directly applicable to this option. Metric 2: Reduction in average waiting time of people on the social housing register waitlist This metric is not directly applicable to this option. Metric 3: Ability to provide homeless people a pathway into housing This option aims to provide accommodation for people in transition, either from homelessness to permanent housing, or for people who can no longer afford private rental housing. As such, this option presents a direct path out of homelessness for people, particularly with the inclusion of proposed support services.

Transitional accommodation stock expansion TSA Page 194 Supplement B – Options assessed (document 4 of 4)

Transitional accommodation stock expansion TSA Page 195 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to benefit safety through expanding the supply of crisis accommodation, which is anticipated to allow Victorians to avoid, or reduce the duration of, an experience of homelessness. This is also expected to result in avoided State costs, by limiting adverse outcomes from homelessness such as increased hospital visitation or increased interaction with justice services. The option is also considered to improve the resilience of social services to address sever housing stress by expanding the capacity to provide crisis accommodation and transition services. Sub-sets of the community living in low socio-economic areas are likely to be more exposed to severe housing stress and so may be more likely than other groups to benefit from this option.

Transitional accommodation stock expansion TSA Page 196 Supplement B – Options assessed (document 4 of 4)

Train station car parking improvement TSC

Infrastructure Victoria’s Option Description Construction of new or expanded rail station car parks to increase capacity of park-and-ride facilities across the regional and metropolitan networks. Recently completed car park expansion projects include Syndal, South Morang and Donnybrook stations. The benefits include potential reductions to road congestion through mode shift to train services and improved access to the central city for employment and services. Works should be prioritised based on the potential demand considered in conjunction with the potential impacts. Car parking should be encouraged at stations adjacent to freeways or in growth areas with established car- oriented development patterns, but should be implemented with caution (and flexible design) in areas with the potential to develop into high-intensity activity nodes (i.e. so as not to hinder the objective of walkability). Flexible design standards can include (for surface carparks) using smaller (building-scale) footprints framed within a well- defined urban-scale street network, and (for multi-level parking) building any new structures to a high urban- design standard potentially capable of being built upon (or converted) for active uses. Examples of urban stations with high patronage and large numbers of people arriving at the station by car (increasing the likelihood of undesirable on-street parking) are:

- Footscray station (143 car parks with ~2,000 arrivals by car) - Laverton station (947 car parks with ~3,500 arrivals by car) - Dandenong station (414 car parks with ~2,200 arrivals by car). Sector There is the potential to examine additional commercial or redevelopment opportunities as the Transport car parks are developed. Option type This option could help ensure that expensive investments in rail infrastructure are highly utilised, New or expanded assets and may reduce the need for future road Location and spatial context investments. Statewide Certainty of evidence This option has the potential for Statewide High application, but is initially expected to focus on Evidence base urban areas. Department of Environment, Land, Water & Risks and Opportunities Planning (DELWP), Victoria in Future 2015 and Appropriate land may not be available at stations Victorian Government unpublished population with the highest demand for car parking. projections (2015) Alternatively, some sites could require significant Public Transport Victoria (PTV), Regional Railway land acquisition, increasing the estimated costs Station Car Park Audit DRAFT (October / substantially. November 2014), Additional car parking capacity may not meet Public Transport Victoria (PTV), Metropolitan demand, and so fail to resolve parking issues. Railway Station Car Park Audit DRAFT (October / Station car parks may also have the potential to November 2014) cause localised traffic bottlenecks, reducing amenity Victorian Auditor General’s Office (VAGO), for the community and residents. Coordinating Public Transport (2014) This option presents the opportunity to shift journey mode share towards train and away from cars. This option could provide improved access to the CBD and inner city areas for people in outer suburban areas and regional areas.

Train station car parking improvement TSC Page 197 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the population growth and rising demand at stations for 30 year study period of this option is: car parking and access to the rail system. $100 million – $250 million In response this option would improve utilisation of the rail network by commuters. Capital / implementation cost When could it be required? $100 million – $250 million Victoria may need this option to be implemented in: Annual recurrent costs 0 – 5 years (2016 – 2021) $1 million – $10 million What is the risk of deferring this option? Option lead time If this option were deferred, residents who rely on If this option was committed to today, it could be cars as a secondary mode to travel to and from implemented in: train stations would have less incentive and ability 1 – 5 years to switch to rail as a primary mode. Road congestion would be worse than if the option was Operational life implemented. The expected operational life of this option (from The risk to the State if this option is deferred is: opening) is: Low >50 years Cost certainty The certainty of costing evidence is rated: Low The Syndal Station Multi-Deck Carpark Project consisted provision of 250 car parks over a four level facility at a cost of $10.8 million, meaning the cost to build each inner/middle metropolitan urban car park was $43,200 on average (PTV 2016). South Morang's temporary gravel car park provided an additional 450 car parks at a cost of $1.25 million, meaning the cost to build each middle/outer metropolitan car park was approximately $2,800 (PTV 2016). Assuming that 10 inner/middle metropolitan urban car parks with 250 car parks and 10 middle/outer metropolitan car parks with 450 car parks are built throughout Infrastructure Victoria's 30 year strategy, and assuming that costs for Syndal and South Morang are appropriate, then total capital costs would total $120.5 million. Annual recurrent cost is assumed to be three percent to account for maintenance, operation and surveillance. This is higher than other heavy rail options because the capital is directly for a station (as opposed to rail) which, as a high traffic zone, would require a more frequent investment to maintain operation. Costing source Public Transport Victoria (PTV), Station Car Park Upgrades (website, accessed July 2016)

Train station car parking improvement TSC Page 198 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth This option has the potential to significantly improve access to rail passenger services for both regional and outer suburban residents. In particular, for those in high growth outer suburban LGAs, the addition of parking at stations will increase the ability of people to access the CBD and other inner city areas by rail, reducing travel times, costs and stress for those that would otherwise rely on private vehicles. This option is particularly relevant some fast growing outer suburban areas where stations may have minimal or insufficient parking. While an estimated 60 percent of regular parking is currently available for outer urban stations (PTV 2014), this will need to be addressed to account expected growth rates in LGAs such as Melton, Wyndham and Casey, all of which are some of the highest growth areas in Victoria. The scale of the benefits may be modest however, due to the scale of the proposed investment, and service frequency and quality of peak rail services to these areas. This option is expected to make a 'Low' contribution to Need 1 in all time periods due to the scale of the investment proposed. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option could enhance rail access for high growth areas in outer Melbourne and regional cities, where rail infrastructure exists or is planned for the future.

Need 10: Meet growing demand for access to economic activity in central Melbourne In 2008, it was found that parked cars at all train stations typically exceeded available space for parking by 50 percent, with the overflow parked in the surrounding areas (VAGO 2014). This option would therefore likely improve access to central Melbourne by increasing access to the train network with additional parking spaces. Additional car spaces may be needed to achieve additional access due to existing car-orientated development patterns, or the lack of connectivity between different public transport modes. This option is likely to improve service capacity, both as a result of improving commuter access to stations, and by reducing road traffic as a result of mode shift to rail. Positive outcomes as a result of this option include reduced traffic on the road network, cheaper and faster transport options for outer suburban residents, and an improvement in the mobility of workers in outer suburban areas, improving their incomes and productivity through being to access high value city-based employment. The scale of the benefits may be modest however, due to the scale of the proposed investment, and capacity constraints on many peak rail services. This option is expected to make a 'Low' contribution to Need 10 in all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city This option will enhance the capacity of the transport system to meet demand through the provision of car spaces. In particular, it will enable more commuters to use trains to reach the Melbourne CBD through encouraging mode shift to trains. Metric 2: Improvements in transport performance across the network to access central Melbourne This option should improve the performance of the road network, by reducing traffic owing from outer suburban areas to inner urban areas and the CBD as more people are able to switch from private vehicle to rail for journeys to work and other trips

Need 11: Improve access to middle and outer metropolitan major employment centres This option will provide some support for improved access to employment centres throughout metropolitan Melbourne. It is expected however, that most benefits will accrue to employment centres located on or near the rail network, including Sunshine, Dandenong South and Monash. This option may also have some benefits for greater transport efficiency by encouraging mode shift to rail from private vehicles, and reducing cars on the road for work and other trips. It is expected to largely benefit the employment zones located on or near the rail network.

Train station car parking improvement TSC Page 199 Supplement B – Options assessed (document 4 of 4)

This option is anticipated to have a ‘Very Low/ Negative’ contribution to Need 11 in all periods, given that some middle and outer employment centres are not located close to the rail network, and benefits may be limited to centres that are. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres This option could improve the supply of transport services to metropolitan employment centres. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres This option could improve service performance at stations where additional car parking is provided.

Train station car parking improvement TSC Page 200 Supplement B – Options assessed (document 4 of 4)

Train station car parking improvement TSC Page 201 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to improve access to public transport (heavy rail), and in doing so, encourage mode shift. In doing so, this option is anticipated to have benefits for access to jobs, and social infrastructure. However, based on the investment proposed, these benefits are not expected to be appreciable. Similarly, through encouraging mode shift, this option is likely to have positive but not appreciable impacts on greenhouse gas emissions, energy use and resource use.

Train station car parking improvement TSC Page 202 Supplement B – Options assessed (document 4 of 4)

‘TravelSmart’ programs TSP

Infrastructure Victoria’s Option Description Government to undertake ‘TravelSmart’ programs to encourage alternative travel options that can enable better use of our transport assets. Alternative travel options include walking, cycling and carpooling. Sector Certainty of evidence Transport Medium Option type Evidence base Better use Astle, R. and Simmons, G., The potential for carpooling as a more sustainable transport option, Location and spatial context Australasian Transport Research Forum (2010) Commonwealth Department of Environment and Heritage, Evaluation of Australian TravelSmart The option is likely to be most effective in middle and outer metropolitan Melbourne. projects in the ACT, South Australia, Queensland, Victoria and Western Australia 2001 – 2005 (2005) Risks and Opportunities Department of Transport, Planning and Local Increased flexibility in the workforce (for example Infrastructure, Plan Melbourne (2014) flexi-time and all roles flex programs) could reduce DeGruyter, C., Investigating a CBD-wide carpooling incentives to car pool. scheme for Melbourne, Australasian Transport Factors external to the option, such as petrol prices, Research Forum (2006) may increase the attractiveness of TravelSmart Harbutt, P. and Meiklejohn, D., the Development of programs and could be targeted in marketing to the Victorian TravelSmart Program, Australasian support the programs. Transport Research Forum (2003) This option could be combined with other options The Government of Western Australia Department that improve the size or quality of active transport of Transport, Evaluation Summary: TravelSmart networks to improve their effectiveness. Local Government program (2011)

‘TravelSmart’ programs TSP Page 203 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the desire to promote mode choice and increased 30 year study period of this option is: efficiency of personal car use to better achieve the potential of existing networks. $1 million – $10 million In response this option would attempt to induce Capital / implementation cost change in travel behaviours by promoting change. <$1 million When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: <$1 million 0 – 5 years (2016 – 2021) What is the risk of deferring this Option lead time option? If this option was committed to today, it could be Increasing demand for access to transport networks implemented in: could support the changes that the option seeks to 1 – 5 years achieve, for example, congestion on roads could encourage greater use of active transport. Operational life The risk to the State if this option is deferred is: The expected operational life of this option (from Low opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low The initial cost of establishing the body is expected to be below $1 million Western Australia's TravelSmart program has an estimated benefit-cost ratio of 2.5:1. With stated benefits of $1.6 million to the WA community and a financial return to the WA government of $0.86 million, annual cost is calculated around $1 million. The scope and scale of Western Australia's TravelSmart program has been applied to the costing of this option in Victoria. Costing source The Government of Western Australia Department of Transport, Evaluation Summary: TravelSmart Local Government program (2011)

‘TravelSmart’ programs TSP Page 204 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 10: Meet growing demand for access to economic activity in central Melbourne TravelSmart was a Victorian State Government program designed to change travel behaviour, targeting schools, workplaces and communities with the goal of reducing vehicle trips and vehicle kilometres travelled (Harbutt and Meiklejohn 2003). The program sought to change behaviour through direct contact with individuals to promote travel behaviour changes such as modifying trip destinations or active transport and carpooling (Harbutt and Meiklejohn 2003). The program included deep engagement with communities, schools and workplaces by TravelSmart teams to promote different travel choices (Harbutt and Meiklejohn 2003). In Western Australia, the TravelSmart program was implemented by local councils, and included development of infrastructure to enable behaviour change (The Government of Western Australia Department of Transport 2011). This program achieved a positive benefit cost ratio of 2.5:1, with benefits from reduced vehicle use and reduced congestion (The Government of Western Australia Department of Transport 2011). The results from TravelSmart projects across Australia during their measurement periods are mixed, but overall demonstrate a reduction in the use of passenger vehicles (Commonwealth Department of Environment and Heritage 2005). The TravelSmart programs were generally resource intensive and localised interventions. These programs have been mostly discontinued in favour of other initiatives. For access to the central Melbourne, barriers to active transport (walking or cycling) include access to infrastructure, perceptions of safety, trip length, travel time and after trip facilities (such as bicycle lockers, or showers). A TravelSmart style program may address perceptions of safety and increase community understanding of available infrastructure. However, this option does not address infrastructure availability (network and after trip facilities), trip length or travel time. Barriers to increased use of carpooling to access central Melbourne include convenience, the presence of non- car alternatives such as public transport, safety concerns and the ability of individuals to identify carpooling matches. Barriers to increased use of public transport include service availability, service quality and capacity, especially during peaks. The reintroduction of or use of programs similar to TravelSmart could address growing demand for access to central Melbourne through promoting mode shift to active transport, or increased carpooling. However, the potential for city-wide gains in the absence of additional investment in transport networks and supporting infrastructure may be limited. There may be a further need to coordinate TravelSmart style interventions in a catchment area or along a transport corridor to achieve benefits for access to the central city. The contribution of TravelSmart style programs to the need has been assessed as ‘Very Low/ Negative’ in all time periods, especially compared to other options to address Need 10. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city This option is anticipated to have the potential to make a small contribution to management of demand for passenger vehicle travel to the central city. Metric 2: Improvements in transport performance across the network to access central Melbourne Through encouraging mode shift, or more effective use of passenger vehicles, this option could improve transport performances.

Need 11: Improve access to middle and outer metropolitan major employment centres This option could encourage more effective use of passenger vehicles through carpooling, and encourage mode shift to active transport (for a description of former TravelSmart projects, refer to the related discussion under Need 10). The ability of this option to address the need for access to middle and outer metropolitan employment centres would likely vary by the centre. Where the trip length to employment centres is relatively short for employees, and active transport networks are present, mode shift to active transport could play a role in managing demand. This could be achieved through the option by promoting awareness of existing infrastructure and safety of use. The same principles apply to use of public transport. As discussed in Need 10, barriers of gaps in infrastructure, perceptions of safety, trip length, travel time and after trip facilities (such as bicycle lockers, or showers) may still prevent widespread uptake.

‘TravelSmart’ programs TSP Page 205 Supplement B – Options assessed (document 4 of 4)

Access to other centres may be best supported by road, and here, carpooling could play a role in managing demand for access. In comparison to access to the central city, issues with the availability or service quality of public transport may favour the use of carpooling to middle and outer metropolitan Melbourne. The option could influence the use of carpooling through raising awareness and assisting individuals to identify carpooling matches, for example, through supporting development of a car pooling app. For example, in an assessment of the suitability for carpooling, Melbourne’s outer suburbs such as Dandenong South, Campbellfield, Laverton North and Melbourne Airport were identified as areas with potential for mode shift (Astle and Simmons 2010). The authors identify areas based on existing high numbers of long distance single vehicle trips and minimal alternative transport options to passenger vehicles (Astle and Simmons 2010). The contribution of this option to the need is anticipated to be 'Low'. The contribution of this option is likely to increase as travel demand to these areas grows in line with their expansion. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres This option could support demand management for transport system capacity in terms of passenger vehicles. However, difficulty is anticipated in aligning trip origins and destinations. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres Through encouraging mode shift, or more effective use of passenger vehicles, this option could improve transport performances.

Need 12: Improve access to jobs and services for people in regional and rural areas Victoria’s regional and rural areas play an important role in the State’s economy, and are home to many Victorians. As in metropolitan Melbourne, the transport network includes roads, public transport and walking/cycling paths. Access to the transport network, and the ability of the transport network to meet the needs of regional and rural Victorians, may be reduced in comparison to Melbourne due to issues of coverage and services quality. TravelSmart programs are understood to promote greater use of active transport and carpooling (or a more detailed description of former TravelSmart projects, refer to the related discussion under Need 10). Barriers to active transport (walking or cycling) include access to infrastructure, perceptions of safety, trip length, travel time and after trip facilities (such as bicycle lockers, or showers). The option would address some of these barriers (safety, awareness of existing infrastructure), but does not have scope to address others. This option could improve transport access in regional and rural areas by encouraging more effective use of passenger vehicles (carpooling). Promoting mode shift to active transport options could also improve access if knowledge is identified as a barrier to their use. Barriers to increased use of carpooling include convenience, the presence of non-car alternatives such as public transport, safety concerns and the ability of individuals to identify carpooling matches. This option could address some of the issues of convenience by supporting communication tools to help match drivers to passengers, or ease communication between existing pairs. Other aspects that affect convenience, for example, alignment of trip origin and trip destination for driver and passenger, are not expected to be addressed by this option. Such convenience issues are anticipated to be more acute in regional and rural areas, although this could vary by trip purpose. In regional and rural areas, issues of trip length and travel time are likely to present larger barriers to the use of active transport than in metropolitan. The contribution of this option against Need 12 has been assessed as ‘Very Low/Negative’ across all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas This option could support demand management for transport system capacity in terms of passenger vehicles. However, difficulty is anticipated in aligning trip origins and destinations. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas

‘TravelSmart’ programs TSP Page 206 Supplement B – Options assessed (document 4 of 4)

This option could improve the performance of the transport network in terms of the effectiveness of passenger vehicles. As congestion is a smaller issue in regional and rural areas as compared to metropolitan Melbourne, benefits from increased use of active transport are not anticipated to be substantial. Metric 3: Improvements in ICT connectivity in rural and regional areas This option does not specifically address this metric.

