Senator Rice on the Western Distributor/West Gate Tunnel
Senator RICE: I will start with the Western Distributor, or the West Gate Tunnel as it has now had its name changed to. You just replied to Senator Sterle that you are still waiting on information. Can you tell me what information you have requested from the Victorian government, or the proponents, that you are still waiting on?
Mr Parkinson : We have asked the Victorian government for a number of details about the business case, including some details about the modelling underpinning that business case and some sensitivity tests around the economic analysis for that.
Senator RICE: Can you be a bit more specific about the modelling details that you have requested?
Mr Parkinson : As Mr Davies has indicated, that evaluation is still underway, so—
Senator RICE: Can you be more specific about what you have requested of the Victorian government?
Mr Parkinson : We would prefer not to be.
Senator RICE: On what basis would you prefer not to be?
Mr Parkinson : Because the evaluation is still underway. We are trying to work with the Victorian government to progress that. Obviously, the matters that we have requested are matters of some sensitivity for the Victorian government.
Senator RICE: So you are basically claiming public interest immunity for the request of that information?
Mr Parkinson : For us to undertake our evaluations it depends on a trusting relationship between the proponent and us as the assessor. They provide us information in confidence and we respect that confidence to the extent that we can.
Senator RICE: When did you request this various modelling and the information of the Victorian government?
Mr Parkinson : I think, as we indicated last time around, our last request was in November last year.
Senator RICE: In November 2016. We are now in May 2017. So it is six months on and you have not received that information as yet?
Mr Parkinson : That is correct.
Senator RICE: Do you have an indication from the Victorian government as to whether they are going to fulfil your request and when?
Mr Parkinson : I think Mr Mrdak indicated last time around that the Victorian government is proceeding with that project. They have not indicated to us whether they are keen to proceed with our evaluation of that project, and that is really a matter for them.
Senator RICE: Do you have that certainty from the Victorian government that they are not going to provide you with that information?
Mr Parkinson : No, we do not.
Senator RICE: Do you expect to get that information?
Mr Parkinson : I think, based on the Victorian government's progress in the project, and the time that it has taken, we are not holding our breath. However, if Victoria should choose to come back to us with that information that would be great.
Senator RICE: To me that sounds like it is a concern, if Infrastructure Australia is set up as an independent authority to assess major infrastructure projects, that information is not forthcoming from a project proponent.
Mr Parkinson : I think Mr Mrdak indicated last time that when Victoria made the proposal to the Commonwealth, they were seeking Commonwealth funding at the time. That is why they forwarded the business case to Infrastructure Australia for evaluation. Obviously, the Victorian government has chosen to progress that project regardless of Commonwealth funding. That is really up to them.
Senator RICE: Can you clarify for me: is no Commonwealth funding going into the overall project? Because the project was packaged in the business case with the Monash upgrade as well, my understanding was that there was Commonwealth funding going into the Monash project.
Mr Mrdak : Perhaps if I can assist—that is correct; there is no federal funding allocated to the Western Distributor project.
Senator RICE: In total, so including the Monash—
Mr Mrdak : The first stage of the Monash is being fully funded by Victoria—$400 million worth. The Commonwealth's commitment of $500 million is to subsequent stages of the Monash and not to the initial stage, which is being funded by Victoria's part of this package.
Senator RICE: You can see this is a problem, if Infrastructure Australia are going to do an evaluation of major transport infrastructure needs and even if a project is not being funded by the Commonwealth, that all of the information about that project is not being provided to you. There are various options on the table as to how to meet the infrastructure needs that the West Gate Tunnel is meeting. How can you, as Infrastructure Australia, do an assessment of which is the most appropriate project to meet those needs if the information is not being provided to you?
Mr Davies : We have the same situation for all projects. We are totally reliant on getting good information from mostly state and territory proponents and, occasionally, the private sector. That relies on them providing comprehensive business cases, being collaborative and providing answers to our questions in a timely fashion. That is a normal course of doing business. It becomes particularly challenging when, with that example, there is not any funding being sought. There is no incentive for them to provide the additional information we are providing, so we are caught midway through doing our assessment, which is frustrating from our point of view. We are just totally reliant on receiving the information from whoever is proposing a project.
