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Summary of document

Background to the North East Link Project

The Victorian Government has announced it will build North East Link – completing the ‘missing link’ in Melbourne’s cross-city orbital road network between the M80 Ring Road (M80) and the Eastern Freeway/EastLink.

The Government’s announcement followed Infrastructure Victoria’s nomination of North East Link as a high priority infrastructure project for the state in its 30-Year Infrastructure Strategy, released in 2016. Infrastructure Victoria noted that the link will enhance access to major suburban business and employment centres, improve orbital road connectivity across Melbourne and boost the capacity of the city’s freight network.

In October 2017, the 5-year Victorian Infrastructure Plan confirmed North East Link as one of several ‘catalyst’, state-shaping infrastructure projects designed to stimulate economic growth, create jobs and deliver positive, long-term benefits for Victorians. The State Budget 2017-18 allocated funding for business case 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 connectivity and capacity constraints. A range of potential actions and investments are examined to confirm that North East Link is the most effective response to these problems. Through comprehensive investigation, modelling and analysis, the business case recommends a corridor for North East Link and presents a concept for the project. The project’s anticipated transport outcomes and benefits are identified and, where appropriate, quantified. Potential adverse social, business and environmental impacts are also outlined. The business case reports the results of financial, economic and budget and accounting appraisals of the North East Link Project. It provides the Victorian Government with sufficient information to make investment decisions about the project and recommends procurement, funding and delivery approaches.

Following its consideration of the business case, Victorian Government approval will be required for further funding to proceed with and deliver the project.

The Business Case Executive Summary includes the following topics:

• North East Link project overview
• Project benefits and costs
• Project Objectives and Guiding Principles
• Context for the project
• Melbourne’s cross-city and orbital connectivity
• Identifying the problems
• Confirming North East Link as the right strategic response
• Investigating corridor options
• North East Link Concept – outcomes, benefits and impacts
• Financial analysis
• Economic appraisal and project benefit cost ratio (BCR)
• Procurement
• Budget and accounting
• Risk analysis
• Project delivery

Structure of the business case

This business case has been prepared by the North East Link Authority (NELA), with the assistance of the Coordinator General (Major Transport Infrastructure Program), Transport for Victoria, relevant Victorian Government departments and agencies, and technical, financial and legal advisers.

The business case comprises 14 chapters across four sections, and 26 appendices.

Section 1: Melbourne’s orbital mobility challenge

Chapter 1 – Context

Discusses Melbourne’s advantages and attributes, and the role of transport in a changing and growing city. Explores cross-city orbital connectivity issues in Melbourne and outlines the Victorian Government’s response to these issues.

Chapter 2 – Problem

Identifies and analyses significant problems arising from poor cross-city orbital connectivity. Describes how the future will look if these problems are not addressed.

• Appendix A ILM and BMP (PDF, 884.4 KB)
• Appendix B Legislation and Policy Context (PDF, 964.9 KB)
• Appendix C Transport Assessment – Existing Conditions and Future Base Case Report (PDF, 24.0 MB)

Chapter 3 – Benefits

Describes anticipated benefits from addressing the problems identified in Chapter 2 and the importance of these benefits to the economy, businesses, households and government. Identifies Project Objectives and Guiding Principles.

Chapter 4 – Strategic response

Examines a range of strategic options and tests how effective they would be in addressing the problems identified in Chapter 2. Confirms a connected freeway (North East Link) as the core element in the most effective strategic response to address the problems.

Section 2: Options

Chapter 5 – Project options analysis

Identifies four broad corridor options for North East Link and evaluates these against the Project Objectives and Guiding Principles. Recommends a corridor option that best addresses the problems arising from poor orbital connectivity, most effectively meets the Project Objectives and minimises impacts.

• Appendix D Options Assessment Report (PDF, 3.6 MB)
• Appendix E Community Engagement Report 2017 (PDF, 1.7 MB)

Section 3: The North East Link

Chapter 6 – The solution

Presents the North East Link concept (the proposed project base scope). Identifies the minimum infrastructure required to meet anticipated demand, based on a comprehensive ‘optioneering’ process and engineering and other technical studies. Outlines potential complementary projects that could be delivered alongside North East Link.

• Appendix G Preliminary Environmental Assessment Report (PDF, 934.9 KB)
• Appendix H Preliminary Social and Business Report (PDF, 808.1 KB)
• Appendix I Complementary Projects (PDF, 2.1 MB)
• Appendix J Concept Summary (PDF, 4.6 MB)
• Appendix K Transport Assessment – Project Case Report (PDF, 9.1 MB)

Chapter 7 – Transport outcomes

Reports the results of the transport impacts assessment conducted for the business case.

Chapter 8 – Benefits and impacts

Describes how the concept meets the Project Objectives and its potential benefits and impacts.

Chapter 9 – Financial analysis

Reports the results of the financial analysis conducted for the business case. Outlines funding requirements and options.

• Appendix M Financial Analysis Report
• Appendix M1 Strategic Tolling Report
• Appendix N Cost Estimate Report
• Appendix O Risk Summary
• Appendix P Independent Cost Review Report

Chapter 10 – Economic appraisal

Reports the results of the economic appraisal conducted for the business case, including the cost benefit analysis.

• Appendix Q1 Economic Appraisal
• Appendix Q2 Assessment of Potential Land Use Impacts
• Appendix R Traffic Modelling Report (PDF, 23.1 MB)

Section 4: Taking action

Chapter 11 – Procurement

Identifies and analyses potential procurement options for North East Link. Recommends a packaging and procurement solution, including an approach to delivering the tolling system.

• Appendix S Procurement Analysis (PDF, 2.0 MB)

Chapter 12 – Budget and accounting

Reports the results of the budget and accounting analysis conducted for the business case. Presents preliminary budget impacts on the State’s balance sheet and operating statement.

• Appendix T Preliminary Accounting Advice

Chapter 13 – Risk analysis

Describes the project’s risk profile and identifies and quantifies key risks.

Chapter 14 – Delivery and implementation

Sets out the implementation plan for North East Link, including recommended governance arrangements, statutory approvals pathway and stakeholder engagement and communications. Provides an indicative timeline and milestones for the North East Link Project.

• Appendix U Stakeholder and Community Engagement Plan (PDF, 1.1 MB)
• Appendix V Approvals Pathway Report (PDF, 807.6 KB)