Labor goes to war with Auditor-General over dodgy Transurban deal

THE Andrews Labor Government’s personal attack on the Auditor-General over his report on the dodgy West Gate Tunnel deal with Transurban lays bare Labor’s desperation.

The Victorian Auditor-General’s Office (VAGO)’s report on Market-led Proposals examined the $6.7 billion West Gate Tunnel deal between the Labor Government and Transurban.

This sweetheart deal – which never went to tender and was signed while Treasurer Tim Pallas had shares in Transurban – is a stinker for Victorian motorists.

VAGO found:

• Treasury “did not assess the value” of a key aspect of the deal, “compared to…a competitive process” – meaning that Transurban’s monopoly was not properly challenged;
• The business case “lacked a reasonable justification for including the Monash Freeway widening works in the WGT project scope, and this scope element improved the benefit-cost ratio” – meaning that a separate project was relied on to artificially inflate the benefit of the deal;
• Including the Monash Freeway widening works to assess the WGT project “lacked a convincing rationale and was inconsistent with DTF’s guidelines”;
• The WGT business case did not include appropriate sensitivity analysis;
• The approach to estimating benefits of the WGT used multiple examples of “non-standard benefits”
• The cost-benefit analysis contained “risks of double counting or overstating benefits” and that “this risk was present”;
• “The state risked paying too much for its up-front contribution, and it risked escalating and extending the tolls on CityLink by more than necessary”;
• A questionable discount rate was used to assess the state’s upfront contribution towards the WGT, meaning that the state paid too much;
• The whole basis for the decision to deal solely with Transurban – using tolls to fund the project – was questionable to justify excluding a competitive procurement process; and
• An updated economic assessment report “further demonstrated the marginal value proposition for the WGT on its own” (a level of 1.0).

Comments attributable to Leader of the Opposition, Michael O’Brien:

“This is a damning report that shows the Labor government’s sweetheart deal with Transurban is a rip off for Victorian motorists and taxpayers.

“The West Gate Tunnel doesn’t stack up but Labor has locked Victorians into paying higher tolls to Transurban for decades.”

Comments attributable to Shadow Treasurer, Louise Staley:

“This report shows that Daniel Andrews has used dodgy figures to try to justify a dodgy deal.

“The Treasurer’s disgraceful attack on the Auditor-General – calling him “illogical” and “incoherent” – is a sure sign of a panicked government desperate to cover up its financial mismanagement.

“Victorians already pay the highest taxes in Australia under Labor. Now our tolls will go up massively because Labor puts the interests of Transurban shareholders ahead of Victorian motorists.”

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