‘TravelSmart’ programs TSP Page 207 Supplement B – Options assessed (document 4 of 4)

‘TravelSmart’ programs TSP Page 208 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option targets the efficiency of the transport networks that are used to access employment and social infrastructure. In doing so, the option is likely to have benefits for access. However, as the option is assumed to not involve changes to the road or active transport networks, these benefits are not considered likely to be appreciable. The option is assumed to have benefits for access to local trip destinations like social, sporting and recreational infrastructure.

‘TravelSmart’ programs TSP Page 209 Supplement B – Options assessed (document 4 of 4)

Tidal and wave energy TWE

Infrastructure Victoria’s Option Description Generating an energy supply from ocean resources (tides and waves). This option involves converting the energy in tidal movements and ocean waves or swells into electricity. Tidal energy and wave energy are fundamentally different technical solutions. Wave energy is still fairly novel whereas there are large scale tidal projects are being considered around the world, albeit at high cost. These include tidal barrages (effectively hydro projects) and sea bed tidal projects. Sector Certainty of evidence Energy Low Option type Evidence base New or expanded assets AGL Energy, Macarthur wind farm (website, accessed 2016) Location and spatial context Australian Renewable Energy Agency, Perth Wave Statewide Project (2012) This option would be implemented at a suitable Geoscience Australia, Ocean Energy (2009) location on the Victorian coastline, and would have (website, accessed 2016) Statewide impacts through the supply of electricity. International Renewable Energy Agency, Wave Risks and Opportunities energy: technology brief (2014) The technology used for this option is high cost and Yale Environment 360, Why Wave Power Has still in trial use only in many countries, so the Lagged Far Behind as Energy Source (2014) evidence to support its adoption is low. Depending on the technology used, there could be localised impacts on amenity. Geoscience Australia notes that for wave energy, “the lack of control over the timing, rate or level of delivery can impact significantly on their potential as an electricity source” (Geoscience Australia 2016) Tide and wave energy could be further developed to maximise the potential of the resource.

Tidal and wave energy TWE Page 210 Supplement B – Options assessed (document 4 of 4)

Direct option cost Ernst and Young, Cost and financial support for wave, tidal stream and tidal range generation in the The capital or implementation cost of the option, UK (2010) plus the annual recurrent costs incurred within the 30 year study period of this option is: International Renewable Energy Agency (IRENA), Wave Energy Technology Brief (2014a) $50 million – $100 million International Renewable Energy Agency (IRENA), Capital / implementation cost Tidal Energy Technology Brief (2014b) $50 million – $100 million Reserve Bank of Australia, Exchange Rates – Monthly – January 2010 to latest complete month of Annual recurrent costs current year (2016) Tidal Energy Today, ETRI Projections for tidal and <$1 million wave 2010-2050 (website accessed July 2016). Option lead time What could influence this option? If this option was committed to today, it could be The need for this option could be influenced by the implemented in: intention to invest in the development of new renewable technologies. 5 – 10 years In response this option would increase investment Operational life in the tidal and wave energy sector The expected operational life of this option (from When could it be required? opening) is: Victoria may need this option to be implemented in: 10 – 25 years 0 – 5 years (2016 – 2021) Cost certainty What is the risk of deferring this The certainty of costing evidence is rated: option? Low If this option were deferred, then more mature LCOE (Levelised Cost of Energy) reflects net generation technologies could be used to provide present investment, operations & management and electricity, including more developed renewable fuel costs incurred in the energy production process options. over the life of the project. To facilitate comparison between alternative options of varying scale, it is The risk to the State if this option is deferred is: "levelised" as $/MW.h (CSIRO 2015). Low Tidal current is estimated to have a LCOE of between $350 and $450 per MWh. Tidal Wave technology is still in its infancy, as such cost estimates are based on a delayed implementation of any projects till around 2030. Current LCOE ranges are in the range of $110 – $300 AUD (CSIRO 2015). Tidal wave costs, based off a 10MW demonstration project, are expected to range between 70 and 100 million dollars (Ernst and Young 2010, Reserve Bank of Australia 2016). Tidal barrages were assumed not to apply to Victoria, due to lack of appropriate sites. Costing source Asia Pacific Economic Cooperation (APEC), Marine & Ocean Energy Development: An Introduction for Practitioners in APEC Economies (2013) CSIRO, Unlocking Australia’s Energy Potential (2015)

Tidal and wave energy TWE Page 211 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 18: Transition to low carbon energy supply and use Victoria’s energy supply is currently dominated by fossil fuel generation, in particular, emissions intensive brown coal. Infrastructure Victoria has identified the need to transition away from these sources to lower carbon energy supply, in response to the challenges of climate change. This option would support the need by developing an alternative, low emissions, form of energy supply from tidal or wave energy. Assessments of tidal energy resources by Geoscience Australia suggest that there is some potential from sites in Bass Strait, although the resources in Western Australia, Queensland and the Northern Territory are considered stronger (Geoscience Australia 2016). Assessments of wave energy resources by Geoscience Australia identify shelf waters off Victoria as suitable sites for harvesting wave energy. A wave energy generation facility has been completed in Perth and connected to the electricity supply network. At the time (2015), this was the first commercial use of the technology. The development will ultimately have three megawatts of capacity, sufficient to power 1,500 to 2,000 households. By contrast, the largest windfarm in Australia has 420 megawatts of capacity, sufficient to power 220,000 households (AGL Energy 2016). Tidal and wave energy is considered to be further away from commercial use than other forms such as wind and solar (Yale 360 2014). The option is considered likely to make a ‘Low’ contribution to the need, due to the uncertainty of the technology and the likely cost of implementation. This option’s contribution to the need is considered stable in all time periods. Metric 1: Reduction in Victoria's greenhouse gas emissions This option could reduce greenhouse gas emissions by displacing existing fossil fuel generation, however, there are technological and cost challenges to implementing the option at a scale likely to have an impact.

Tidal and wave energy TWE Page 212 Supplement B – Options assessed (document 4 of 4)

Tidal and wave energy TWE Page 213 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option supports investment in what is currently a very high cost form of renewable energy. The option does not specify how much energy would be generated from tidal sources, however assuming a supply of 10 MW the impacts of this option are likely to be limited. The option is likely to have marginal benefits to greenhouse gas emissions, resource use and energy use by expanding the supply of renewable energy in Victoria. The option would likely reduce reliance on fossil fuel generation. Water use and water air and waste pollution would likely also benefit. There could be localised impacts on visual amenity associated with this option. Implemented at such as small scale, this option may have limited negative impacts on business costs, gross state product and the community through increasing the use of high cost generation sources.

Tidal and wave energy TWE Page 214 Supplement B – Options assessed (document 4 of 4)

Compact urban development UDC

Infrastructure Victoria’s Option Description This option is to apply planning zones that enable residential intensification on land near existing infrastructure, such as public transport along the Principal Public Transport Network and activity centres, in Melbourne and specific regional cities, for example Geelong, Bendigo and Ballarat. In particular the intensification should be prioritised around transport infrastructure that has capacity for additional demand. This should involve:

- determining criteria to apply higher density zoning provisions in walkable proximity to stations and services, in consultation with Local Government. - reviewing the existing planning controls to reduce barriers to densification in well serviced areas. - a consistent application of zones across Melbourne and the Regional Centres to maximise access to existing infrastructure (outside of areas with protected heritage or environmental values). Overtime, local infrastructure upgrades and renewal may be required to accommodate additional growth. Sector Certainty of evidence Transport Medium Option type Evidence base Better use SGS, Comparative costs of urban development: a literature review (2016) Location and spatial context KPMG, Economic Appraisal and Demand Modelling Statewide 2016) This option has spatial application to regional centres that lend themselves to infill development, as well as areas of metropolitan Melbourne, particularly along those train lines stated in the option description. Risks and Opportunities Infill development can meet with community resistance, particularly in established suburbs, and needs to be undertaken with sensitivity to the surroundings. The option presents an opportunity for more people to live closer to jobs and infrastructure and for government to make significant budget savings from leveraging existing infrastructure.

Compact urban development UDC Page 215 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the pressure for housing and growth in metropolitan 30 year study period of this option is: Melbourne and regional centres. $10 million – $25 million In response this option would increase the supply of housing in areas that have infrastructure capacity to Capital / implementation cost absorb more growth. $1 million – $10 million When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: <$1 million 0 – 5 years (2016 – 2021) What is the risk of deferring this Option lead time option? If this option was committed to today, it could be If this option were deferred Melbourne will continue implemented in: to sprawl with cost implications for providing 1 – 5 years infrastructure. SGS (2016) literature review found that providing infrastructure in greenfield areas cost Operational life 2-4 times more than in already established areas depending on the capacity of existing infrastructure The expected operational life of this option (from to support additional people. opening) is: The risk to the State if this option is deferred is: 10 – 25 years High Cost certainty The certainty of costing evidence is rated: Low This option is considered to include a medium size strategy (including reviewing the existing planning controls with a view to reducing barriers to densification along transport rich corridors) and policy development component that, from the State Government, would involve preparation of policy and associated documentation, public and key stakeholder consultation, review and response to public submissions, and preparation of final policy documentation. It is expected that the implementation of this policy would be undertaken by State and local governments for a period between 10-25 years, and that the strategy would require regular review to respond to changed market conditions. Costing source Stakeholder consultation

Compact urban development UDC Page 216 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth This option would assist to direct a proportion of growth to established areas that have the capacity to absorb additional growth. This includes areas along train lines that have capacity for additional passengers. A literature review has found that development for an additional 25,000 residents could be between two to four times more expensive in greenfield areas compared to infill development, depending on the capacity of existing infrastructure to support additional people (SGS Economics and Planning 2016). The increased costs occur as access to services for infill development is more likely to be able to be accommodated by existing infrastructure. This option would contribute to addressing infrastructure demands in areas with high population growth by directing growth into areas that can more readily accommodate development. This option is assessed as having a ‘Moderate’ contribution to Need 1 in all time periods. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option has the potential to indirectly improve access or increase service capacity within high growth LGAs by directing growth to areas where access can be better provided through existing infrastructure.

Need 10: Meet growing demand for access to economic activity in central Melbourne This option will moderately benefit demand for access to economic activity in central Melbourne, by encouraging denser future growth along train lines and activity centres that have capacity to accommodate future demand. This option is assessed as having a ‘Moderate’ contribution to Need 10 in all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city Given that the population of Melbourne is growing, by directing growth along train lines that have capacity to absorb additional demand, and thereby direct growth away from lines that do not, this option will make a moderate contribution. Metric 2: Improvements in transport performance across the network to access central Melbourne This option, being a land use option will not by itself improve transport performance across the network to access central Melbourne. It would need to be paired with transport options to have an integrated impact.

Need 11: Improve access to middle and outer metropolitan major employment centres This option could moderately benefit demand for access to middle and outer metropolitan employment centres, by encouraging denser future growth along train lines and activity centres that have capacity to accommodate further demand. The contribution of this option to Need 11 may be limited by the strength of transport links to middle and outer metropolitan major employment centres. The contribution of this option to Need 11 has been assessed as ‘Moderate’ in all time periods. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres This option will not increase supply or increase the transport system capacity. It will assist in coordinating development with where there is existing capacity along the transport network, and in that sense, manage demand. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres This option, being a land use option will not by itself improve transport performance across the network to access middle and outer metropolitan major employment centres.

Compact urban development UDC Page 217 Supplement B – Options assessed (document 4 of 4)

Compact urban development UDC Page 218 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option would moderately benefit number of households with a journey to work of greater than 45 minutes through densification of housing developments along train lines. It is anticipated that there would be moderate benefits in terms of costs incurred by the State as utilising infill areas is indicated as being 2-4 times cheaper than providing a similar amount of infrastructure to greenfield development, where existing infrastructure has the capacity to support increased demand (SGS, 2016). This will also have a moderate benefit for housing supply. Urban density can also have moderate community health benefits by encouraging active travel such as walking and cycling as different uses are close to each other. Directing population growth to areas where current infrastructure will adequately meet needs of same growth will reduce requirement to procure new infrastructure in growth areas. This is assumed to result in comparative reduction of resources required against base case and will have a number of environmental benefits.

Compact urban development UDC Page 219 Supplement B – Options assessed (document 4 of 4)

Green Infrastructure UFF

Infrastructure Victoria’s Option Description This option seeks to deliver a governance mechanism and policy framework to deliver and improve green infrastructure across Victoria’s urban and regional cities and towns in partnership with local government and the private sector. The Australian Standard describes green Infrastructure as ‘The network of natural and built landscape assets, including green spaces and water systems within and between settlements. Individual components of this environmental network, such as gardens, parks, recreation areas, highway verges and waterways, are sometimes referred to as ‘green infrastructure assets’. The benefits of this infrastructure include:

- Creating space for activity to address obesity and diabetes rates, reduced fitness particularly in young children - Creating space to address social exclusion noting the aging population and the increasing importance of positive mental health - Opportunities for walking and cycling for transport - Providing shade to mitigate the heat island effect to address the challenges of climate change and heat related death - Protecting and enhancing natural environments and support biodiversity by providing the critical connections within and between ecosystems - Reducing emissions and addressing air quality, including acting as a carbon sink - Providing a more efficient and effective means of managing stormwater to protect against flooding - Delivering energy savings through natural temperature regulation Because of the multiplicity of benefits, there is no clear ownership for this infrastructure, and despite the efforts of local government to focus on this, the delivery of green infrastructure can often be ad hoc and opportunistic rather than strategic and holistic. Sector Certainty of evidence Science, agriculture and environment High Option type Evidence base Better use Bowen, K. J., and Parry. M., The evidence base for linkages between green infrastructure, public health Location and spatial context and economic benefit (2015) Melbourne and regional cities City of Melbourne, Urban Forest Strategy (2014) This option is applicable to all built environments City of Melbourne, Resilient Melbourne Strategy across the State. (2016) Greening the West website (accessed July 2016) Risks and Opportunities Standards Australia, Australian Standard 5334- Evaluation and monitoring of funded projects could 2013: Climate change adaptation for settlements be needed to manage benefits. and infrastructure – A risk based approach (2013) This option presents significant opportunities to Victorian Centre for Climate Change Adaptation reduce the heat island effect and health issues Research, Urban Heat Reduction through Green associated with it. Infrastructure (GI): Policy Guidance for State Government (2015)

Green Infrastructure UFF Page 220 Supplement B – Options assessed (document 4 of 4)

Ellaway et al, ‘Graffiti, Greenery, and Obesity in - $50 million for other categories of project, such Adults: Secondary Analysis of European Cross as land remediation, fencing and asset Sectional Survey’, British Medical Journal (2005) removal Direct option cost - $50 million for pathway delivery, appropriate seating and supportive infrastructure. The capital or implementation cost of the option, plus the annual recurrent costs incurred within the Annual recurrent costs would involve ongoing 30 year study period of this option is: monitoring of programme outcomes, and upkeep of green infrastructure. These costs are expected to $250 million – $500 million be absorbed by existing State Government and Capital / implementation cost participant resources. $250 million – $500 million Costing source National Landcare Programme, 20 Million Trees Annual recurrent costs Programme, (website, accessed July 2016) <$1 million City of Melbourne, Urban Forest Strategy: Making a Great City Greener 2012-2032 (2012) Option lead time Stakeholder consultation If this option was committed to today, it could be What could influence this option? implemented in: The need for this option could be influenced by 1 – 5 years increasing stresses on the urban tree canopy and Operational life the prevalence of urban heat island effects and associated issues. The expected operational life of this option (from In response this option would increase the opening) is: resilience of urban biodiversity and the urban area 10 – 25 years through cooling effects. Cost certainty When could it be required? The certainty of costing evidence is rated: Victoria may need this option to be implemented in: Low 0 – 5 years (2016 – 2021) This option supports expanded investment in green What is the risk of deferring this infrastructure. This option is assumed to function in option? a similar way to the Commonwealth 20 Million Trees Programme, which will allocate $70 million If this option were deferred Melbourne and other dollars of funding over six years through competitive urban areas may experience high levels of tree loss grants to individuals and organisations, including in the following 30 year period. These areas will the private sector (National Landcare Programme also be further exposed to urban heating along with 2016). It has been assumed that local government associated health and economic issues. is eligible for grants under this option. The risk to the State if this option is deferred is: To implement the option, it is considered likely that policy development would be needed to establish High criteria for funding grants, and that resources would need to be allocated within State Government to running a grants process, evaluating submissions and monitoring outcomes. Much of the policy drafting would involve spatial analysis to determine areas where green space is ageing and/or lacking. The City of Melbourne's Urban Forest Strategy provides a good benchmark for how this study could be conducted. An implementation cost for expansion of green infrastructure is assumed to include the following:

- $100 million for supporting Land acquisition - $70 million for tree planting

Green Infrastructure UFF Page 221 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth As detailed in the related discussion under Need 4 and 16, access to green spaces and greenery has physical and mental health benefits (Beyond Blue and Deakin University, 2010) and the construction of green infrastructure is likely to have environmental benefits. To the extent that Melbourne’s high growth LGAs have a relative lack of green infrastructure, this option is likely to benefit the community and environment. It is considered likely that funding provided by this option will be targeted to areas with a relative deficit of green infrastructure, and that councils in high growth areas, as well as other organisations, would be able to apply for funds. The existing amount of green infrastructure is expected to vary by high growth LGA however. This option is considered likely to have a ‘Moderate’ contribution against Need 1. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option could improve access to green infrastructure in high growth LGAs with a relative undersupply of green infrastructure by increasing the funding pool for programs.

