BUSINESS CASE EXECUTIVE SUMMARY May 2018 Authorised and published by the Victorian Government, 1 Treasury Place, Melbourne Contents 3 I Background to the North East Link Project 4 I North East Link project overview 7 I Project benefits and costs 7 I Project Objectives and Guiding Principles 8 I Context for the project 12 I Melbourne’s cross-city and orbital connectivity 15 I Identifying the problems 33 I Financial analysis 20 I Confirming North East Link as the right strategic response 34 I Economic appraisal and project BCR 23 I Investigating corridor options 35 I Procurement 26 I North East Link Concept – outcomes, benefits and impacts 36 I Budget and accounting 36 I Risk analysis 37 I Project delivery Finders Street Station, Southbank, Melbourne 1 Background to the North East Link Project The Victorian Government has announced it will to confirm that North East Link is the most build North East Link – completing the ‘missing effective response to these problems. Through link’ in Melbourne’s cross-city orbital road network comprehensive investigation, modelling and between the M80 Ring Road (M80) and the Eastern analysis, the business case recommends a corridor Freeway/EastLink. for North East Link and presents a concept for the project. The project’s anticipated transport The Government’s announcement followed outcomes and benefits are identified and, where Infrastructure Victoria’s nomination of North East appropriate, quantified. Potential adverse social, Link as a high priority infrastructure project for business and environmental impacts are also the state in its 30-Year Infrastructure Strategy, outlined. released in 2016. Infrastructure Victoria noted that the link will enhance access to major suburban The business case reports the results of financial, business and employment centres, improve orbital economic and budget and accounting appraisals road connectivity across Melbourne and boost the of the North East Link Project. It provides the capacity of the city’s freight network. Victorian Government with sufficient information to make investment decisions about the project and In October 2017, the five-year Victorian recommends procurement, funding and delivery Infrastructure Plan confirmed North East approaches. Link as one of several ‘catalyst’, state-shaping infrastructure projects designed to stimulate Following its consideration of the business case, economic growth, create jobs and deliver positive, Victorian Government approval will be required long-term benefits for Victorians. The State Budget for further funding to proceed with and deliver the 2017-18 allocated funding for business case project. development, consultation and route selection for the project. This business case tests the merits of the investment based on a broader assessment of Melbourne’s transport needs, changing travel patterns and the evolving structure of the city. It identifies the problems facing the city’s transport network and the benefits of addressing these problems, with a focus on cross-city orbital Independent connectivity and capacity constraints. A range of infrastructure potential actions and investments are examined advisors have named North East Link as Victoria's priority road infrastructure project. Executive Summary Business Case - May 2018 I 3 2 North East Link will connect with Melbourne’s North East Link will unlock the currently existing freeways, allowing for freeway-standard poorly connected asset of the Eastern Freeway, orbital movements around Melbourne, starting maximising freight efficiency throughout the from Altona and ending in Frankston. For the first region. It will connect the Eastern Freeway to the time, Melbourne will have a fully connected orbital M80 and Hume Freeway, creating a continuous freeway network that will provide continuous traffic freeway-standard road for freight, drawing trucks North East Link project overview flow conditions for long distance travel across and away from the arterial road network and reducing through Melbourne, with links to key parts of the pressure on the M1 corridor. As defined in the concept developed for the project Modernisation of the Eastern Freeway is a core arterial road network. (detailed in Chapter 6 of the business case), the element of the project to ensure the freeway proposed North East Link will begin on the Eastern integrates effectively with North East Link and Freeway at Springvale Road before connecting via a keeps pace with changing travel demands. The new 11-kilometre roadway to the M80 Ring Road at modernisation will include widening of the freeway Greensborough, with upgrades to the M80 between between Chandler Highway and Springvale Road, A fully connected orbital freeway from Altona to Frankston Calder Fwy Greensborough and Plenty Road. and provide for the Doncaster Busway (featuring Donnybrook Rd Plenty Rd Epping Rd Lancefield Rd Lancefield