Super funds wary of east-west road link
AUSTRALIA'S $1.4 trillion superannuation industry has indicated it will not invest in the proposed east-west link unless the Victorian government can show that the road would be profitable.
AUSTRALIA'S $1.4 trillion superannuation industry has indicated it will not invest in the proposed east-west link unless the Victorian government can show that the road would be profitable.Superannuation funds have provided crucial financial backing to most toll road projects, but in some cases have achieved poor returns on their investment.In a discussion paper to be released today, the Association of Superannuation Funds of Australia signals its uncertainty about investing in the east-west road project because of the challenge in predicting how heavily the road would be used."A challenge for investors in assessing the merits of investing in a future east-west link is that demand for the new road is likely to be highest in peak periods," the paper states."The potential for road users to use other options in non-peak periods makes projecting traffic flows particularly challenging."The east-west link would be an 18-kilometre road joining the Eastern Freeway with the Western Ring Road via CityLink.It would cost an estimated $10 billion to build.Sir Rod Eddington's 2008 transport plan, which proposed building the east-west link as a northern city bypass, found that 60 per cent of traffic that left the Eastern Freeway turned south into the city rather than continuing west to CityLink and beyond.The government has indicated its preference is to build the eastern section first, to fix traffic problems in the east and improve access to the Port of Melbourne.The paper says the superannuation industry has been burnt in the past, when aggressive forecasts by groups bidding to build toll roads have led to overinflated projections of traffic volumes.It proposes establishing an independent body to oversee bids and remove the risk of traffic forecasting errors.