Need 4: Enable physical activity and participation Evidence demonstrates that access to green spaces and greenery has physical and mental health benefits (Beyond Blue and Deakin University, 2010). Areas that lack green spaces often have higher rates of people who do not exercise regularly and higher rates of associated health problems (Ellaway et al, 2005). Through funding a range of initiatives, this option has the potential to enhance both reserves and parklands but also streetscapes that create amenity and encourage physical activity such as biking, running, walking, community events, and gatherings. This option is assessed as having a contribution of ‘Moderate’ to the need in all time periods, Metric 1: Increase in access to infrastructure to encourage physical activity This option would increase access to green spaces and revitalise existing infrastructure such as streets and buildings and by doing so activate areas that encourage people to be there whether for physical exercise or other activities. Therefore this option would make a moderate contribution. Metric 2: Increase in physical participation rate This option would improve amenity of spaces that may encourage people to be active, but will not necessarily increase physical participation rates, particularly if not accompanied by programs and other initiatives. A study (Mourato et al. 2010 in Bowen and Parry, 2015) undertaken in the UK found that an increase in green space attributed to a 1 percent increase in physical participation rates which had economic benefits of 2 billion pounds per year. This economic benefit was most notably attributed to the health of elderly persons, which suggests that given an ageing population, greening of spaces may have the most impact on activity levels of the elderly. Overall green infrastructure makes a low contribution to increasing physical participation rates.

Need 16: Help preserve natural environments and minimise biodiversity loss Green infrastructure can significantly contribute to improving urban biodiversity and natural environments. Local government areas in Melbourne are among those with the lowest urban tree canopy ratios in Australia (City of Melbourne, 2016). The lack of species diversity is another pressing concern. For example 35 percent of trees in the City of Melbourne are comprised of just three species (City of Melbourne, 2015), while 44 percent of total trees in the City of Melbourne are anticipated to be lost in the next 20 years. Lack of species diversity, ageing of trees, the stresses of climate change and population growth, impermeable surfaces, pests and diseases weaken urban biodiversity and environments. Greening in private spaces is also reducing due to expansion of building footprints. Existing initiatives to improve green infrastructure include: guidelines, projects and forums. Extending the urban forest initiative commenced by the City of Melbourne to the broader metropolitan Melbourne is a key action under the Resilient Melbourne Strategy (2016). At present, initiatives are currently undertaken by a range of organisations including local councils, Parks Victoria, DELWP, water authorities, community groups and regional partnering groups such as Greening the West. This option would support these activities by increasing available funding. Green Infrastructure UFF Page 222 Supplement B – Options assessed (document 4 of 4)

This option is expected to provide a ‘Moderate’ contribution across all time periods. The contribution to this need will become more pertinent over time as areas loose trees, and stresses increase due to climate change, building and density pressures. Metric 1: Increase in the volume and improve the quality of Victoria’s natural habitat areas This option would significantly increase the volume of Melbourne metropolitan and regional centres preserved natural habitat by firstly addressing the decline of biodiversity and tree canopy in Melbourne and regional centres. As a proportion of Victoria’s overall habitat coverage and quality, that in Melbourne and regional centres may be proportionally smaller. This option would significantly improve the quality of natural habitat areas through encouraging scaling-up and knowledge sharing of existing initiatives such the City of Melbourne’s urban forest strategy which aims to diversify species, reduce canopy loss and increase the resilience of habitats to stresses. Metric 2: Reduction in indigenous biodiversity losses This option has the potential to reduce loss and increase indigenous biodiversity, particularly as stresses such as drought, heat waves, pests and diseases pose risks. Encouraging knowledge sharing of indigenous species, including increasing species diversity would significantly contribute to meeting this metric.

Need 17: Improve the health of waterways and coastal areas Increasing green infrastructure (specifically tree canopies) can have benefits to the health of waterways by reducing water and nutrient flows into stormwater (City of Melbourne 2014). Trees mitigate the effect of heavy rainfalls, and can absorb chemicals like nitrogen, phosphorus and heavy metal content through their root system (City of Melbourne 2014). Through implementation of this option there could be the opportunity to fund wetlands, rain gardens and green roofs, which are also anticipated to benefit stormwater flows (City of Melbourne 2014). This option is assessed as having a ‘Moderate’ contribution in all time periods. Metric 1: Increase of waterways in good or excellent condition This option could mitigate the impacts of stormwater flows that affect waterway health. In addition, expansion to the urban tree canopy, and other interventions, could reduce the amount of pollution washed into waterways during stormwater runoff events. Metric 2: Improvements in coastal water quality This option could reduce the impacts of pollution from stormwater, and improve the health of waterways, contributing to improvements also in coastal water quality.

Green Infrastructure UFF Page 223 Supplement B – Options assessed (document 4 of 4)

Green Infrastructure UFF Page 224 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Green infrastructure will have highly beneficial impacts upon environmental and social factors. This option is anticipated to have beneficial impacts on improving amenity and increasing the quality of habitats and ecosystems through street planting, green walls and roofs and connected green corridors. This option is anticipated to also have beneficial impacts for improved water use in parks such as natural filtering and storage system at Trin Warren Tam-boore in Royal Park. Benefits apply to all including mental and physical health benefits. Lower socio-economic neighbourhoods tend to have fewer facilities for outdoor physical activity and fewer natural elements (Beyond Blue, 2010) and therefore this option is anticipated to benefit these neighbourhoods. Reducing the urban heating during heat waves is also anticipated to reduce associated health costs on the state.

Green Infrastructure UFF Page 225 Supplement B – Options assessed (document 4 of 4)

Urban planning and approvals processes for health facilities UPA

Infrastructure Victoria’s Option Description Many health services are delivered by the not-for-profit and private sector providing their own infrastructure. The provision of aged care services in particular are largely undertaken by the not-for-profit and growing private sector market. At present the sustainability of the aged care sector relies on the continued investment by these parties, which is largely constrained by the Commonwealth’s bed licensing arrangements. Current planning requirements impact the availability of land suitable for development in metropolitan Melbourne and often result in a long approvals process. This also impacts the appetite for continued private sector development. The private and not-for-profit sector has indicated sufficient access to capital to meet this need. This option proposes to change the regulatory planning process to fast track the development approvals process for health facilities. Sector Certainty of evidence Health and human services Low Option type Evidence base Changing behaviour State Government of Victoria, Plan Melbourne Refresh: Discussion Paper (2015) Location and spatial context State Government of Victoria, Plan Melbourne This option affects the development approvals (2014) process statewide. Department of Health and Human Services, Health Risks and Opportunities 2040: A discussion paper on the future of healthcare in Victoria (2015) A fast track development approvals process such as VicSmart may lead to low quality design Department of Environment, Land, Water & outcomes due to lack of scrutiny, development in Planning (DELWP), Victoria in Future 2015 and the wrong areas and increased community Victorian Government unpublished population opposition if third party appeal rights are removed. projections (2015) A fast track development approvals process such Property Council of Australia, Development as VicSmart may lower the barriers to entry to Assessment: 2015 Report Card (2015) health facility market enticing more entrants. This RPS Australia, The 5A’s of Retirement Living – may increase the provision of health facilities to towards proactive planning policy (2015) meet the growing demand.

Urban planning and approvals processes for health facilities UPA Page 226 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the increasing demand for health facilities driven by an 30 year study period of this option is: increase in the ageing population. $1 million – $10 million In response this option would increase the supply of health facilities by encouraging investment in the Capital / implementation cost industry. $1 million – $10 million When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $1 million – $10 million 0 – 5 years (2016 – 2021) What is the risk of deferring this Option lead time option? If this option was committed to today, it could be If this option were deferred the provision of health implemented in: facilities may be reduced as they may not present <1 year the best investment option when compared to alternatives such as residential dwellings. Operational life The risk to the State if this option is deferred is: The expected operational life of this option (from Low opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low This is considered a large size regulatory option that would involve initial policy drafting, consultation with key stakeholders, and final policy implementation. This process is expected to involve public servants and private sector consultants. The recurrent cost assumes that the cost of managing the policy addition is absorbed by existing LGA capacity. Costing source Consultant assumptions

Urban planning and approvals processes for health facilities UPA Page 227 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 3: Respond to increasing pressures on health infrastructure, particularly due to ageing The proportion of people aged over 65 in Victoria is forecast to increase and the number of people in this age bracket likely to almost triple from 2011 to 2051. Into the future there will be an increasing need for health facilities to cater for the growing ageing population (Department of Environment, Land, Water & Planning 2015). The definition of residential aged care facility under the Victorian Planning Provisions is: accommodation and personal or nursing care for the aged. Aged care facilities may also include health or other facilities for the residents. The Victorian planning approvals system currently includes specific provisions that exempt residential aged care facilities from planning approval requirements on appropriately zoned land. Therefore, depending on whether the health facility forms part of an aged care facility, in certain locations, planning approval made not be required for health facilities. A protracted and complex planning approvals process adds to the cost and creates uncertainty for developers looking to invest in health facilities, this may discourage provision of health facilities. By making the planning approvals process for health facilities quicker and easier, evidence suggests that it may make health facilities a more attractive investment option (Property Council of Australia 2015). Some potential options for streamlining the planning approvals process include: review planning controls to potentially exempt health facilities from planning permit requirements in appropriate zones or designated areas. Remove the need for public advertising or third party appeal rights for health facility applications. Fast track the planning permit approvals process for health facilities through a code based system such as VicSmart (RPS Australia 2015). VicSmart has been implemented to expand the range of developments that are code assessable. Small scale routine developments that qualify for VicSmart gain the benefit for a 10 day permit turnaround. VicSmart provides a framework which could be expanded to provide code based assessment for other development types such as health facilities (Property Council of Australia 2015). These options may make health facilities more attractive investments options for developers increasing investment in the sector. This may lead to an increase in the capacity of health facilities, reducing pressures on existing health infrastructure. This option receives a ‘Low’ rating against Need 3 over all time periods, as the speed of the development approvals process is not the only limitation on the provision of health facilities. The planning system in Victoria is currently undergoing reform and the State Government is looking at streamlining the development approvals process. While this is rated as a low contribution, this is potentially a low cost option which could be included in current or future planning reform. Metric 1: Improvements in access to health services This option may encourage increased provision of health facilities due to potential reduced cost and time of the development process. Metric 2: Increase in efficiency of health services This option may reduce the lead time and cost of delivering new health facilities by shortening the development process and reducing the holding cost of land.

Urban planning and approvals processes for health facilities UPA Page 228 Supplement B – Options assessed (document 4 of 4)

Urban planning and approvals processes for health facilities UPA Page 229 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is targeted at increasing the supply of health services for aged care. The option is assumed to enable increased investment in the aged care sector, improving access to health and health and safety outcomes by providing appropriated care for the aging population. This option is also anticipated to result in avoided state costs. By creating incentives for the private sector to provide aged care services, this option may relieve pressure on state funded health services such as hospitals.

Urban planning and approvals processes for health facilities UPA Page 230 Supplement B – Options assessed (document 4 of 4)

Victorian data analytics centre VDA

Infrastructure Victoria’s Option Description Strengthen the data analytics capability of the recently announced Victorian data agency. This agency would then identify and develop the processes needed (e.g. algorithms/software) to make big data usable for operational management platforms and for planning purposes, including performance reporting. For example, it would apply advanced and predictive analytics to transport data (including from fixed public assets and probe data from vehicles) to enable real time, dynamic, centralised management of the transport system, particularly for the road network and on-road public transport, with the object of optimising transport system capacity and improving travel time reliability. Sector Evidence base ICT McKinsey, Big data versus big congestion: using information to improve transport (2015) Option type NSW Government, NSW ICT Strategy Priorities: Better use Data Sharing and Analytics (website accessed July 2016) Location and spatial context Productivity Commission, Data Availability and Use This option could have Statewide impacts through Issues Paper (2016) influence on Government policy and service delivery Productivity Commission, Inquiry Report Public Infrastructure Volume 1 (2014) Risks and Opportunities PTV Compass Blog, How real-time data helps Barriers may exist if access to data is restricted or it optimize traffic and transport and improve utilization contains confidential information that carries privacy of infrastructure (2014) concerns. PTV Compass Blog, How real-time data helps Using real-time data allows planners to provide optimize traffic and transport and improve utilization precise forecasts on the current situation in the of infrastructure (2014) specific area where people and goods are on the move. Traffic management can respond to bottlenecks in real time using vehicle density data and charging for access to additional lanes. Adjusting speed limits in hazardous conditions can reduce accident rates. Adjusting traffic lights to create a 'green wave’: allowing vehicles to move across several intersections without stopping reduces congestion, fuel waste, and delays. Changing the traffic signal system: using real-time data, signals on major roadways can automatically retime and coordinate themselves to the most efficient interval for the current traffic density. Transit operators can track and manage their vehicle fleets using fleet tracking systems and real- time passenger usage data. Road safety can be improved with up-to-date information that identifies potential conflicts between cyclists and heavy vehicle traffic. Parking in urban areas can be improved with apps that help car and truck drivers to find vacant parking spaces. In urban transport, real-time data can optimise usage by sharing loads and vehicles. Certainty of evidence Medium Victorian data analytics centre VDA Page 231 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the demand for efficiency improvements in the existing 30 year study period of this option is: transport infrastructure. $100 million – $250 million In response this option would improve the performance and utilisation of the current transport Capital / implementation cost infrastructure. <$1 million When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $1 million – $10 million 0 – 5 years (2016 – 2021) What is the risk of deferring this Option lead time option? If this option was committed to today, it could be If this option were deferred the cost of congestion implemented in: and transport delays will grow and the advantage of 1 – 5 years greater efficiency in the transport network will be forgone. More pressure may be placed on the Operational life existing infrastructure as a result and may require additional investments to expand the current The expected operational life of this option (from transport infrastructure. opening) is: The risk to the State if this option is deferred is: 5 – 10 years High Cost certainty The certainty of costing evidence is rated: Medium The capital cost estimate assumes that an existing building is repurposed, as opposed to constructed from the ground up. The capital cost is, therefore, limited to hardware purchases and building fit out, beyond what has currently been committed to for the recently announced Victorian data agency. The annual recurrent cost is based on that of a New South Wales data analytics centre, where operating expenses totalled $16.8 million over four years. Costing source New South Wales Department of Treasury, NSW Budget 2016-17 (2016)

Victorian data analytics centre VDA Page 232 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth Better use of big data by Government is anticipated to benefit policy making and planning, service provision, accountability and performance reporting. The big data itself is expected to be a mix of government data sets and publically available information, to be analysed by the Victorian Data Agency to provide useful information to government stakeholders and Victorians. The NSW Government has established a Data Analytics Centre, which provides an indication of the range of activities that could be supported by this option. The NSW Data Analytics Centre aims to support better design and delivery of services, as well as help grow the digital economy through open data (NSW Government 2016). Priority initiatives include Services NSW, an initiative to simplify citizen access to government service and Open Government Data (NSW Government 2016). Areas of high population growth face a variety of infrastructure challenges, including the effective investment in transport system capacity, matching access to health and education services with population growth, amongst others. For growth areas specifically, it is likely that better use of big data could benefit the planning of services and infrastructure. Increased use of data could help planners and policy makers identify the most efficient interventions to expand services in high growth LGA to accommodate population increases. This option has been assessed as having a ‘Moderate’ contribution against Need 1. The option’s contribution is considered to occur through enabling better responses to infrastructure demands, not responding directly, so a rating of ‘Significant’ was not assigned. The NSW Government has established a Data Analytics Centre, which provides an indication of the range of activities that could be supported by this option. The NSW Data Analytics Centre aims to support better design and delivery of services, as well as help grow the digital economy through open data (NSW Government 2016). Priority initiatives include Services NSW, an initiative to simplify citizen access to government service and Open Government Data (NSW Government 2016). Areas of high population growth face a variety of infrastructure challenges, including the effective investment in transport system capacity, matching access to health and education services with population growth, amongst others. For growth areas specifically, it is likely that better use of big data could benefit the planning of services and infrastructure. Increased use of data could help planners and policy makers identify the most efficient interventions to expand services in high growth LGA to accommodate population increases. Metric 1: Ability to improve access to services or increase service capacity for high growth areas Big data can be used to identify the most effective way of providing services by informing policy and providing a better understanding of the need for services in areas of high growth.

Need 2: Address infrastructure challenges in areas with low or negative growth As detailed in the related discussion for Need 1, big data could be used to support better design and delivery of services. In the case of areas with low or negative growth, this option could help establish demand and supply of services, including the evaluating the effectiveness of services. In the case of transport, real-time data could provide information on current usage and demand that can prompt operators to adjust supply while maximising service quality for residents of low growth areas. This option is likely to have ongoing benefits as operators will be able to monitor adjustments to demand in low growth areas and redirect their services to better meet the needs of residents in low growth areas. This option has been assessed as having a ‘Moderate’ contribution against Need 2. The option’s contribution is considered to occur through enabling better responses to infrastructure challenges, not responding directly, so a rating of ‘Significant’ was not assigned. Metric 1: Ability to optimise infrastructure delivery while maintaining or improving service delivery within low growth areas Big data can be used to identify the most effective way of providing services by informing policy and providing a better understanding of the need for services in areas of low or negative growth.

Victorian data analytics centre VDA Page 233 Supplement B – Options assessed (document 4 of 4)

Need 10: Meet growing demand for access to economic activity in central Melbourne Data is required to plan, deliver and manage transport services and infrastructure. For example, real-time data can be used to manage congestion and alleviate bottlenecks. A range of government departments may currently record data relevant to transport planning, including the density of employment and residential areas, demand for travel and asset utilisation among others. Additional, non-conventional supporting data may also be publically accessible through a range of data gathering practices to further support decision making. There is the opportunity to combine these data sets and draw insight through analytics for management of transport networks and planning for new capacity. This option could have benefits for the planning, assessment/maintenance and performance of transport infrastructure that supports access to economic activity in central Melbourne. This option is likely to have ‘Moderate’ benefits for Need 10 as it has the potential to support demand management interventions as well as enable better planning and monitoring of access to central Melbourne. The option’s contribution is considered to occur as an enabler rather than through direct response to the need, so a rating of ‘Significant’ was not assigned. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city Tracking travellers and using the passenger data can pinpoint where the system is inefficient, and which neighbourhoods might be over- or under-served. In addition, integrated ticketing and fleet tracking systems make use of available passenger data to help transit operators track and manage their vehicle fleets (Xerox, City analytics, 2015). Metric 2: Improvements in transport performance across the network to access central Melbourne In urban transport real-time data allows optimisation across the network. Digitisation in infrastructure networks could improve forecasting, the reliability of transport, and its efficiency and utilization by harnessing big data and technology.

