North East Link gets $3.25 billion federal funding boost

The federal government will commit an extra $3.25 billion to developing the North East Link, the blown-out infrastructure project linking major arterial roads in Melbourne.

The boost from the Commonwealth will bring its total contribution to $5 billion for the project, which last year blew out by more than $10 billion from its original cost.

The North East Link under construction in Bulleen.

The additional funds are for the non-tolled components of the project, including the M80 Ring Road upgrades, North East Link connections and the Eastern Freeway upgrades.

The projects will create new lanes, implement smart technology and improve the connection to the North East Link tunnels, the state and federal governments said in a joint statement.

Infrastructure Minister Catherine King said the “missing link” would improve traffic flow across Melbourne.

“Obviously, it’s a toll road, we’re doing the non-toll components – bringing some of those links together,” she told ABC Radio Melbourne on Thursday.

King said the project would take 15,000 trucks off suburban roads, and would get the city moving “as best we can”.

“There’s bits that weren’t funded, and so that’s partly what we’re doing today,” King said.

Prime Minister Anthony Albanese said the boost, which will be included in next week’s federal budget, would ensure the city’s fast-growing north-east had the infrastructure it needed.

He said fixing Melbourne’s freeway network would save commuters more than half an hour on the roads.

The link will be built between the Eastern Freeway and the M80 Ring Road in Greensborough and is expected to open in 2028.

The North East Link – which includes 6.5 kilometres of tunnels – will stretch from Bulleen to Greensborough. It will widen the Eastern Freeway by up to 20 lanes.

Premier Jacinta Allan revealed in December that the 10-kilometre toll road had more than doubled in cost since it was first announced.

The toll road was initially budgeted at $10 billion and reassessed in 2019 at $15 billion. But the government revealed last year that the updated cost estimate was $26 billion.

Interest repayments are expected to hit $8.8 billion a year by 2027, leaving taxpayers on the hook for $16,700 every minute in interest costs alone.

Allan, who oversaw the development of the North East Link as the responsible minister, blamed global economic circumstances, including the pandemic and the war in Ukraine, for the project’s surging cost.

This week’s state budget revealed more than 100 Victorian projects would be delayed as the government tries to protect its bottom line.

Completion dates on schools, health and water infrastructure projects, and even the state’s Big Housing Build, have been delayed.

Victoria is already the most indebted state in the nation. The state’s debt pile is projected to hit $156.2 billion next financial year, rising to $187.7 billion by June 2028.

On Tuesday, Treasurer Tim Pallas said the state would tinker with its infrastructure program in response to increased construction costs and the rising price of materials, labour and transport.

With Kieran Rooney and Broede Carmody

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