Senator RICE: Mr Parkinson, you said the reason you cannot tell us any more detail about the modelling that you have asked for is that you have a confidential relationship and you want to have a good positive relationship with the Victorian government. Is that being challenged by the fact that this information is not being provided?
Mr Parkinson : No, we maintain a good relationship with the Victorian government. As I have indicated, it is up to them whether they want to pursue this current evaluation. On current signs, that is not what they are doing, but that is entirely up to them. We do expect to receive other business cases from Victoria in the future and we work to maintain a strong working relationship with them.
Senator RICE: Does Infrastructure Australia have concerns about the adequacy of the business case that has been developed for the Western Distributor ?
Mr Parkinson : We have not been able to finalise our evaluation as yet.
Senator RICE: Do you have concerns as to whether the Western Distributor —West Gate Tunnel—has been evaluated appropriately?
Mr Parkinson : As I have indicated, we are still on the progress of doing that assessment. We are—
Senator RICE: But you are not progressing with the assessment, because you do not have further information. That is what I hear you saying.
Mr Parkinson : That is exactly correct.
Senator RICE: Are you concerned, then, that there will be inadequate assessment of the business case by either yourselves or, indeed, the Victorian government?
Mr Parkinson : We are not able to finish our evaluation as yet, so, obviously—
Senator RICE: And you have no expectation that you will be able to finish your evaluation, because the details of the modelling are not being given to you.
Mr Parkinson : As I said, if Victoria were to choose to come back to us with that information, that would be great. We would be able to able to progress that evaluation.
Senator RICE: Have you had communication with the Victorian government about why they have not decided to furnish you with the details that you have asked for?
Mr Parkinson : We have ongoing conversations with the Victorian government, and—
Senator RICE: That was not my question. My question is about whether you have asked the Victorian government about why they have not been able to furnish you with these details.
Mr Parkinson : During those regular conversations that we have, we have asked whether that information will be forthcoming. They have indicated 'not at present' but they have certainly not ruled it out.
Senator RICE: Have you asked them why that information is not forthcoming at this stage?
Mr Parkinson : No.
Senator RICE: No? What is your understanding as to why the information is not forthcoming?
Mr Parkinson : As I explained, I understand the Victorian government is proceeding with that project.
Senator RICE: Yes, but there seems to be a bit of a lack of curiosity or a lack of questioning as to why that information is not forthcoming. Surely it is useful to Infrastructure Australia. It is pretty clear that you do not expect to receive that information but it would be valuable to you to do an appropriate assessment of the business case. I would be very frustrated if I were in your shoes. Are you frustrated that that information has not been delivered?
Mr Parkinson : We have invested some resources into undertaking that evaluation and, as with all evaluations, we would like to finish it. However, we understand it is entirely up to Victoria as to whether they give us the further information we have required. They have chosen not to do so at this stage. That is their call. We respect them. We want to continue working with them on other projects.
Senator RICE: Are you evaluating other projects that would also be meeting the transport need that the Western Distributor is meeting?
Mr Parkinson : Not at present. We do not have any other business cases from Victoria at the moment.
Senator Rice: But there is the Melbourne Metro Tunnel and you have previously done an assessment of the East West Link. So you completed assessments of those?
Mr Parkinson : Certainly in the last year we completed assessments of Melbourne Metro and the M80 in Melbourne, and also the Murray Basin Rail Project in rural Victoria.
Senator RICE: I am talking about the western corridor that the West Gate Distributor is meeting the transport need for. To me it beggars belief that you can have an organisation like Infrastructure Australia, which is set up to make assessments of the best way of meeting a transport need, and information about a particular project that is set up to meet that transport need is not made available to you.
Mr Davies : We totally rely on the detailed planning that each state and territory government does, particularly for transport planning and land use planning. Most state and territory governments produce their own land use plans, their own integrated transport plans. The way they sequence the projects within those plans is completely at their discretion in terms of what they see as their priorities. Where they are seeking Commonwealth contribution over $100 million, we will often get to see those projects, but those projects are part of a bigger picture and the sequencing of those investments and projects, the way they fit together as part of the broader land use planning, is something completely under the control of the state or territory government.
That is often an area, and right now that is an area, we are asking a lot of questions around, because it is important for us to understand the holistic picture, but once again it is up to them what they send us. We can only evaluate what they send. The extra questions we ask, more often than not, with all these projects are around the bigger picture, because that information is often missing and we need it to understand: how does this fit into the bigger picture?