Need 11: Improve access to middle and outer metropolitan major employment centres As discussed in relation to Need 10, the use of big data could have benefits for the planning, assessment/maintenance and performance of transport infrastructure. This would contribution to supporting access to middle and outer metropolitan major employment centres. For example, this option could enable real-time demand management of the transport system, which could improve access by smoothing the flows of goods and people. This option is likely to have ‘Moderate’ benefits to meet Need 11, through enabling improved planning, operation and evaluation of services that provide access to middle and outer metropolitan major employment centres. The option’s contribution is considered to occur as an enabler rather than through direct response to the need, so a rating of ‘Significant’ was not assigned. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from middle and outer major employment centres Improved data capability can help the transport system identify and predict demand. Real-time data provides a complete view of current usage and demand. Metric 2: Improvements in transport performance across the network to access middle and outer major employment centres With traffic management it is possible to adjust signal timing to the exact arrival time of cars, trams, buses and trucks, thus ensuring efficient and reliable travel for everyone.

Need 12: Improve access to jobs and services for people in regional and rural areas This option could improve access to jobs and services for those in regional and rural areas if excess demand exists or gaps in the transport network are identified through the use of big data. Similar to Need 1 and Need 2, this option could improve understanding of demand for infrastructure and services, and the effectiveness of different models of infrastructure and service provision. This could have benefits to Need 12 outside of those captured in the metrics.

Victorian data analytics centre VDA Page 234 Supplement B – Options assessed (document 4 of 4)

This option has been assessed as having a ‘Moderate’ contribution against Need 2. The option’s contribution is considered to occur through enabling better delivery of initiatives that promote access to jobs and services, not responding directly, so a rating of ‘Significant’ was not assigned. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from major employment centres and service centres in rural and regional areas Cost savings from improved demand management and efficiency could help expand transport infrastructure to rural and regional areas. Real-time data could identify areas of greatest demand and the potential for new service lines. Metric 2: Improvements in transport performance across the network to access to jobs and services in rural and regional areas Real-time data can identify poor performing services and lead to improvements in reliability and efficiency. Metric 3: Improvements in ICT connectivity in rural and regional areas The requirement for improved data capability relies on adequate data which may see an improvement in ICT connectivity in rural and regional areas in order to access the real-time data.

Need 13: Improve the efficiency of freight supply chains This option could improve the efficiency of freight supply chains if interventions reliant on data, for example, real time responses to changes in demand for transport networks, are enabled. This option could also support better planning for the infrastructure that affects freight supply chains, for example, ports. This option is likely to have ‘Moderate’ benefits to meet Need 13, through enabling improved planning, operation and evaluation of government initiative’s that affect the efficiency of freight supply chains. The option’s contribution is considered to occur as an enabler rather than through direct response to the need, so a rating of ‘Significant’ was not assigned. Metric 1: Reduction in cost of the total freight task (origin to destination) This option could reduce the cost of the total freight task by supporting more effective investment in freight infrastructure, and through potential uses to improve the effectiveness of existing transport networks.

Need 19: Improve the resilience of critical infrastructure This option is expected to have a significant contribution to improving the resilience of the State's infrastructure as better information, particularly real time information, could be used to quickly identify and respond to shocks. Over time, data collection and use could also inform risk assessment and planning processes. This option is likely to have a ‘Significant’ contribution to Need 19 if real time identification of shocks is enabled. Metric 1: Increase in the resilience of critical infrastructure to disruptions New and up-to-date information that can be easily tracked and disseminated can help operators and customers keep informed about moment-to-moment changes to infrastructure networks in shock situations. Metric 2: Increase in the resilience of critical infrastructure to climate change Data capability that can track changes to usage and disruptions of critical infrastructure could help in the planning of responses to climate change.

Victorian data analytics centre VDA Page 235 Supplement B – Options assessed (document 4 of 4)

Victorian data analytics centre VDA Page 236 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Better use and analysis of data is assumed to support better decision making, resulting in avoided state costs. The application for analysis suggested in the description for this option has the potential to benefit the resilience of transport systems. This option has the potential to improve the delivery of a number of Victorian Government services, for example, those in health or education. The full effect of the option would depend on the integration of the data analytics centre with the departments that deliver these services, and the improvement in services achieved, which has not been assessed.

Victorian data analytics centre VDA Page 237 Supplement B – Options assessed (document 4 of 4)

Water delivery efficiency in irrigation WDE

Infrastructure Victoria’s Option Description Irrigation delivery systems in Victoria were traditionally open channel based systems, and studies have previously shown that these systems lose large quantities of water through evaporation, leakage and seepage. This option proposes additional investment to improve water delivery efficiency in open channel systems. A range of projects have been undertaken or are being planned to modernise irrigation systems and achieve water savings. Examples are the $2 billion northern Victoria modernisation project, pipeline projects completed for the Wimmera Mallee system and a range of other projects across the state. This option seeks to close out the modernisation initiative by identifying additional areas that may benefit from irrigation modernisation including pipelining. This will involve assessment of irrigation systems that still have low delivery efficiencies and preparation of business cases for modernisation of these systems. Sector Certainty of evidence Water and waste High Option type Evidence base Better use/New or expanded assets Department of Environment, Land, Water and Planning, 10-year Evaluation of the Environmental Location and spatial context Contribution – Summary Report (2015) Rural Victoria Department of Environment, Land, Water and Planning, Water for Victoria, a Discussion Paper This option is applicable to areas where irrigation has not yet been upgraded and modernised. (2016) Upgrading has been carried out in a number of Department of Environment, Land, Water and locations including the largest project in the Planning, Modernising irrigation systems research Goulbourn-Murray region, Werribee and Sunraysia. note (http://www.depi.vic.gov.au/water/rural-water- and-irrigation/improving-irrigation- Risks and Opportunities efficiency/modernising-irrigation-systems) The option involves capital investment in specific Department of Environment, Land, Water and existing irrigation systems. Care will need to be Planning, Sunraysia Modernisation Project (website taken in prioritising sites to make sure that current accessed August 2016) land use is sustainable (economically and environmentally) and consistent with the Department of Sustainability and Environment implementation of other water strategies (former), Water Savings Protocol: Technical Manual for the Quantification of Water Savings in Irrigation This option will improve the efficiency of use of a Water Distribution Systems (2012) key input in agriculture, which may have additional benefits for regional communities Victorian Auditor General, Irrigation Efficiency Programs (2010) Water efficiencies gained through implementation of the option could free up water entitlements for other uses, such as environmental flows

Water delivery efficiency in irrigation WDE Page 238 Supplement B – Options assessed (document 4 of 4)

Direct option cost Goulburn Broken Catchment Management Authority website, Comparing Total Costs of Irrigation The capital or implementation cost of the option, Systems in Victoria (2016) plus the annual recurrent costs incurred within the 30 year study period of this option is: Lower Murray Water (website accessed July 2016) $25 million – $50 million Premier of Victoria, Irrigation Upgrades for Werribee and Bacchus Marsh (website accessed August Capital / implementation cost 2016) $10 million – $25 million What could influence this option? This option would be influenced by the need to Annual recurrent costs minimise water losses as water becomes more $10 million – $25 million valuable in dry periods. In response this option would improve the utilisation Option lead time of existing water supplies, and support future growth in demand by improving the overall If this option was committed to today, it could be efficiency of the irrigation system. implemented in: 1 – 5 years When could it be required? Operational life Victoria may need this option to be implemented in: 0 – 5 years (2016 – 2021) The expected operational life of this option (from opening) is: What is the risk of deferring this 25 – 50 years option? Cost certainty If this option were deferred there may be a risk to long-term water security and supply. As most The certainty of costing evidence is rated: irrigation systems have either been modernised or Medium there are plans in place to do so, the risk is considered to be relatively low. Major irrigation modernisation or pipelining projects have already been committed to by the The risk to the State if this option is deferred is: Commonwealth and Victorian governments. The Low largest of these projects is the Goulburn-Murray Water Connections Project, which is currently being delivered with the aid of $2 billion in funding from the Commonwealth and Victorian governments. Further projects under this option, are likely to be of a much smaller scale. As an indicative example is the Werribee Irrigation District upgrade, which will replace 39km of open channels with pipelines, covering an area of 3000ha. The State Government committed $11.4 million for the upgrade. As most projects have been completed across the state, this option is entails completing a small number of outstanding upgrades. It is assumed that remaining initatives could be completed at a cost of double that of Werribee, totalling approximately $23 million. Annual recurrent costs have been calculated as the sum of maintenance/repairs, power required and labour, which equated to approximately 15 percent of capital cost per annum. Costing source Victorian Ombudsman, Investigation into the Food Bowl Modernisation Project and related matters (2011) DELWP (website accessed July 2016)

Water delivery efficiency in irrigation WDE Page 239 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas This option supports the more effective use of water in agriculture by minimising water losses in delivery systems. This generates water savings as well as incentivising efficient agricultural practices. Studies (DELWP, n.d.) have shown benefits from interventions including water being made available for other purposes including irrigation, urban uses and the environment. In periods where water supplies are constrained, this option ensures that water resources are conserved. Overall, this option has been assessed as having a moderate contribution to the need. This option is likely to have ongoing benefits due to the operating life of the infrastructure and interventions involved. This option entails completing a couple of outstanding upgrades, for which the benefits will accrue as these are completed. Given the scale of these remaining upgrades, these are likely to have a moderate impact across all time periods. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users By improving the efficiency of irrigation infrastructure this option increases water availability by minimising losses adding to the pool of water available for uses including urban water use. Metric 2: Increase in the efficiency of irrigation delivery systems This option is designed to increase the efficiency of irrigation delivery systems, and so has the potential to have a moderate contribution against the metric. Metric 3: Increase in total water available for non-urban water users This option would increase the amount of water available for all water users including the environment and irrigators. As this option addresses the limited number of outstanding upgrades, these are likely to be important water savings projects for local areas, coupled with the extent of upgrades, this option would make a moderate contribution to the metric.

Water delivery efficiency in irrigation WDE Page 240 Supplement B – Options assessed (document 4 of 4)

Water delivery efficiency in irrigation WDE Page 241 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected have benefits for resilience, as the intervention is designed to improve water security through more efficient use. It is also anticipated to support regional communities, through investment in the agricultural industry. Environmental benefits from the option are limited to better use of a scarce resource. The gains in water efficiency are assumed to accrue to primary producers, instead of being diverted for a community or environmental purpose.

Water delivery efficiency in irrigation WDE Page 242 Supplement B – Options assessed (document 4 of 4)

Webb Dock freight rail access WDF

Infrastructure Victoria’s Option Description Provide rail access to Webb Dock to enable it to support end-to-end export and import supply chains. Webb Dock is currently being expanded to create capacity for an extra one million TEU a year in the Port of Melbourne and is due to start operating in early 2017. A new access road connecting Webb Dock to the Westgate freeway is being developed but there is currently no provision for rail transportation. Providing rail access to Webb Dock could potentially quadruple the capacity of the dock to ~4.5 million TEU. Sector Certainty of evidence Transport Medium Option type Evidence base New or expanded assets Port of Melbourne Corporation, Port Development Strategy 2025 Vision (2009) Location and spatial context Port of Melbourne Corporation, Webb Dock Melbourne central subregion Redevelopment Project – Microsimulation Modelling This option is located in the Port of Melbourne, Assessment (2010) although the benefits of this may be seen along Melbourne's freeway network. Risks and Opportunities There may be risks with contaminated soil from working in a presently decommissioned rail corridor and the difficulties constructing a crossing over the Yarra river. It is assumed that these would be managed during the construction phase. The largest opportunity of this option is through expanding the capacity of the Port of Melbourne, it delays the need for a second port. The need for a significant refurbishment or re-build of the West Gate Bridge / other road infrastructure caused from the stresses or heavy truck traffic may also be reduced from potential mode shift from road to rail.

Webb Dock freight rail access WDF Page 243 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the sufficient volumes of containerised freight through 30 year study period of this option is: the Port of Melbourne. Throughput at the port is anticipated to increase with the expansion of Webb $1 billion – $3 billion Dock, which is likely increase the number of road Capital / implementation cost freight vehicles along the West Gate and Monash Freeways. This option would allow this freight to be $1 billion – $3 billion transport by rail instead. Progression of associated infrastructure developments, such as the Western Annual recurrent costs Intermodal freight terminal and the Melbourne to Brisbane inland rail projects may bring forward the $25 million – $50 million trigger for Webb Dock rail access. Developing metropolitan container terminals (option PMM) will Option lead time also need to occur to allow for the benefits of Webb Dock rail. If this option was committed to today, it could be implemented in: In response this option would increase the capacity of Webb Dock, improve the utilisation for road 1 – 5 years transportation of containerised freight, and Operational life decrease the number of heavy freight vehicles utilising the West Gate and Monash freeways. The expected operational life of this option (from opening) is: When could it be required? >50 years Victoria may need this option to be implemented in: Cost certainty 10 – 15 years (2026 – 2031) The certainty of costing evidence is rated: What is the risk of deferring this option? Low If this option were deferred road congestion around Capital costing assumes approximately $200 million Port Melbourne and arterial roads may worsen. for an intermodal terminal, $300 million for rail line construction and $500 million for a bascule bridge The risk to the State if this option is deferred is: across the Yarra River near the Bolte Bridge to Medium connect to a new elevated rail through the Fishermans Bend Precinct. Recurrent cost assume three percent of capital expenditure per annum for maintenance. Costing source Port of Melbourne Corporation, Port Development Strategy 2035 Vision (2009)

Webb Dock freight rail access WDF Page 244 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 13: Improve the efficiency of freight supply chains Traffic modelling commissioned by the Port of Melbourne Corporation found traffic to and from Webb Dock will roughly double between this year and 2025, to more than 10,000 vehicles per day, including more than 6,000 trucks per day (PMC, 2014). The Port of Melbourne Corporation notes that, based on its trade forecasts and assessment of infrastructure needs, the optimum time for developing freight rail access to Webb Dock would be in association with the long term development of Webb Dock for international containers in order to expand the capacity of the port (PMC, 2009). The contribution of this option in reducing the cost of the total freight task is likely to increase over time. In the short term, this option may not be required in that there will not be any port capacity constraints (owing to the current expansion project) and the supporting infrastructure to encourage mode shift (metropolitan container terminals) are not fully developed. This is not to say there won’t be any immediate changes in mode shift from road to rail, but before other supporting projects are built these changes may not be substantial. In the longer term (in conjunction with metropolitan container terminals) this option will be able to increase the capacity of Webb Dock and also provide relief for inner-Melbourne’s increasingly congested road network. This option receives a ‘Low’ contribution rating in years 0 – 10, which increases to ‘Moderate’ in years 10 – 15 and ‘Significant’ in years 15 – 30 owing to the increased freight task of Victoria. Metric 1: Reduction in the cost of the total freight task (origin to destination). This option is anticipated to reduce the cost of the total freight task over the longer term. As the focus of Webb Dock shifts to internal container freight, this option is likely to reduce congestion and increase throughput.

Webb Dock freight rail access WDF Page 245 Supplement B – Options assessed

Webb Dock freight rail access WDF Page 246 Supplement B – Options assessed

Economic, social and environmental assessment summary By increasing the capacity of the Port of Melbourne to move freight by rail, this option will assist to lower industry costs and will improve international competitiveness of Victoria’s export industries. Additional economic benefits for the State will be derived from the net reduction in transport maintenance costs due to less wear and tear on the road network. Although significant resources will be required during the construction phase of this option, over the longer term it is anticipated to remove 3,500 daily vehicle trips from the Port of Melbourne. The resulting decreases in greenhouse gas emissions, air and water pollution, and non-renewable energy consumption would be expected to be significant.

Webb Dock freight rail access WDF Page 247 Supplement B – Options assessed

Wonthaggi desalination plant expansion WDP

Infrastructure Victoria’s Option Description This option would expand the capacity of the Wonthaggi Desalination Plant to provide greater water security. The plant can currently deliver up to 150 billion litres of desalinated water, but was built to allow for an upgrade to deliver up to 200 billion litres. Sector Certainty of evidence Water and waste Medium Option type Evidence base New or expanded assets Aquasure, The Victorian Desalination Process (website accessed July 2016) Location and spatial context CSIRO and Bureau of Meteorology 2015, Climate Melbourne region Change in Australia Information for Australia’s Natural Resource Management Regions: Technical This option has the potential to impact all Victorians. Report (2015) Risks and Opportunities Department of Environment, Land, Water and The option consolidates water production in Eastern Planning (DEegeLWP), Water for Victoria (2016) Melbourne, and so limits the contribution the option can make to the resilience of water networks, relative to a new site for desalination elsewhere in the state. This option could provide incremental expansion, and so more effectively match the rate of demand growth than other options for large scale augmentation.

Wonthaggi desalination plant expansion WDP Page 248 Supplement B – Options assessed

Direct option cost Costing source The capital or implementation cost of the option, Deloitte and Aurecon, Infrastructure Capability plus the annual recurrent costs incurred within the Assessment – advice to Infrastructure Victoria 30 year study period of this option is: (2016) $5 billion – $10 billion Department of Treasury and Finance, Partnerships Victoria Project Summary: Victorian Desalination Capital / implementation cost Project (2009) $1 billion – $3 billion Melbourne Water, Summary of Technical Analysis: 2016/17 Desalinated Water Order Advice (2016) Annual recurrent costs Victorian Auditor-General, Auditor-General's Report $100 million – $250 million on the Annual Financial Report of the State of Victoria, 2012-13 (2013) Option lead time What could influence this option? If this option was committed to today, it could be The need for this option could be influenced by implemented in: population growth and environmental factors 5 – 10 years increasing the demand on the Wonthaggi desalination plant. If storage capacity were to Operational life decrease to a minimum threshold, additional capacity at the desalination plant may be required The expected operational life of this option (from to ensure future supply. opening) is: In response this option would increase the capacity 25 – 50 years of the desalination plant to help ensure future water Cost certainty supply. The certainty of costing evidence is rated: When could it be required? Low Victoria may need this option to be implemented in: The existing Wonthaggi desalination plant was 15 – 30 years (2031 – 2046) constructed via a PPP with a capital cost of between $3.5-4.5 billion (Department of Treasury What is the risk of deferring this and Finance 2009). Whilst the current production option? capacity of the plant is 150 billion litres per year, If this option were deferred future water security much of the associated infrastructure was designed could be threatened. However, the impact of and constructed to facilitate a production capacity deferring this option is dependent on a number of 200 billion litres per year. This includes the 84 factors. Lower than anticipated population growth, kilometre transfer pipeline, the intake and outlet or favourable weather conditions could extend the tunnels and the power supply capability. supply of water from existing sources and delay the Limited information is available to inform an need for capacity expansion at the desalination assessment of the likely capital cost of expanding plant. Alternatively, deferred expansion of the the plant. It has been assumed that the capital cost desalination plant may threaten water security to expand the plant capacity by an additional third across the state, given continued strong population would be marginal would be less than proportionate growth and low rainfall. when compared to the original construction. In the The risk to the State if this option is deferred is: absence of evidence for costs, a conservatively high band has been assigned. Medium Current ongoing costs to the state include an ‘availability charge” of $588 million for the right to access water from the facility (Deloitte and Aurecon 2016). It is considered likely that the availability charge would increase in proportion to the expansion. Therefore, annual recurrent costs in the range of $100 million to $250 million has been assumed.

