Eddington report and Infrastructure Funding cracks
Wednesday’s release of the much anticipated Eddington report has seen many questions asked on the viability of the road tunnel. Analysis of the cost-benefits report show that whilst the rail tunnel will return 1.20 for every dollar spent, the road tunnel will barely come out ahead. $18 billion is required to cover the Eddington plan. Struggles are expected to fund the East-West road link with the lack of exit ramps in the city. Kenneth Davidson commented on Wednesday’s Renegade Economists radio show that this is a typical ‘salami strategy’ to diffuse criticism of the plan and then include the on/off ramps later.
Nowhere in the report was a discussion covered on the economic benefits infrastructure provides to land values. Those lucky enough to own land near an on/ off ramp (or a new train station/ improved services) will be delivered a windfall gain in land values. With the massive infrastructure deficit Victoria, Australia and the world are facing, one wonders how high tolls are to be an effective funding tool with examples such as Sydney’s Cross-City tunnel rendering new services unusable. As this letter by Gavin Putland points out, infrastructure models promoted by Macquarie Bank based on tolls must be reformed to include land value capture funding.
Check this extensive list compiled by the Scottish Government on how land value capture can in fact totally fund infrastructure provision. Minnesota has also recently announced a land value capture study. Make sure you read the Minnesota piece – top investigative journalism.
Analysts of the media game suspect that the current PR lobbying on congestion and lower tolls are a means to soften up the public to allow the smooth passage of this report into legislation, benefiting the biggest financiers, construction companies, lawyers and most of all – landowners in the State.