elba Hwy dedicated bus lanes creating an uninterrupted path Mickleham Rd The new roadway will extend from the Eastern Riddle Rd M for bus services travelling between the eastern Freeway at Bulleen to the eastern end of the M80. Craigieburn Rd Gisbourne-Melton Rd Hume Hwy suburbs and the central city). The Eastern Freeway Diggers Rest-Coimadai Rd The northern section of the roadway will run at Somerton Rd will not be tolled. Yan Yean Rd EPPING surface before descending into a cutting south of Hume Fwy Tullamarine Fwy Melbourne Airport etrpolitan ng Rd Plenty Rd Maroondah Hwy Watsonia Station and then into twin three-lane North East Link will be tolled and the project Camp Rd M Ri Melton Hwy Calder Fwy Sydney Rd BUNDOORA ELTHAM Western Fwy SYDENHAM tunnels just north of Lower Plenty Road. It will includes the infrastructure and systems required GLENROY RESERVOIR Essendon Airport Western Ring Road Murray Rd then transition to a viaduct structure just north of to support tolling. The project also incorporates Bell St Main Rd CityLink ST ALBANS Buckley St ROSANNA Koonung Creek to connect to the Eastern Freeway. dedicated, end-to-end Intelligent Transportation Station Rd Brunswick Rd St Georges Rd Hopkins Rd SUNSHINE DONCASTER Connections will be provided to the new roadway at Systems (ITS) (including along the Eastern Eastern Fwy BALWYN Eastern Fwy FOOTSCRAY RINGWOOD Ballan Rd KEW Maroondah Hwy BOX HILL Greensborough Bypass, Grimshaw Street, Lower Freeway) to enable North East Link to operate as a CBD RICHMOND West Gate Fwy Canterbury Rd Canterbury Rd Riversdale Rd CityLink Plenty Road and Manningham Road. Managed Motorway and integrate effectively with PORT MELBOURNE Derrimut Rd Toorak Rd Mountain Hwy Palmers Rd BAYSWATER High St ST KILDA Burwood Hwy Scoresby Rd connecting freeways and arterial roads. LAVERTON WILLIAMSTOWN High Street Rd Burke Rd Blackburn Rd Heaths Rd Princes Fwy CAULFIELD BORONIA Springvale Rd Plenty River GEELONG North Rd EastLink Nepean Hwy Monash Fwy Centre Rd M80 North East Ring Road Warrigal Rd Wellington Rd Princes Hwy Stud Rd South Rd Clayton Rd BUNDOORA Link Concept: Princes Fwy GREENSBOROUGH North East Link NOBLE PARK Heatherton Rd Grimshaw St Minimum length tunnel sections and Balcombe Rd Interchange MENTONE DANDENONG Chandler Rd Plenty Rd Eastern Freeway upgrades connections Watsonia Rd WATSONIA Springvale Rd Elder St Greens Rd Yallambie Rd Hallam Road South Edithvale Rd Frankston Fwy South Gippsland Hwy Pakenham Rd y MACLEOD w H YALLAMBIE h g Princes Hwy u o r o EastLink Nepean Hwy b Clyde Rd s n North East Link Thompsons Rd e d e ty R r len G P Princes Fwy r ROSANNA we PRESTON Lo Orbital Freeway Network Dandenong Hastings Rd VIEWBANK r e v i R Ballarto Rd a Urban Growth Boundary r r a Peninsula Link Bell St Y Skye Rd HEIDELBERG Ballarto Rd Rosanna Rd FRANKSTON Koo Wee Rup Rd k owe Rd Fitzsimons Ln e lest e p r em C T i Reynolds Rd r Banksia St r e NORTHCOTE d M St Georges Rd R g M r a e nn b in l gh e am d R i d e H r e d R w o BULLEEN L n e e l l u B IVANHOE EAST DONCASTER C ha BALWYN nd NORTH le Rd r er Hw st y nca Eastern Do Freeway DONVALE Eastern Burke Rd Freeway Springvale Rd Princess St Hoddle St BOX HILL EastLink y NORTH w Station St H h a d MELBOURNE Middleborough Rd n For the first time, Melbourne oo ar M will have a fully connected orbital freeway network. 4 I Executive Summary Business Case - May 2018 Executive Summary Business Case - May 2018 I 5 The project also includes: 3 Project benefits and costs Works on the M80 Maintenance of and improvements to local access for communities 1.3 BCR between Plenty Road and adjacent to North East Link and the Eastern Freeway, including new Estimated project benefits Greensborough local roads, intersection reconfigurations and land bridges Total benefits after Total benefits for Benefits minus Total benefits over Boost to North and discounting to freight users after costs after 50 years without Eastern Metro Gross today’s value discounting discounting discounting Regional Product $10.9B $4.1B $2.2B $103.5B $7.5B Estimated project cost (total project risk adjusted capital cost) Real P50 ($b) Real P90 ($b) Nominal P90 ($b) Upgrades to Bulleen Road New walking and cycling paths along North East Link and the 11.9 12.7 15.8 Eastern Freeway, and completion of the 100-kilometre continuous ring road cycling trail 4 Project Objectives and Guiding Principles Upgraded and new noise A Freeway Control Centre for A high-quality approach to barriers to meet VicRoads’ controlling traffic on the new landscaping, architecture and The North East Link Project has a strong focus on supporting business and jobs growth in Melbourne’s traffic noise standards for new link and managing roadway urban design. north, east and south east, while also improving cross-city connectivity and helping to address critical traffic, freeways operations freight and amenity issues.