Wonthaggi desalination plant expansion WDP Page 249 Supplement B – Options assessed

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas It is assumed this option would be investigated after the desalination plant is in moderate frequency of use, meaning that the resilience benefits the desalination plant now offers are reducing. It is challenging to forecast future water supply from rain-fed sources. Considering scenarios for population growth and water supply developed by DELWP, it is likely that water demand could exceed current water supply in Melbourne between 2025 and 2040 (DELWP 2016). With a proposed expansion of water supply by 50 gigalitres, this option contributes to the need through capacity expansion. Producing extra water at the desalination plant will contribute to the need as additional water can be transported to many regional and rural areas through the interconnected water grid. The contribution of this option to the need is ‘Moderate’. The contribution of this option increases over time as the likelihood of water demand in excess of existing water supply increases. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users Through providing additional capacity, this option enhances the likelihood that water supply is sufficient to meet minimum levels of service. Metric 2: Increase in the efficiency of irrigation delivery systems This option does not target the efficiency of irrigation systems and so is not likely to have any direct impacts against this metric. Metric 3: Increase in total water available for non-urban water users This option increases total water supply in the state, which may increase the volumes distributed to non-urban water users.

Wonthaggi desalination plant expansion WDP Page 250 Supplement B – Options assessed

Wonthaggi desalination plant expansion WDP Page 251 Supplement B – Options assessed

Economic, social and environmental assessment summary The option increases water supply capacity in eastern Victoria incrementally, and so has positive benefits for resilience. By increasing the total supply of water in Victoria available for distribution, this option may benefit regional and remote communities. This option is anticipated to have negative environmental impacts due to the resource intensive nature of desalination, and the release of by-products into the environment. This option could have further environmental benefits if environmental water flows were increased following its implementation

Wonthaggi desalination plant expansion WDP Page 252 Supplement B – Options assessed

Western intermodal freight terminal WIF

Infrastructure Victoria’s Option Description Development of a new interstate terminal and freight precinct at Truganina in Melbourne's west, as well as a rail link to the Interstate Rail Freight Network. Currently interstate containers bound for distribution in Melbourne are railed to terminals at Dynon adjacent to the Port, and then trucked to the outer suburbs. The Dynon terminals have limited space and capacity, and can be difficult to access due to increasing congestion on the inner Melbourne road and rail networks. The Western Interstate Freight Terminal (WIFT) will move freight more efficiently by providing modern terminal facilities closer to the large industrial cluster in Melbourne's west, reducing the time and length of truck trips. Sector Certainty of evidence Transport Low Option type Evidence base New or expanded assets Department of Economic Development, Jobs, Transport and Resources, Western Interstate Location and spatial context Freight Terminal, website, Melbourne western subregion http://economicdevelopment.vic.gov.au/transport/fre ight/intermodal-terminals/western-interstate-freight- This option has the potential to impact all Victorians. terminal (2016) Risks and Opportunities Department of Infrastructure and Regional Development, Trends: Infrastructure and Transport This is a high cost asset which is dependent on long to 2030 (2014) term economic growth to become viable. State Government of Victoria, Victoria the Freight This option has the potential to significantly State: The Victorian Freight and Logistics Plan, increase the capacity and reduce costs cost of August (2013) interstate freight transport in the north-south and east-west national corridors.

Western intermodal freight terminal WIF Page 253 Supplement B – Options assessed

Direct option cost Costing source The capital or implementation cost of the option, Moorebank Intermodal Company, Fact Sheet plus the annual recurrent costs incurred within the (2016) 30 year study period of this option is: ARTC website (2016) $750 million – $1 billion What could influence this option? Capital / implementation cost The need for this option could be influenced by $250 million – $500 million demand for space at the existing Dynon terminals exceeding capacity, together with market demand Annual recurrent costs for a freight terminal closer to existing freight precincts in Melbourne's outer suburbs. $10 million – $25 million In response this option would increase the capacity of the intermodal freight network. It would also Option lead time reduce the cost of freight transportation. If this option was committed to today, it could be When could it be required? implemented in: Victoria may need this option to be implemented in: 1 – 5 years 10 – 15 years (2026 – 2031) Operational life What is the risk of deferring this The expected operational life of this option (from opening) is: option? >50 years If this option were deferred the Dynon terminals may reach capacity, and containerised freight may Cost certainty then be directed away from the Port of Melbourne. Inner city congestion may increase, as the number The certainty of costing evidence is rated: of road freight vehicles increases. Medium The risk to the State if this option is deferred is: The Moorebank Intermodal Terminal Company has Medium recently entered an agreement with the Sydney Intermodal Terminal Alliance to build and operate an intermodal terminal and freight precinct at Moorebank. On 241 hectares of land this terminal precinct will connect to Port Botany via ARTC's Southern Sydney Freight line. It will initially handle 250,000 containers, but this will increase incrementally to 1.05 million containers by 2030. This project will also include nearly one million square metres of warehousing. The Sydney Intermodal Terminal Alliance will provide most of the capital investment, approximately $1.5 billion to the project over 10 years, whilst the Commonwealth Government will contribute about $370 million to fund the rail connection, biodiversity offsets and preparation of land. The assessment of the western intermodal freight terminal includes rail connections from existing freight lines in Albion plus freight handling facilities and warehousing. These facilities are assumed to be approximately one quarter of the scale of the Moorebank intermodal freight precinct project, and therefore, capital cost is expected to be around one quarter of the Moorebank project. Annual recurrent costs are assumed to be three percent of capital cost.

Western intermodal freight terminal WIF Page 254 Supplement B – Options assessed

Contribution to needs Need 13: Improve the efficiency of freight supply chains The efficiency of interstate freight transportation throughout Melbourne is currently limited by the congested and difficult to access Dynon terminals. The Western Intermodal Freight Terminal will seek to address these inefficiencies by providing modern facilities closer to the existing freight precinct in Melbourne’s west. It is anticipated that this option will significantly improve Melbourne’s freight handling capacity, particularly of the north-south and east-west national corridors. A number of confirmed freight capacity related projects are due to be completed over the coming decade, such that the marginal benefit of this option over the short term may be more limited. In particular, the Western Distributor (2022) and Melbourne Metro (2026) are both anticipated to relieve pressure on the freight network. The Western Distributor will directly address port-related traffic on local roads and provide an alternative to the West Gate Bridge, while Melbourne Metro is expected to increase the mode share of public transport away from private vehicles. Over the longer term however, it is likely to be a key component of the network required to transport the forecast 170 billion net tonne kilometres annual freight task by 2046 (State Government of Victoria 2013). As the freight task increases over time, the benefits of the freight terminal are likely to increase. This option receives a 'Moderate' contribution to year 15, after which time it increases to 'Significant'. This assessment assumes that the Port of Melbourne remains operational at full capacity, and the contribution may change if a second container port were developed. In particular, if the Port of Hastings is developed, containers may be attracted away from the Port of Melbourne which may reduce the overall impact of an intermodal terminal in Melbourne's west. Metric 1: Reduction in cost of the total freight task (origin to destination) This option is anticipated to reduce the cost of the total freight task. It is intended to increase Melbourne’s freight handling capacity and will be located closer to the existing freight precinct in Melbourne’s west.

Western intermodal freight terminal WIF Page 255 Supplement B – Options assessed (document 4 of 4)

Western intermodal freight terminal WIF Page 256 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option expands rail freight capacity on the north-south and east-west national corridors. As a large investment in freight transport, this option is expected to benefit business costs and trade exposed industries. Through strengthening freight rail links into Melbourne, this option is also expected to support remote or regional communities. Mode shift to freight rail transport from road transport is anticipated to be supported by this option, and benefit energy use, greenhouse gas emissions and air pollution. This option is also expected to benefit the resilience of the freight network.

Western intermodal freight terminal WIF Page 257 Supplement B – Options assessed (document 4 of 4)

Water infrastructure optimisation through increased network connectivity WIO1

Infrastructure Victoria’s Option Description This option looks at increasing connections between water supply systems and water sources across the state to improve supply reliability. This would create greater flexibility in the water system and improve the ability to respond to shortages. Connections previously provided are the North South Pipeline and the Goldfields Superpipe. This option considers if additional connections or extensions would be beneficial in allowing water to move to highest value uses across the state. Sector Certainty of evidence Water and waste Medium Option type Evidence base New or expanded assets Infrastructure Partnerships Australia & Water Services Association of Australia, Doing the Location and spatial context important, as well as the urgent: Reforming the urban water sector (2015) Statewide This option affects all water systems statewide. State Government of Victoria, Water for Victoria: Discussion Paper (2016) Risks and Opportunities AWA-Deloitte, State of the Water Sector Report There is a risk that the water sector may evolve (2015) faster than anticipated leading to poor governance Productivity Commission, Australia's Urban Water outcomes without a timely review. For example, Sector: Productivity Commission Inquiry Report more localised solutions to water management may (2011) increase in the short term. National Water Commission, Urban Water in The cost of water for some uses may come down. Australia: future directions (2011) This option may better facilitate options such as WME. PricewaterhouseCoopers, Review of urban water supply strategies (2010)

The cost of water for some uses may come down. This option may better facilitate options such as WME.

Water infrastructure optimisation through increased network connectivity WIO1 Page 258 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by a plus the annual recurrent costs incurred within the need to better coordinate and share infrastructure 30 year study period of this option is: and resources amongst water organisations and regions. $100 million – $250 million In response this option would reduce the cost of Capital / implementation cost water and ensure water is utilised where it is most $100 – $250 million needed. When could it be required? Annual recurrent costs Victoria may need this option to be implemented in: $1 – $10 million 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be option? implemented in: If this option were deferred sharing of water <1 year infrastructure could remain limited. Operational life The risk to the State if this option is deferred is: Low The expected operational life of this option (from opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low Construction of the 70 kilometre North-South Pipeline that carries water from the Goulburn River to Melbourne's Sugarloaf Reservoir was completed in 2010 at a cost of $750 million, and this includes $50 million of works to increase the capacity of Winneke Water Treatment Plant and $20 million of works to build a new pump at Prestion to distribute water from Sugarloaf, Cardinia and Yan Yean reservoirs across the Melbourne water network. The North-South Pipeline is capable of adding 75 billion litres of water to Melbourne's network each year. The Goldfields Superpipe has three components: a 46.5 kilometre Bendigo pipeline that cost around $108 million, a 87 kilometre Ballarat pipeline that cost around $180 million and an augmentation of the existing Eppaloch to Sandhurst pipeline. It is assumed that the major network connectivity water projects have been completed in Victoria and that this water infrastructure optimisation through increased network connectivity option will include several small scale expansion projects that connect existing networks. Annual recurrent costs are assumed to be minimal, and have been calculated at 2 percent of capital cost. Costing source Stakeholder consultation

Water infrastructure optimisation through increased network connectivity WIO1 Page 259 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas Victoria’s interconnected pipeline network allows for the transport of water around the state, enabling trade. In periods of low water supply, the network helps lessen threats to water security, as water can be transported from areas of relatively higher supply, or production in the case of the desalination plant, to areas of lower supply. The Water for Victoria discussion paper identifies a number of projects that could be implemented to achieve the aims of this option, and through consultation, more are likely to emerge. The scale of projects is assumed to be smaller than additions to the network over the past ten years such as large scale pipeline, contributing to the moderate rating. This option is assumed to be a rolling series of small scale augmentations to the network over time, with benefits accumulating accordingly. This option is rated as Low initially, rising to moderate after 10 years, on the basis that the infrastructure is likely to become more important in the future. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users Past expansions to the water network have enabled the functioning of the water market and benefited water security. The contribution to the need is anticipated to increase over time, assuming that expansions are undertaken sequentially. Metric 2: Increase in the efficiency of irrigation delivery systems The option does not target the efficiency of irrigation delivery systems. Metric 3: Increase in total water available for non-urban water users Expansions of the water infrastructure network would allow more areas of Victoria access to water sourced from all over the state and contribute to water security in regional areas.

Water infrastructure optimisation through increased network connectivity WIO1 Page 260 Supplement B – Options assessed (document 4 of 4)

Water infrastructure optimisation through increased network connectivity WIO1 Page 261 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Through improving governance arrangements, this option seeks to improve the allocation of water between different uses (community, environmental, agricultural, industrial and commercial). The option is also likely to benefit resilience by better aligning the planning of different participants in the sector. If the option is successful, there is the potential for benefits to accrue to different areas. Business may experience greater supply security or more cost effective supply, including trade exposed industry like agriculture. Communities, especially remote or regional communities, may also benefit from greater supply security. Finally, environmental benefits could follow from increased water allocations to environmental water flows.

Water infrastructure optimisation through increased network connectivity WIO1 Page 262 Supplement B – Options assessed (document 4 of 4)

Water infrastructure optimisation through governance arrangements WIO2

Infrastructure Victoria’s Option Description This option is a review to simplify governance arrangements in the water industry. This will provide role clarity, better facilitate long term planning and investment decisions and ensure optimal use of infrastructure. The water and wastewater management governance framework in Victoria is generally well regarded across Australia. This option builds on this by ensuring that governance arrangements enable planning in the long term interest of customers. Simplified governance frameworks will assist in moving water to highest value uses in a timely and efficient manner. This will also ensure that policy and delivery functions are clear and that existing infrastructure is utilised efficiently through more targeted investment decisions and better institutional alignment. Clear governance structures also enable timely discussions on water resource requirements for the future. For example, where alternative sources of water such as recycled wastewater or harvested stormwater are being considered, governance structures with clear ownership, roles and responsibilities enable requirements for uptake of these resources to be identified and implemented in a timely manner. Having a flexible governance structure will assist to ensure that available water resources are conserved and additional resources are utilised to increase water security. It will also assist in delivering financially resilient water businesses over the long term. Sector Certainty of evidence Water and waste Medium Option type Evidence base Better use Infrastructure Partnerships Australia & Water Services Association of Australia, Doing the Location and spatial context important, as well as the urgent: Reforming the urban water sector (2015) Statewide This option affects all water systems statewide. State Government of Victoria, Water for Victoria: Discussion Paper (2016) Risks and Opportunities AWA-Deloitte, State of the Water Sector Report There is a risk that the water sector may evolve (2015) faster than anticipated leading to poor governance Productivity Commission, Australia's Urban Water outcomes without a timely review. For example, Sector: Productivity Commission Inquiry Report more localised solutions to water management may (2011) increase in the short term. National Water Commission, Urban Water in The cost of water for some uses may come down. Australia: future directions (2011) This option may better facilitate options such as WME. PricewaterhouseCoopers, Review of urban water supply strategies (2010)

Water infrastructure optimisation through governance arrangements WIO2 Page 263 Supplement B – Options assessed (document 4 of 4)

Direct option cost This option would be influenced by a need to better manage investment decisions to increase water The capital or implementation cost of the option, security, and to better coordinate and share plus the annual recurrent costs incurred within the infrastructure and resources. 30 year study period of this option is: In response this option would reduce the cost of <$1 million water and ensure water is utilised where it is most needed. Capital / implementation cost When will it be required? <$1 million Victoria may need this option in: Annual recurrent costs 0 - 5 years (2016 - 2021) <$1 million What is the risk of deferring this Option lead time option? If this option were deferred innovation and sharing If this option was committed to today, it could be of water infrastructure could remain limited. implemented in: The risk to the State if this option is deferred is: <1 year Medium Operational life The expected operational life of this option (from opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low As mentioned in the option description, the water governance framework in Victoria is well regarded. For costing purposes this option is assumed to involve benchmarking Victoria's framework against international examples, reassessing governance structures in consultation with industry to identify and resolve barriers to long-term planning and decision making, and reviewing the roles of various agencies to ensure clarity in oversight for various aspects of water management and the water industry. This work is likely to be led by government and conducted over a period of time spanning less than one year. It is expected that the cost of managing this option would be largely absorbed by existing bodies. The outcomes of this reform option are likely to be relevant for 10-25 years, during which further investigation would need to be conducted to respond to changed market conditions. Costing source Stakeholder consultation

Water infrastructure optimisation through governance arrangements WIO2 Page 264 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas The millennium drought and various floods have shown that the insecurity of inflows into catchments is an acute issue for the water sector. There is significant evidence to suggest that Victoria will experience reduced rainfall due to the effects of climate change (State Government of Victoria, 2016). To manage water supply variability effectively, the water sector needs to have sufficient capacity and resilience to cope with major climate events, such as floods and droughts (National Water Commission, 2011). Current governance arrangements for the water sector in Victoria are rated as effective by AWA-Deloitte (2015) due to well established economic regulatory arrangements. In Victoria the individual water corporations make decisions with a focus on maintaining water security for their individual water system. In times of stress this may lead to inefficient water allocation due to service providers, regulators and other parties being unclear on objectives and responsibilities (National Water Commission, 2011). Dispersed responsibility for security of supply may lead to poor co-ordination, duplication of processes, and the preparation of water plans that are not consistent with government objectives. Additionally, all options to secure water supply may not be properly and fully considered (PricewaterhouseCoopers, 2010). Reformed governance arrangements may facilitate more flexible use of existing state water assets and resources, removing policy barriers which restrict supply. This may allow more efficient trading of water, such as from the desalination plant, through trade by substitution, to get the most value from surplus water and to support water management (State Government of Victoria, 2016). In the short-term this option is likely to assist with more efficient allocation of scarce water resources. In the future, this option may provide better targeted water infrastructure provision. This option is rated moderate across the 30 year period. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users This option may reduce the vulnerability of water supply systems to water shortages by setting consistent objectives and clear roles and responsibilities for governments, water utilities and regulators to facilitate efficient allocation of water resources, better direction of investment, less reliance on water restrictions and water conservation programs. Metric 2: Increase in the efficiency of irrigation delivery systems This option is unlikely to increase the efficiency of irrigation delivery systems. Metric 3: Increase in total water available for non-urban water users Clarifying governance arrangements will enable more efficient and clearer plans on how to secure water resources for non-urban water users such as the environment, industry/agriculture and water for recreation and firefighting for example.