Senator RICE: Yes, and so that is very much the information that would be relevant in terms of the bigger picture. Having the details that you need to assess the modelling of the Western Distributor would be very relevant for you to be able to put that bigger picture together. Is that the case?
Mr Davies : It is with all projects, yes.
Senator RICE: At Infrastructure Australia initially you were assessing on a project-by-project basis, and now you have this mandate to be having the big picture. If the information is not forthcoming from state governments, doesn't that challenge your ability to undertake that bigger picture work?
Mr Davies : We are very fortunate that when the amendments to the legislation went through in 2014 one of the new requirements of Infrastructure Australia was to do an audit. That has provided us with a great evidence base. That was published in 2015. That has provided a great evidence base to see where the challenges are, at least over the next 15 years. We used that to update the priority list two years ago, and that is still forming the basis for where we see the problems that need to be solved. We have got that big picture, but we are still reliant mostly on state and territory governments to come back with their proposals for solutions. Victoria has come back principally with the Western Distributor project and also the Melbourne Metro Tunnel, which is a very significant project. They are the two solutions we have seen so far proposed by the Victorian government.
Senator RICE: But the Western Distributor is or is not on your priority list?
Mr Davies : It is not directly, but it is part of a bigger road future problem that we need to solve.
Senator RICE: For me, you could not put the Western Distributor on your priority list unless you were confident in the modelling that underpins the whole project.
Mr Davies : Yes, so it is not on the priority list right now. We are still undertaking the assessment. What is on the priority list is the need to provide future capacity and solve congestion problems across Melbourne. That is still a problem we are seeking to solve. The proposal from the Victorian government to partially solve that was the Western Distributor , but it is also important to say that Melbourne Metro is a kind of game changer in terms of rail capacity.
Senator RICE: Absolutely. That is the point I am getting at. There are many ways of meeting that transport need, and I remain to be convinced that the Western Distributor is the best way of meeting that transport need. Do you remain to be convinced of that as well?
Mr Davies : Yes. We are still doing our assessment.
Senator RICE: But your assessment stalled. This is the frustration.
Mr Davies : Hopefully, we will be provided with the information that we have asked for and we can complete the assessment.
Senator RICE: Mr Parkinson just gave me the answer that you do not expect to receive that information.
Mr Davies : That is a matter for the Victorian government.
Senator RICE: Yes, but Infrastructure Australia does not expect to receive the information from the Victorian government that would enable you to do a full assessment of the Western Distributor and to determine whether it is an appropriate project to be supported.
Mr Davies : That is a question that would have to be directed to the Victorian government. I do not know.
Senator RICE: From Infrastructure Australia's perspective, you have a mandate to make recommendations on projects to meet transport needs, and you are currently stalled because you have not been provided with information from Victoria to enable you to make that assessment. Is that the case?
Mr Davies : That is correct.
Senator RICE: I just wanted to clarify in addition to that that one of the pieces of information that you have requested that I understand you still have not received is the independent peer reviews that were undertaken by the Victorian government in their assessment of the Western Distributor . Can I confirm that you still have not got those independent peer reviews?
Mr Parkinson : That is correct. We have received from the Victorian government the panel report into the unsolicited proposal some years ago now. We received that earlier this year. That was in response to our request for independent peer reviews. We have not received any other independent peer reviews. We are not aware of any other independent peer reviews.
Senator RICE: I think we confirmed at a previous estimates session that there was that panel report but there were also independent peer reviews that were done of the transport modelling and the economic modelling, but the Victorian government for quite a while did not even acknowledge that they existed. My understanding is that we confirmed at previous estimates hearings that in fact they did exist and that you had requested those.
Mr Parkinson : We expect that such reports would exist; they would for most projects. We do not know in this case that those reports exist. I think you indicated that your colleague in the Victorian parliament had had a response to a question which might indicate that those reports exist. We are not aware whether those reports exist.
Senator RICE: But you have specifically requested those reports?
Mr Parkinson : That is correct.
Senator RICE: And you have not received a response from the Victorian government. They have not told you they do not exist; they have just not replied to your request.
Mr Parkinson : As I indicated, they have given us a copy of the independent panel report. That is all.
Senator RICE: But that was not what you asked for.
Mr Parkinson : That is correct.
Senator RICE: Thank you.
