The Coalition’s entire infrastructure program could be subject to an independent investigation after the Labor party requested an audit into claims that the handling of Melbourne’s East West Link project reflected “systematic failures”.
Labor’s call follows a scathing report by the Australian National Audit Office (ANAO), which found the Abbott government had inflated the deficit during its first year in power by transferring $1.5bn to Victoria for the now-scrapped tollway project despite “clear advice” that the payments were premature.
The party’s infrastructure spokesman, Anthony Albanese, wrote to the ANAO on Wednesday to ask for a review of problems with other big-ticket projects including “the collapse of the Perth Freight Link in the courts and the massive blowout on WestConnex [in Sydney] from $10bn to $16.8bn”.
Albanese, who successfully requested the earlier East West Link investigation, said a wider audit was needed because of a systematic failure with the infrastructure program announced in the Coalition government’s first budget.
“It also appears to be the case that what all these projects have in common is a breakdown in proper analysis and a move away from the evidence-based policy approach that was established under Infrastructure Australia to ensure the most appropriate allocation of commonwealth resources,” he said in a letter to the auditor general, Grant Hehir.
The future of the $1.6bn Perth Freight Link was thrown into doubt last month when the Western Australian government lost a court challenge against part of the project based on flaws in the environmental assessment processes.
Western Australia’s chief justice, Wayne Martin, found the state environment minister’s decision to allow a proposal to extend the Roe Highway was “invalid” because it relied upon a report by the Environment Protection Agency that “took no account of its own published policies”.
The Abbott government pledged in the May 2014 budget to contribute $925m towards the project. A month later, the WA parliamentary secretary for transport, Jim Chown, told a parliamentary committee the federal government had “a propensity to make these announcements” but “at this stage we have not actually got design plans that are worthy of public scrutiny”.
Albanese highlighted the comments in his letter to the ANAO. He said the 33km WestConnex project in Sydney – designed to link the M4 with the M5 – also deserved scrutiny because of cost increases and advance payments similar to the ones associated with the East West Link.
A report in 2012 suggested the total capital costs for WestConnex would be about $10bn, which was revised up to $11.5bn the following year. In November 2015, the New South Wales and federal governments said “enhancements to the original WestConnex design” were responsible for the cost increasing to $16.8bn.
The federal government is providing a concessional loan of up to $2bn to accelerate delivery of the second stage, in addition to $1.5bn in federal funding already allocated to the project.
The NSW minister for roads, Duncan Gay, defended the project on Wednesday, saying the new cost reflected changes to the design. “This is a road that is going somewhere and it’s helping this city,” he told Channel Nine News.
The ANAO report on the East West Link shone a spotlight on national planning processes for major projects. In the report, published last month, Hehir said the funding was approved despite departmental warnings that neither stage of the project had proceeded through a full assessment of its merits.
Hehir is yet to respond to Albanese’s latest audit request, but he is already familiar with WestConnex. Hehir examined aspects of the project in his former capacity as the New South Wales auditor general in 2014, when he found “shortcomings” in the level of independent assurance provided to the state government.
The ANAO was also asked to examine the consequences of the Turnbull government earmarking $18m to a potential advertising campaign about transport infrastructure.
Albanese suggested the advertising was “merely to promote the government’s political interests in an election year”. But a spokesman for the deputy prime minister, Warren Truss, said market research had found people “were interested in knowing more about the Australian government’s investment in transport infrastructure”.