Water infrastructure optimisation through governance arrangements WIO2 Page 265 Supplement B – Options assessed (document 4 of 4)

Water infrastructure optimisation through governance arrangements WIO2 Page 266 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Through improving governance arrangements, this option seeks to improve the allocation of water between different uses (community, environmental, agricultural, industrial and commercial). The option is also likely to benefit resilience by better aligning the planning of different participants in the sector. If the option is successful, there is the potential for benefits to accrue to different areas. Business may experience greater supply security or more cost effective supply, including trade exposed industry like agriculture. Communities, especially remote or regional communities, may also benefit from greater supply security. Finally, environmental benefits could follow from increased water allocations to environmental water flows.

Water infrastructure optimisation through governance arrangements WIO2 Page 267 Supplement B – Options assessed (document 4 of 4)

Water market development WME

Infrastructure Victoria’s Option Description This option considers expansion of the water market in Victoria to incorporate different types of water users at the bulk water supply level. The water market played a key role in the movement of water across Northern Victoria during the millennium drought. This enabled water trading and movement of water to the highest value uses. This option considers expansion of the water market with regards to representation of a broader range of water users including urban, agricultural, industrial, environmental, firefighting and recreational water use. This also includes incorporation of different water products such as water from storages, recycled treated wastewater and harvested stormwater. This will promote the use of price signals to determine the value of water. Sector Certainty of evidence Water and waste Medium Option type Evidence base Better use Department of Environment, Land, Water and Planning, Water for Victoria, a Discussion Paper Location and spatial context (2016) Statewide Frontier Economics, Potential water market This option affects all areas connected or to be expansion: A report prepared for Infrastructure Victoria (2016) connected to the Victorian water grid. National Water Commission, Urban Water in Risks and Opportunities Australia: future directions (2011) There is a risk that social equity issues may arise in allowing water supply for households to directly compete with water use for economic activities such as agriculture. There is an opportunity for development of smaller (decentralised) water markets around the State which would increase local resilience to climate change and assist in better valuing water.

Water market development WME Page 268 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by a plus the annual recurrent costs incurred within the determining that pricing signals of bulk water would 30 year study period of this option is: ensure the most efficient use of this resource. $10 million – $25 million In response this option would improve how water is used. Capital / implementation cost When could it be required? $1 million – $10 million Victoria may need this option to be implemented in: Annual recurrent costs 0 – 5 years (2016 – 2021) <$1 million What is the risk of deferring this option? Option lead time If this option were deferred other measures to better If this option was committed to today, it could be utilise water resources would need to be explored. implemented in: The risk to the State if this option is deferred is: 1 – 5 years Low Operational life The expected operational life of this option (from opening) is: 25 – 50 years Cost certainty The certainty of costing evidence is rated: Low This option proposes a substantial policy change, as it would likely require extensive stakeholder consultation, modelling support and market design expertise to develop a model to expand the water market. The functions of the Victorian Water Register may need to expand under this option, and potentially a water grid manager may need to be established to operationalise expanded water markets (Frontier Economics 2016). In 2013-14 the State Victorian Water Register was allocated income of $845,000 to fund activities (DEPI 2014). Through expanding the market, this option is assumed to increase the resources required by ~ $400,000 per annum. The extent of the recurrent costs will be affected by market design choices. Costing source Department of Environment and Primary Industries (DEPI), Annual report 2013-14 (2014) Frontier Economics, Potential water market expansion: A report prepared for Infrastructure Victoria (2016) Stakeholder consultation

Water market development WME Page 269 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas Water markets in northern Victoria are already relatively well developed for the trade of water for irrigation; however, the market for other water uses and in other parts of the state is largely immature (DELWP 2016). Currently the options for allowing water markets to determine the distribution of water are limited. The expanding water grid in Victoria provides an instrument for addressing water shortfalls in regional areas by allowing access to non-correlated catchments or non-rainfall dependant water sources. It is unlikely that there will be full interconnection of the water grid across the state due to the high cost of water infrastructure. Water trade to areas experiencing water security issues can be facilitated by an expansion of the water market which determines the distribution of water to address scarcity and the value of water demands (Frontier Economics 2016). The types of water traded across markets are important as water markets in the north of Victoria trade in non- potable water. If water from a non-potable were moved to a potable water system it would first have to be treated. Under existing regulatory frameworks recycled water cannot be moved through potable water infrastructure. As water markets can involve the substitution of water resources, the use of desalinated water in one part of the grid for example, may reduce pressure on water storage and free up water resources in other parts of the grid (DELWP 2016). Further research would however be required to determine how different water products such as recycled treated wastewater or stormwater can be incorporated into the water market. The expansion of the water market across Victoria could facilitate greater trading across rural and urban water systems. The entire connected rural and urban water system would be seen as a common resource where various water users compete to secure water allocations. The level of integration would need to be determined; however, it is likely that rural and urban water authorities would represent households and residents while large water users may have individual access. Evidence suggests that water markets can assist in managing threats to water security. It is estimated that water trading significantly reduced the impact of drought on regional gross domestic product in the Southern Murray Darling Basin by around $4.3 billion over the period 2006-07 and 2010-11 (National Water Commission 2012). Additionally, the experience of urban water businesses in northern Victoria is that water trading enables them to secure urban water supplies in drought periods (Frontier Economics 2016). This option receives a ‘Moderate’ rating across all time periods. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users This option may assist in reducing the vulnerability of water supply systems by allowing water to move more freely around the water grid. Water may be sourced from non-rain dependant sources or from non-correlated catchments. Price signals would indicate where water is needed most, and to a certain extent, allow reallocation accordingly. As such this option has been rated moderate for this metric. Metric 2: Increase in the efficiency of irrigation delivery systems This option may lead to more efficient investments in irrigation infrastructure, including the potential for distribution of costs of irrigation water delivery infrastructure. An expanded water market may facilitate this by allowing access to non-correlated catchments or non-rainfall dependant water sources. Metric 3: Increase in total water available for non-urban water users Beyond new water sources (e.g. recycled water), water in Victoria is generally allocated. Additional water for one user therefore usually means less water for another user. This option therefore may enable trading of alternative water sources but in itself does not create additional water. At the same time, a new water market in the south may enable the environment for example to bid for water along with other users. This could create an additional supply for the environment. Similarly irrigators are non-urban water users and a new market in the south for example opens up more opportunities to acquire water through trade. As this option may enable better allocation but will not increase the total water available it is rated low for all time periods.

Water market development WME Page 270 Supplement B – Options assessed

Water market development WME Page 271 Supplement B – Options assessed

Economic, social and environmental assessment summary This option would moderately benefit efficiency of water usage across the state, particularly during times of drought. For this reason, it would also moderately benefit resiliency of water supplies and reduce disruptions as noted in the contribution assessment above. Water markets have shown to support regional and remote communities and economies, through providing greater water security.

Water market development WME Page 272 Supplement B – Options assessed

Wastewater management in small towns WMS

Infrastructure Victoria’s Option Description Investment in wastewater management in small towns. Failing septic tanks can cause environmental problems and pose public health and safety risks. Most small towns in Victoria have ageing septic tanks and would benefit from clearer planning on wastewater management. This option proposes government leadership on an approach to manage wastewater in small towns. This includes a review of current practice, governance arrangements and infrastructure requirements. New South Wales for example has a Country Towns Water and Sewerage Program that has developed a Best Practice Management of Water Supply and Sewerage Framework, provides tools, guidance and support to help utilities adopt better practices, and monitors and reports on utilities’ implementation of better practices and performance. South Australia has also explored a community approach to wastewater management in rural townships that allows for recycling and adoption of integrated water cycle management principles. Sector Certainty of evidence Water and waste Low Option type Evidence base Better use Environmental Protection Authority, Water Plan 3 Guidance (2011) Location and spatial context GWMWater, Rupanyup sewerage scheme (2015)

HDS Australia, The South Australian approach to This option will affect smaller regional towns in rural township community wastewater management Victoria. (2010) Risks and Opportunities Victorian Auditor General, Protecting our environment and community from failing septic It may be difficult to align funding from different tanks (2006) levels of government and private landholders to invest in solutions recommended through policy development. This option could be expanded from existing septic tanks to include requirements and guidelines for new developments related to septic tanks.

Wastewater management in small towns WMS Page 273 Supplement B – Options assessed

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the desire to better understand the risks posed by 30 year study period of this option is: poorly functioning septic tanks to community health and wellbeing, as well as their environmental $1 million – $10 million impacts. Capital / implementation cost In response this option would reduce risk through <$1 million identification of problem areas and the development of mitigation strategies. Annual recurrent costs When could it be required? $1 million – $10 million Victoria may need this option to be implemented in: 0 – 5 years (2016 – 2021) Option lead time What is the risk of deferring this If this option was committed to today, it could be implemented in: option? 1 – 5 years Then the understanding of the risks posed by poorly performing septic tanks could be reduced. Operational life The risk to the State if this option is deferred is: The expected operational life of this option (from Medium opening) is: 5 – 10 years Cost certainty The certainty of costing evidence is rated: Low This option is assumed to be policy development and review to scope the extent of the problem, given gaps in current understanding (VAGO 2006). This option is not expected to result in recurrent costs. Instead, this option is expected to result in the development of further programs to address the issue through infrastructure replacement and investment. Costing source Victorian Auditor General’s Office (VAGO), Protecting our environment and community from failing septic tanks (2006)

Wastewater management in small towns WMS Page 274 Supplement B – Options assessed

Contribution to needs Need 17: Improve the health of waterways and coastal areas Poorly managed septic tanks can result in pollution of surrounding soil, ground water or waterways (Victorian Auditor General 2006). This option would address the impact of poorly managed septic tanks on waterways through a review. The extent of the risk from poorly managed metropolitan septic tanks is documented, but the extent of risk from poorly managed regional septic tanks likely not as well quantified (VAGO 2006). Following the Victorian Auditor General’s report local councils were required to develop domestic wastewater management plans for townships without central sewerage systems, and most are considered to have done so (Environmental Protection Authority 2011). This occurred under the Country Towns Water Supply and Sewerage Program, which also included funding to upgrade regional systems (VAGO 2006, GMWWater 2015). These plans may require updating (Environmental Protection Authority 2011). Strong evidence is yet to be identified for the current status of the Country Towns Water Supply and Sewerage Program or council wastewater management plans. The review could address the gap in understanding of regional issues. As the option describes, the review could also work towards addressing the gaps by assessing governance and infrastructure needs for a response to the issue. This option is considered to have a low direct contribution towards the need of addressing the health of waterways and coastal areas, but would play an enabling role in addressing the issue. For this reason the option has been assessed as a ‘Low’ contribution. Subsequent interventions enabled by this option would likely have higher contributions to the needs. Metric 1: Increase of waterways in good or excellent condition There is little available data on the likely extent of this issue, so this option will contribute to the metric by aiding assessment of the scale of the problem Metric 2: Improvements in coastal water quality This option is expected to have limited direct impacts on this metric.

Wastewater management in small towns WMS Page 275 Supplement B – Options assessed (document 4 of 4)

Wastewater management in small towns WMS Page 276 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is expected to benefit regional and rural communities, as the option would identify issues with current sewerage services and strategies for management. The identification of poorly performing septic tanks is likely to have health benefits through awareness of the issues.

Wastewater management in small towns WMS Page 277 Supplement B – Options assessed (document 4 of 4)

Wallan rail electrification WRE1

Infrastructure Victoria’s Option Description Extend the electrified metropolitan rail network to Wallan. The scope includes the utilisation of the Upfield Line via the reinstatement of tracks between Upfield to Somerton with duplication of the track between Gowrie and Upfield, construction of a new track pair from Roxburgh Park to Craigieburn and electrification works between Upfield and Wallan. This extension to the electrified network will give greater access to the new growth areas in Melbourne’s north through additional services to Seymour, Wallan, Upfield and Craigieburn. It will improve capacity and reliability across all these lines and operations across the network. Furthermore it will enable more efficient access to central Melbourne and support access to jobs and services. Sector Certainty of evidence Transport Medium Option type Evidence base New or expanded assets Public Transport Victoria (PTV), Network Development Plan – Metropolitan Rail (2012) Location and spatial context Department of Economic Development, Jobs, Melbourne northern subregion Transport and Resources (DEDJTR), Melbourne This option would affect the suburbs within the rail Metro Business Case (2016) catchment between Craigieburn and Wallan. Department of Environment, Land, Water & Planning (DELWP), Victoria in Future 2015 and Risks and Opportunities Victorian Government unpublished population With the change from diesel rolling stock to projections (2015) suburban electrified rolling stock, there is a risk that the community may not support the loss of carriage seating and conductor service. Negative sentiments might delay the roll out of the project and potentially the demand for the new services that electrification would offer. There is the opportunity to enhance the greater power grid during the electrification of the regional rail lines. This could support power upgrades to growing communities along the rail corridor saving future disruption and capital costs.

Wallan rail electrification WRE1 Page 278 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the demand for transport into central Melbourne, driven 30 year study period of this option is: by strong population growth in Melbourne's northern suburbs. The station of Wallan is currently serviced $3 billion – $5 billion by 14 train services per day into the city. This is Capital / implementation cost likely to be provide insufficient access to jobs and services into the future. This option may improve $1 billion – $3 billion capacity and reliability of travel to outer northern suburbs. Annual recurrent costs In response this option would increase the capacity $50 million – $100 million of the network to accommodate journeys to and from the city and employment centres such as Option lead time Lockerbie. When could it be required? If this option was committed to today, it could be implemented in: Victoria may need this option to be implemented in: 1 – 5 years 10 – 15 years (2026 – 2031) Operational life What is the risk of deferring this The expected operational life of this option (from option? opening) is: If this option were deferred population growth in the >50 years northern suburbs may struggle to access jobs and services in central Melbourne, given the low Cost certainty frequency services which are currently provided. The certainty of costing evidence is rated: The risk to the State if this option is deferred is: Medium Medium The Wallan extension costing has been done with the assumption that all existing level crossings to Craigieburn will have been completed before these duplication and electrification works begin. The electrification costed independently and also including contingency will be around $1.3 billion – $2.0 billion. Based on Infrastructure Victoria advice the total operating cost per annum for the extension is $51 million which increases to $67 million after 15 years. Further detail is contained in the Major transport projects preliminary costings in Supplement C (as part of option CLR). Costing source AECOM, Assessment 3 – Supplement C 'Major projects preliminary costing report' (2016)

Wallan rail electrification WRE1 Page 279 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth The City of Hume and Shire of Mitchell (which contains Donnybrook and Wallan stations) are both extremely high growth areas, which are likely to demand improved services to those currently provided by the existing diesel rolling stock. Over the next 30 years, the City of Hume is expected to grow by 93,000 people to 2031, adding an extra 70,000 – 80,000 people in the period 2031 – 2046. The Shire of Mitchell is also expected to more than triple in population in the next 30 years, adding 45,000 people to 2031 and an additional 50,000 to 60,000 people from 2031 to 2046. Electrification of the network will increase service capacity to these areas, while also improving service performance. This option is expected to have a ‘Low’ rating in years 0 – 5, increasing to ‘Moderate’ in years 5 – 15 and ‘Significant’ in years 15 – 30 as sufficient population is established in the area. Metric 1: Ability to improve access to services or increase service capacity for high growth areas Electrification is expected to increase capacity on the line, allowing for improvements in service quality and frequency, which is expected to expand access to transport infrastructure.

Need 10: Meet growing demand for access to economic activity in central Melbourne Connecting Wallan and Donnybrook to the metropolitan rail network will allow train services to increase significantly. Presently, there are 14 services per day which go from Wallan station to the city whereas, only two stops down the line, Craigieburn has 68 services per day. As population growth continues in these areas, only 14 services per day will likely be insufficient to cater for demand. Similar to Need 1, this option is expected to have a ‘Low’ rating in years 0 – 5, increasing to ‘Moderate’ in years 5 – 15 and ‘Significant’ in years 15 – 30. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city The additional capacity and improved journey times offered by electrification of the Wallan rail network will increase the capacity of the network to accommodate journeys to and from activity centres such as Lockerbie. Metric 2: Improvements in transport performance across the network to access central Melbourne Similarly, service improvements will allow the growing populations of Hume and Mitchell to access central Melbourne more easily.

Wallan rail electrification WRE1 Page 280 Supplement B – Options assessed (document 4 of 4)

Wallan rail electrification WRE1 Page 281 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Electrifying the rail line from Craigieburn to Wallan will provide a significant service increase to the important public transport link for the future high growth area in northern Melbourne (Lockerbie). Connecting this area of affordable housing to the CBD will allow individuals to better access jobs, education, health and other services in a way which may be more affordable than using a private car. The electrification will take place along the existing line, meaning the further construction required will be minimal with no new impacts on local ecosystems or habitats. Increasing the service quality of public transport on this line will drive mode-shift towards rail, and help relieve congestion along the Hume Freeway coming in to Melbourne in addition to the environmental benefits from the less energy intensive form of transport.

Wallan rail electrification WRE1 Page 282 Supplement B – Options assessed (document 4 of 4)

Wollert rail extension WRE2

Infrastructure Victoria’s Option Description Extend the electrified metropolitan rail network to Wollert. The new electrified section would extend from Lalor to Wollert as a spur line off the South Morang Line. This extension to the electrified network will give greater access to the new growth areas in Melbourne’s north and reduce reliance on private vehicles. It will enable more efficient access to central Melbourne and support access to jobs and services. To serve the growth areas of Epping North and Wollert in the nearer term (as well as define the corridor for potential future rail service) a new busway could be implemented utilising the median or edges of High Street. This bus rapid transit service could be operated to light rail standards (with complete traffic segregation, signal prioritisation, defined stations, and dedicated, potentially articulated rolling stock) and would include the provision of a convenient transfer arrangement both to/from trains at Lalor Station. This staged approach could support the intensification of land development patterns necessary to support the future implementation of a full rail service. Sector Certainty of evidence Transport Low Option type Evidence base New or expanded assets City of Whittlesea, Complete the heavy rail extension to Epping North and Wollert (2015) Location and spatial context Department of Environment, Land, Water & Melbourne northern subregion Planning (DELWP), Victoria in Future 2015 and Victorian Government unpublished population This option is located in the suburbs of Epping North and Wollert, between Epping Road and the projections (2015) Hume Freeway in the outer-northern suburbs of Department of Transport, Planning and Local Greater Melbourne. Infrastructure, Plan Melbourne (2014) Risks and Opportunities KMPG, Arup & Jacobs, Transport modelling for Infrastructure Victoria (2016) The staged approach may reduce the efficacy of this option, as people may not use the transport connection if it is not as high quality as a heavy rail service. Without other network upgrades there is a risk that only a limited number of services may be delivered to along this connection. This could limit the number of people who switch from driving to taking the train to work and the resulting congestion reduction benefits. In order for the benefits of this option to be fully realised, there will need to be capacity enhancements at Clifton Hill (not included in the scope of this project). These works could potentially be included in other options such as the high- capacity signalling in RSF, the Clifton Hill junction rationalisation which may be part of MRC or during the delivery of Melbourne Metro 2 (MMS).

There is the opportunity to develop this community around the public transport corridor, reducing car dependence.

Wollert rail extension WRE2 Page 283 Supplement B – Options assessed (document 4 of 4)

Direct option cost Costing source The capital or implementation cost of the option, Public Transport Victoria (PTV), Mernda Rail plus the annual recurrent costs incurred within the Extension (website, accessed July 2016) 30 year study period of this option is: Public Transport Victoria (PTV), Annual Report $500 million – $750 million 2014-15 (2015) Capital / implementation cost Stakeholder consultation $500 million – $750 million What could influence this option? The need for this option could be influenced by Annual recurrent costs population growth in Epping North and Wollert. $1 million – $10 million In response this option would eventually increase the supply of the heavy rail network. Option lead time When could it be required? If this option was committed to today, it could be implemented in: Victoria may need this option to be implemented in: 1 – 5 years 5 – 10 years (2021 – 2026) Operational life What is the risk of deferring this option? The expected operational life of this option (from opening) is: If this option were deferred there will not be a high quality public transport connection to these areas. >50 years The risk to the State if this option is deferred is: Cost certainty Low The certainty of costing evidence is rated: Medium The capital cost estimate for this option accounts for construction of road and rail grade separations, stabling facilities, maintenance facilities and train stations, including capacity for car parking. It assumes track length would be around 8.5 kilometres (From Lalor to the corner of Bridge Inn Road and Epping Road in Wollert via the service road between the Northern Hospital and Pacific Epping) and that it would be fully electrified. Cost per kilometre is assumed to be similar to the Mernda rail extension, which is proposed to cost $588 million and will consist of a stretch of twin track totalling eight kilometres, three new stations, five grade separations, stabling and electrification (PTV 2016). This indicates approximately $73 million per kilometre of twin track. Annual recurrent cost has been calculated as $10 per train service kilometre, which is expected to cover most costs associated with running the service, such as power, wages, train stabling and maintenance. There are approximately 140 services through Lalor per day (70 each direction), which extrapolated to an annual figure gives 51,100 services. This slightly overstates the number of services given fewer trains run on the weekends, however it allows for some expansion of capacity. Inputting a distance of 8.5 kilometres yields an annual recurrent cost of $4.3 million.

Wollert rail extension WRE2 Page 284 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth Wollert is situated in one of the fastest growing areas of Australia, which means there will be a high demand for good public transport connections in the future. The demand within the Whittlesea will be partly satisfied through the committed Mernda rail extension due in 2019 (5km west of Wollert), however a large part of this growth is expected in the Epping North / Wollert area. This option is expected to have a ‘Moderate’ contribution to the need in years 0 - 10, with the contribution increasing to ‘Significant’ in years 15 – 30 in response to population growth. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option is expected to directly expand access to transport services in a high growth area.

Need 10: Meet growing demand for access to economic activity in central Melbourne Transport modelling indicates congestion on the arterial roads from the outer-northern suburbs is likely to rapidly increasing over the next 30 years in a base case without intervention (KPMG, Arup & Jacobs 2016). Growing congestion indicates that the public transport network, including the heavy rail network will play a larger role in central city access in the future. This option would expand the capacity of the heavy rail network through extending electrification. The proposed alignment of the Wollert extension will service the Northern Hospital and the Pacific Epping shopping centre, both major activity generators which are currently outside of the walkable catchment of the existing Epping station. If implemented in stages using a BRT with provision to be converted to heavy rail, this will allow residents of Epping North and Wollert to access Lalor station on the South Morang line. In the longer term, the heavy rail connection will give a direct connection to the central city. This option has been assessed as likely to have a ‘’Moderate’ contribution rating in years 0 – 15. The contribution of this option is expected to increase to ‘Significant’ in years 15 – 30 due to population growth. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city As a future growth area, there will be the requirement for high quality public transport connections in accessing the central city for jobs and education opportunities. Metric 2: Improvements in transport performance across the network to access central Melbourne This option helps reduce congestion through the arterial roads in the northern suburbs, as well as on the Western Ring road and CityLink.

Wollert rail extension WRE2 Page 285 Supplement B – Options assessed (document 4 of 4)

Wollert rail extension WRE2 Page 286 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary As one of the highest future growth areas in Victoria, public transport connections bring a number of benefits including access to jobs, education, and social opportunities. For example, this option will directly tie the Northern Hospital and the Pacific Epping shopping centre with a heavy rail line, as they are currently outside the reasonable walking catchment of Epping station on the South Morang line. The option is also likely to improve housing affordability by providing supporting infrastructure to greenfield develop sites. This connection to the heavy rail network will allow future residents to have less reliance on personal vehicles and may alleviate congestion on the arterial roads to the north of Melbourne. This is likely to benefit emissions of greenhouse gases, energy use and resource use. The expansion of capacity in the transport network is expected to have benefits for its resilience.

Wollert rail extension WRE2 Page 287 Supplement B – Options assessed (document 4 of 4)

Water supply augmentation WSA1

Infrastructure Victoria’s Option Description This option seeks to significantly increase water supply in Victoria through new desalination and new groundwater capacity. In the short term, there are a number of initiatives available to secure water resources during dry periods. Victoria is however still largely dependent on surface water resources. Assuming current climate projections that indicate that Victoria will have a hotter, drier climate in the future, this option considers additional major non-rainfall dependant water supply sources that can provide water security. This may include new desalination capacity. It is unlikely that groundwater resources in Victoria can provide major water supply augmentation; however, this can be considered as well. This option is different from option WDP in that it considers major new capacity for the long term. Sector Certainty of evidence Water and waste Low Option type Evidence base New or expanded assets CSIRO and Bureau of Meteorology 2015, Climate Change in Australia Information for Australia’s Location and spatial context Natural Resource Management Regions: Technical Regional Victoria Report (2015) Department of Environment, Land, Water and This option could be implemented statewide. Planning (DELWP), Water for Victoria Discussion Risks and Opportunities Paper (2016) There is a risk that the timing required for major Victorian Water Register, Victorian Water Accounts, new augmentation projects is uncertain while lead 2013-2014 (2014) times may be required to implement these projects. Victorian Water Register, 2014-15 water With groundwater supply there is a risk that entitlements and use report (2015) opportunities for sustainable extraction may be limited. There is an opportunity to use of new technology to augment water supply.

Water supply augmentation WSA1 Page 288 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, This option would be influenced by population plus the annual recurrent costs incurred within the growth and development increasing demand for 30 year study period of this option is: water, at the same time that climatic factors threaten existing water sources. This option would $5 billion – $10 billion be required when demand for water exceeds the Capital / implementation cost current capacity of existing water infrastructure. $3 billion – $5 billion In response this option would increase water and assist to improve the security by moving away from a reliance on rainfall dependant sources. Annual recurrent costs When could it be required? $50 million – $100 million Victoria may need this option to be implemented in: Option lead time 15 – 30 years (2031 – 2046) If this option was committed to today, it could be What is the risk of deferring this implemented in: option? 1 – 5 years If this option were deferred there may be reduced Operational life security of water supply. Large scale supply augmentation will likely remain one tool in a range The expected operational life of this option (from of approaches to address water security, so it is opening) is: likely that this option could be deferred if demand 25 – 50 years management/ incremental supply additions/ efficiency upgrades were more effective. Cost certainty The risk to the State if this option is deferred is: The certainty of costing evidence is rated: Medium Low The Wonthaggi desalination plant provides an indicative basis to cost this option, noting that the costs of a new desalination plant would be higher than new groundwater capacity. Given this option is proposing major new capacity; a desalination plant has been used as the cost basis. The annual recurrent cost estimate is calculated at the cost of operating the Wonthaggi desalination expansion (option WDP), plus three percent of the additional water projects totalling around $500 million, which would be expected to be required for maintenance of infrastructure. It should be noted that technological advances may mean that desalination technology becomes more cost effective in the future. Costing source Victorian Auditor-General's Office (VAGO), Report on the Annual Financial Report of the State of Victoria, 2012-13 (2013)

Water supply augmentation WSA1 Page 289 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas Forecasts of future climate indicate that variability in water supply is likely to increase. With increasing population and a changing climate, the need for additional water supply augmentation may emerge in Victoria. This option responds to these changes. It is assumed this option would be investigated after the desalination plant is in use, meaning that the resilience benefits the desalination plant now offers are exhausted. It is challenging to forecast future rainfall; however, it has been assumed that this occurs towards the end of the next thirty years (see DELWP, 2016). There is ongoing innovation and development in desalination technology, and there is also ongoing research and development on sustainable use of groundwater resources. The intention of the option is that a large scale augmentation to supply is built to provide water security. This is anticipated to strongly reduce the vulnerability of water systems to water shortages when implemented by increasing the supply of water available to be allocated to different purposes (for example, environmental, urban, and agricultural). The option is anticipated to have a ‘Significant’ and ongoing benefit against the need once implemented. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users This option supports investment in large scale augmentation of water supplies, which would have a significant contribution against this metric. Metric 2: Increase in the efficiency of irrigation delivery systems The option does not target the efficiency of irrigation delivery systems. Metric 3: Increase in total water available for non-urban water users Large scale supply augmentation is likely to occur close to areas of high urban use, however, additional supply on the network frees up water for alternate use in other areas, including environmental and irrigation water uses.

Water supply augmentation WSA1 Page 290 Supplement B – Options assessed (document 4 of 4)

Water supply augmentation WSA1 Page 291 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary Rain fed water supplies are likely to be increasingly variable in the future, and may not be sufficient to keep pace with demand. Water is an essential part of community, economic and environmental wellbeing and rural and regional areas have been particularly impacted by reduced water supply in dry periods. As this option is for a substantial augmentation of the water supply system to increase supply and security of supply, and is likely to result in new augmentation outside of Melbourne, this option has wide ranging benefits including the improved resilience. Industrial users and trade exposed industries are anticipated to benefit from increased supply security, including agricultural users. It is also supports remote or regional communities. Increased supply further increases the availability for water for environmental flows which could benefit habitats and ecosystems. Improved water supply security is anticipated to benefit access to community and sporting infrastructure that could be compromised during periods of shortage. Environmental impacts of this option would ultimately depend on the technology implemented. For example, resource and energy use would likely be high under a desalination option. As the technology to be used has not been specified, the full environmental impacts have not been assessed here.

Water supply augmentation WSA1 Page 292 Supplement B – Options assessed (document 4 of 4)

Water supply augmentation through building new dams WSA2

Infrastructure Victoria’s Option Description This option considers building new dams to provide additional water supply for Victoria. While current climate projections indicate that Victoria will have a hotter, drier climate, this option considers whether there are water catchments that can provide suitable rainfall runoff yields to enable the construction of new dams. Benefits of this would be creation of additional water resources for consumptive purposes and therefore increasing water security. Sector Certainty of evidence Water and waste Medium Option type Evidence base New or expanded assets CSIRO, Climate Change in Australia: technical report (2015) Location and spatial context Department of Environment, Land, Water and Statewide Planning (DELWP), Climate Change and Victoria This option affects all potential sites for new dams (website accessed August 2016) across Victoria. Federal Department of Environment and CSIRO, Climate Change in Australia (website accessed Risks and Opportunities August 2016) There is a risk that there is insufficient additional University of Melbourne, Stormwater Harvesting rainfall runoff to fill large new dams. Dams can also and the Potential for New Dams in Victoria (2016) cause environmental degradation. This would need to be addressed in the design, implementation and operation of any new dams. This option may reduce the impacts of flooding in some areas.

Water supply augmentation through building new dams WSA2 Page 293 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the forecast future water scarcity in Victoria. 30 year study period of this option is: In response this option would increase the $250 million – $500 million resilience of Victoria's water storages, by increasing capacity. Capital / implementation cost When could it be required? $250 million – $500 million Victoria may need this option to be implemented in: Annual recurrent costs 0 – 5 years (2016 – 2021) $10 million – $25 million What is the risk of deferring this option? Option lead time If this option were deferred Victoria would need to If this option was committed to today, it could be increasingly consider other options to reduce implemented in: demand for water and/or increase supply through 1 – 5 years other measures. Operational life The risk to the State if this option is deferred is: Low The expected operational life of this option (from opening) is: 10 – 25 years Cost certainty The certainty of costing evidence is rated: Low The 2012-2013 NSW budget estimated a requirement of $400 million required to increase the capacity/number for dams. It is assumed a similar capital cost will be required for a similar project in Victoria.

Annual recurrent cost has been calculated at three percent of capital costs. Costing source Infrastructure New South Wales, State Infrastructure Strategy: Water infrastructure (2012)

Water supply augmentation through building new dams WSA2 Page 294 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 14: Manage threats to water security, particularly in regional and rural areas Dams are important to Victoria’s water supply security as they play a key role in balancing out the natural fluctuations in stream flows. The variability in stream flows in Australia is high. This increases the need for large water reserves to provide water security in times of low rainfall. Increasing climate variability is predicted to decrease the amount of surface water available for capture in the future (CSIRO 2015). In the past 30 years, there has been significant change in the importance of protecting and enhancing the environment. Any consideration of potential dam sites should consider the full range of economic, environmental and social impacts during construction and operation. An analysis of potential opportunities for new dams in Victoria undertaken by the University of Melbourne (University of Melbourne 2016) for Infrastructure Victoria concluded that there is no opportunity for large dams to be built in northern Victoria, and limited opportunity to build large dams in undeveloped areas in southern Victoria. The water supply increases provided by existing dams are anticipated to be small providing an additional yield of less than 0.5 percent of water supplies. Based on this information, the University of Melbourne concluded that there is only a small potential to augment water supplies, and therefore manage threats to water security in Victoria by building new large dams (University of Melbourne 2016). This option is rated ‘Low’ across all time periods. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users This option is anticipated to reduce the vulnerability of water supply by augmenting the total capacity of water supply across Victoria. Options for the location of new dams is limited, however, depending on connections and water market regulations, additional water has the potential to be traded across the network to where it is most needed. Additional available water is anticipated to be limited due to the limited availability and yield of potential large dams. Metric 2: Increase in the efficiency of irrigation delivery systems This option is not considered to affect the efficiency of irrigation delivery systems. Metric 3: Increase in total water available for non-urban water users This option may increase the availability of water for nonurban users by increasing the total amount of water available across Victorian dams. Additional available water is anticipated to be limited due to the limited availability and yield of potential dam options.

Water supply augmentation through building new dams WSA2 Page 295 Supplement B – Options assessed (document 4 of 4)

Water supply augmentation through building new dams WSA2 Page 296 Supplement B – Options assessed (document 4 of 4)

Wind and solar energy generation large scale investments WSE

Infrastructure Victoria’s Option Description Similar to proposals by the government this option considers State-wide auction schemes to develop wind and solar energy in Victoria. Based on developed targets for renewable energy development in Victoria, this option proposes to subsidise wind and solar generation by the implementation of a state-wide auction scheme. Projects would be chosen on a 'value for money' basis, and proponents would enter into long-term contracts with the Victorian Government in some capacity. This would provide flexibility on project administration and cost recovery. Evidence indicates that large scale wind and solar farms will be the major sources of low emission energy over the next 30 years. Any energy transition policy is therefore likely to focus on the build out of these generation technologies. This option involves the development of a program that subsidises investments in large-scale wind and solar generation in Victoria. Similar incentive schemes are currently in operation nationally, through the Large-scale Renewable Energy Target (LRET) and in states and territories, such as the ACT Renewable Energy Target. Sector There is an opportunity to undertake this option in conjunction with the Electricity network Energy infrastructure capability option (ENI) to establish a strategy for Victoria’s future energy generation and Option type identify opportunities to expand renewable energy Better use infrastructure. The installation of capacity using wind or solar Location and spatial context technologies could be scaled to adapt to the Statewide location of renewable energy resources around the state, and potentially, to optimise the performance Under this option, wind and solar resources across of the network. the state could be developed. Certainty of evidence Risks and Opportunities Medium Subsidies have the potential to crowd out R&D and innovation and the specification of wind and solar Evidence base as technologies for a potential auction process is restrictive. ACT Government Environment and Planning Directorate, Solar Auction (2016) A high penetration of intermittent generation can Australian Energy Market Operator (AEMO), challenge the stability of electricity networks through Generation Information, 2016 causing frequency control issues. With high penetration of intermittent generation additional Deloitte, Infrastructure Capability Assessment: risks such as price volatility in the wholesale market Energy (2016) might arise. Department of Economic Development, Jobs, Supporting investments in reserve, fast dispatch Transport and Resources (DEDJTR), Victoria’s generation could be required to provide continuity of Renewable Energy Roadmap (2015) supply when renewable resources (such as wind, Department of Premier and Cabinet (DPC), sunlight) are unavailable. These would likely need Renewable Energy Targets to create thousands of to be equivalent to the magnitude of renewable jobs (2016) capacity. Department of the Environment, State and Territory This option is likely to affect the commercial viability greenhouse gas inventories (2015) of existing generators. Care would need to be taken Geoscience Australia, Solar Energy (website, to maintain investor confidence in the Victorian accessed July 2016) (2016b) energy supply sector. Grattan Institute, Climate phoenix: a sustainable The option could form part of an explicit strategy to Australian climate policy (2016) transition to low carbon energy supply, including identification of generation sources to be replaced. Wind and solar energy generation large scale investments WSE Page 297 Supplement B – Options assessed (document 4 of 4)

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by the plus the annual recurrent costs incurred within the capacity of the State to meet its renewable energy 30 year study period of this option is: targets given the current state of infrastructure. >$10 billion In response this option would increase the supply and use of renewable energy. Capital / implementation cost When could it be required? >$10 billion Victoria may need this option to be implemented in: Annual recurrent costs 0 – 5 years (2016 – 2021) $250 million - $500 million What is the risk of deferring this option? Option lead time If this option were deferred, additional investment in If this option was committed to today, it could be renewable generation would occur based on project implemented in: economics and existing Federal incentives. The 1 – 5 years quantity of investment would likely be higher with additional State subsidies. Operational life The risk to the State if this option is deferred is: The expected operational life of this option (from Medium opening) is: 25 – 50 years Cost certainty The certainty of costing evidence is rated: Low Wind and solar are now close to being competitive with new build fossil fuels (depending upon commodity price and capital return assumptions). A large amount of renewable generation would be needed to replace one or two brown coal power stations. The annual generation of Hazelwood and Yallourn (the two oldest stations) is approximately equivalent to 6000-6500 MW of wind generation. It is estimated that wind capital cost is $2,450/kW, with fixed maintenance costs of $44/kW/annum. To produce an equivalent amount of energy as generated by Hazelwood and Yallourn, total capex in wind energy infrastructure would, therefore, need to total approximately $16 billion, with ongoing annual maintenance costs required at around $352 million. The cost assumption under this option is that the Victorian Government subsidise a portion of capital and recurrent expenditure for a number of wind projects that total this scale over the next 30 years. The capital and recurrent costs are based on wind generation. Values would vary with consideration of solar. Costing source Stakeholder consultation

Wind and solar energy generation large scale investments WSE Page 298 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 18: Transition to low carbon energy supply and use The majority of electricity used in Victoria is generated by emissions intensive fossil fuel generation such as electricity provided from brown coal power plants, which have been identified “high emitting” (Grattan 2016). This option supports the need to transition to low carbon energy supply and use through commissioning and subsidising investment in new renewable capacity. This option proposes the mechanism of an auction process, which has recently been used in the ACT to commission new energy supply. An auction process allows the private sector to tender for supply, and the State can impose a range of supporting selection criteria, for example, price, responsiveness to identified gaps in supply, generation characteristics. The ACT auction procured large scale investment in renewable generation. The auction process elicited the lowest bids for renewable energy generation in the country (Renew Economy 2016) and when completed the solar farms will produce enough power to supply around 10,000 Canberra houses, reducing greenhouse gas emissions by 1,400,000 tonnes over 20 years (ACT Government Environment and Planning Directorate 2016). Wind and Solar technologies are specified in this option. These technologies have the advantages of being in use in Australia and around the world. Wind in particular is well developed, and is the fastest growing renewable energy source in many countries (Geoscience Australia 2016b). Victoria has both wind and solar resources that could be developed to use for electricity generation (Geoscience Australian 2016a, Geoscience Australian 2016b). These are likely to be sufficient to supply the required generation. In the costing assumptions for this option, this has been assumed to provide approximately 200 MW of large scale solar. The amount of wind energy that could be supplied has not been directly quantified, however, is assumed to be larger than the amount of solar due to the relative differences in the levelised cost of energy of the two technologies. The option is assumed to contribute to the need by displacing fossil fuel generation with renewable technologies. Due to the assumed scale of the option the contribution is considered to be ‘Significant’ in all periods following implementation. Metric 1: Reduction in Victoria's greenhouse gas emissions This option supports a higher market share for renewable generation and therefore is likely to reduce greenhouse gas emissions.

Wind and solar energy generation large scale investments WSE Page 299 Supplement B – Options assessed (document 4 of 4)

Wind and solar energy generation large scale investments WSE Page 300 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option supports significant additional renewable energy generation, through which it is expected to have a number of positive environmental impacts. These include those to resource use, energy use and greenhouse gas emissions. There is also the potential for benefits to air pollution and water use (as some fossil fuel generation types are water intensive). This option is for a large scale investment in renewable energy, which is expected to result in changes to generation due to the anticipated displacement of fossil fuel generation from electricity supply. The anticipated reduction jobs in fossil fuel generation is anticipated to be mostly offset by the jobs created for renewable energy asset construction and maintenance, as well as jobs associated with technology development and innovation. The location of the jobs will likely be different however. This option supports significant investment in intermittent electricity supply sources. This is considered likely to affect the resilience of the network. Increasing the volatility of electricity supply is also expected to affect wholesale market prices, increasing costs to businesses and households. This option is anticipated to have a negative impact on gross state by likely reducing the productivity of the electricity supply sector. This is as the option would increase the resources tied up in electricity generation by supporting the development of higher cost electricity generation sources to displace lower cost (although emissions intensive) sources.

Wind and solar energy generation large scale investments WSE Page 301 Supplement B – Options assessed (document 4 of 4)

Wyndham Vale to Werribee rail extension WVW

Infrastructure Victoria’s Option Description Extend the electrified metropolitan rail network between Wyndham Vale and Werribee. The extension will accommodate future growth in Werribee West and provide a direct rail-rail interchange for passengers travelling between the Geelong and Werribee lines. With the completion of Regional Rail Link, Geelong services no longer use the Werribee rail corridor. Currently a bus service meets each train at Wyndham Vale to connect with Werribee line services. This option will give greater access to the new growth areas in Melbourne’s west through additional services and new stations. It will enable more efficient access to central Melbourne and support access to jobs and services. Sector Certainty of evidence Transport Medium Option type Evidence base New or expanded assets Department of Environment, Land, Water & Planning (DELWP), Victoria in Future 2015 and Location and spatial context Victorian Government unpublished population Melbourne western subregion projections (2015) This option affects the Regional Rail Link as well as Public Transport Victoria (PTV), Network Development Plan – Metropolitan Rail (2012) Werribee lines, as it may affect the demand on both. Risks and Opportunities Without other network upgrades there is a risk that only a limited number of services may be delivered to along this connection. This could limit the number of people who switch from driving to taking the train to work and the resulting congestion reduction benefits. There is an opportunity to relocate the Newport Workshops to Wyndham Vale with this option. This could free up valuable inner city land for redevelopment and provide employment in a high growth area.

Wyndham Vale to Werribee rail extension WVW Page 302 Supplement B – Options assessed (document 4 of 4)

Direct option cost Costing source The capital or implementation cost of the option, Public Transport Victoria (PTV), Mernda Rail plus the annual recurrent costs incurred within the Extension (website, accessed July 2016) 30 year study period of this option is: Public Transport Victoria (PTV), Annual Report $500 million – $750 million 2014-15 (2015) Capital / implementation cost What could influence this option? $250 million – $500 million The need for this option could be influenced by sufficient demand for transport between Wyndham Annual recurrent costs Vale and Werribee, through to central Melbourne. $1 million – $10 million In response this option would increase the supply of public transport through the City of Wyndham, and increase redundancy in providing two separate rail Option lead time corridors for people in Wyndham Vale to travel to If this option was committed to today, it could be the central city. implemented in: When could it be required? 1 – 5 years Victoria may need this option to be implemented in: Operational life 15 – 30 years (2031 – 2046) The expected operational life of this option (from What is the risk of deferring this opening) is: option? >50 years If this option were deferred Private motor vehicle Cost certainty development pattern in high growth areas not addressed. Misses opportunity to connect the The certainty of costing evidence is rated: Geelong and Werribee lines and build in Medium redundancy. Costing assumptions for this option account for The risk to the State if this option is deferred is: construction of road and rail grade separations, Medium stabling facilities (mentioned in PTV’s Network Development Plan 2014), maintenance facilities and train stations (including capacity for car parking). It assumes track length is 5.75 kilometres and that it will be fully electrified with a new station at Black Forest road. Cost per kilometre is assumed to be similar to the Mernda rail extension, which is proposed to cost $588 million and will consist a stretch of twin track totalling eight kilometres, three new stations, five grade separations, stabling and electrification. This works out to approximately $73 million per kilometre of twin track. Annual recurrent cost has been calculated as $10 per train service kilometre, which is expected to cover most costs associated with running the service, such as power, wages, train stabling and maintenance. There are 136 services through Werribee per day (68 each direction), which extrapolated to an annual figure gives 49,640 services per annum. This slightly overstates the number of services given fewer trains run on the weekends, however it allows for some expansion of capacity. Inputting a distance of 5.75km yields an annual recurrent cost of around $2.9 million.

Wyndham Vale to Werribee rail extension WVW Page 303 Supplement B – Options assessed (document 4 of 4)

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth As an extremely high growth area, good public transport connections in to the central city and East Werribee employment centres will likely be needed in the future. This option is listed in PTV Network Plan to be implemented in the next 20 years; however the strategic direction of Government may differ from this plan. This option is considered to make a ‘Moderate’ contribution in all time periods. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option is likely to improve access to heavy rail services through a line extension.

Need 10: Meet growing demand for access to economic activity in central Melbourne This option will improve capacity to accommodate more journeys to/from the central city along both the Geelong line and Werribee line, however the majority of passengers will be encouraged to take the metropolitan service (via the Werribee line). Access to the East Werribee employment precinct via Hoppers Crossing or potentially the future Derrimut road station from Wyndham Vale will require this connection to occur. The option is considered to provide a ‘Moderate’ contribution to the need across all time periods, as there are other public transport options to the central city (although would most likely not be as frequent as the electrified service). This option may be dependent on the electrification of the RRL towards Geelong, as Wyndham Vale station may be connected to the electrified network therefore reducing the need for this extension. The development of the East Werribee employment precinct will also dictate the future transport demand of the area. Metric 1: Increase in supply or management of demand for transport system capacity to accommodate journeys to and from the central city By attaching Wyndham Vale station to the metropolitan network, this will increase the ability for both Wyndham Vale and Geelong customers to access the central city through a combination of greater service provision and less congestion. This option will require works expanding the corridor towards the city, and adding more customers to the busy Werribee line may be counterproductive in the shorter term. Metric 2: Improvements in transport performance across the network to access central Melbourne Wyndham Vale station is presently has 51 V/Line services towards the city per day (coming from Geelong), however in the AM peak the average train is 88 percent full (V/Line performance data). By attaching Wyndham Vale in to the metropolitan network, it will allow higher capacity trains to operate (Werribee currently has 64 services per day), significantly reducing congestion on Geelong bound trains.

Wyndham Vale to Werribee rail extension WVW Page 304 Supplement B – Options assessed

Wyndham Vale to Werribee rail extension WVW Page 305 Supplement B – Options assessed

Economic, social and environmental assessment summary Extending the metropolitan rail line from Werribee through to Wyndham Vale will provide important public transport links for this high growth area. Connecting this area of affordable housing to the future East Werribee employment centre and on to the CBD will allow individuals to access jobs in a way which may be more affordable than using a private car. A wide variety of other major social, recreational and educational opportunities will become accessible for the mainly residential Wyndham Vale area in the nearby activity centres and central city. The proposed alignment for this extension will be a new greenfield line requiring intensive construction including some grade separation works and new stations will be required. Providing this line and allowing people to choose public transport instead of driving private vehicles is expected to reduce greenhouse gas emissions and other externalities associated with car use.

Wyndham Vale to Werribee rail extension WVW Page 306 Supplement B – Options assessed

Waste water system augmentation in high growth areas WWS

Infrastructure Victoria’s Option Description This option seeks to increase sewerage and wastewater treatment capacity to manage future demands in Melbourne and regional cities and diversify wastewater management options. For example, the sewerage system in metropolitan Melbourne is under increasing pressure as land subdivisions and development (e.g. for apartments) increase peak wastewater flow rates and volumes. This option considers critical points in the sewerage system that may require augmentation or potential for additional localised wastewater treatment facilities. Sector Certainty of evidence Water and waste Low Option type Evidence base Better use Deloitte and Aurecon, advice to Infrastructure Victoria, Infrastructure Capability Assessment, Location and spatial context Water and Waste (2016) Statewide SGS Economics and Planning, Current and Future This option will affect the high growth areas around State of Victoria -a spatial perspective, advice to Victoria. Infrastructure Victoria (2016) Western Water, Annual Report 2014-15 (2015) Risks and Opportunities This option may duplicate the role existing governance structure in the water and waste industry.

Waste water system augmentation in high growth areas WWS Page 307 Supplement B – Options assessed

Direct option cost What could influence this option? The capital or implementation cost of the option, The need for this option could be influenced by plus the annual recurrent costs incurred within the increased demand on waste water and sewerage 30 year study period of this option is: system, primarily associated with urban and population growth, and failure in current governance $1 million – $10 million arrangements to accommodate this. Capital / implementation cost In response this option would increase the capacity <$1 million of sewerage systems to cope with increased demand, particularly in areas forecast for high growth. Annual recurrent costs When could it be required? $1 million – $10 million Victoria may need this option to be implemented in: Option lead time 15 – 30 years (2031 – 2046) If this option was committed to today, it could be What is the risk of deferring this implemented in: option? 1 – 5 years If this option were deferred certain parts of the Operational life sewerage system could come under undue strain, and performance of the system could decline. The expected operational life of this option (from opening) is: The risk to the State if this option is deferred is: 10 – 25 years Medium Cost certainty The certainty of costing evidence is rated: Low As reviews and audits of water businesses suggest that forward planning is occurring for population growth, this option does not recommend specific capital projects. This option has consequently been understood as an ongoing consideration of the adequacy of planning and the potential for gaps. Annual recurrent cost has been calculated to accommodate periodic review of planning. Costing source Stakeholder consultation

Waste water system augmentation in high growth areas WWS Page 308 Supplement B – Options assessed

Contribution to needs Need 1: Address infrastructure demands in areas with high population growth This option addresses the need for infrastructure in high growth areas by considering where high growth may result in the need for sewerage network or treatment augmentation. This option is considered likely to be required in the future. Recent upgrades to increase capacity and planned future upgrades to assets in the wastewater and recycling networks mean that much of the network is in good or reasonable condition (Deloitte and Aurecon, 2016). Performance of Victorian sewerage networks, as assessed through sewer overflows, is stronger than the national average, with metropolitan systems stronger than regional (Deloitte and Aurecon, 2016). Large gaps in current planning for population growth were not identified during a literature review. For example, Western Water’s jurisdiction contains a number of forecast high growth LGAs. Western Water is planning for population increases of three to four percent per annum, and intends to increase capital expenditure strongly to meet this forecast demand (Western Water 2015). The Essential Services Commission is involved in approving the expansion plans for water utilities, which are audited by the Victorian Auditor General. Neither body has publicised substantial planning gaps. In the future network augmentations are expected to be necessary to meet demand, after the current cycle of network investment and corporate planning has been implemented. At this point, the option is likely to provide a low contribution, but an enabling response, to the need by identifying areas for augmentation. This option has been assessed as providing a 'Very Low / Negative' contribution in years 0 -15, and then a 'Low' contribution in years 15 -30 when planning may need to be undertaken to assess new capacity needs. Metric 1: Ability to improve access to services or increase service capacity for high growth areas This option is not anticipated to contribute strongly to the need, but could enable policy development to improve access to services in the future.

Need 14: Manage threats to water security, particularly in regional and rural areas This option could contribute to the need if the implementation of the option resulted in increased water recycling. This would likely be for non-potable uses and so would require supporting infrastructure for transport to have a contribution to the need. In the future, expansion of wastewater treatment capacity could also include recycling water for potable uses, which combined with the supporting infrastructure to supply water to users, could have a contribution against the need. As these outcomes are uncertain, this option has been assessed as having a ‘Very Low/ Negative’ contribution. The contribution of this option is anticipated to remain consistent across periods. The contribution of this option is anticipated to remain consistent across periods. Metric 1: Reduction in vulnerability of water supply systems to water shortages, that is, supply is sufficient to meet minimum levels of service agreed with water users Implementation for this option in the future could result in a contribution against this metric, however this outcomes is uncertain as sewerage treatment capacity can be addressed without affecting this metric. Metric 2: Increase in the efficiency of irrigation delivery systems This option is not expected to contribute to this metric. Metric 3: Increase total water availability for non-urban water users Implementation for this option in the future could result in a contribution against this metric, however this outcomes is uncertain as sewerage treatment capacity can be addressed without affecting this metric.

Waste water system augmentation in high growth areas WWS Page 309 Supplement B – Options assessed (document 4 of 4)

Waste water system augmentation in high growth areas WWS Page 310 Supplement B – Options assessed (document 4 of 4)

Economic, social and environmental assessment summary This option is likely to have benefits for the resilience of the wastewater treatment network and infrastructure, through assessing network adequacy. As a policy initiative this option could enable other benefits, particularly to air and water pollution, however these have not been assumed as an outcome of the option.

Waste water system augmentation in high growth areas WWS Page 311 Supplement B – Options assessed (document 4 of 4)