‘Ludicrous’: Coalition paid $115,000 a space for car park in Melbourne
The Coalition’s commuter car park fund paid $115,000 a space for a project in the Melbourne suburb of Berwick, which the auditor general found was nearly three times the benchmark price.
Stuart Norman, the chief executive of peak body Parking Australia, has queried the price tag, telling Guardian Australia he can’t see “any logical reason” the project should cost so much.
But the urban infrastructure minister, Paul Fletcher, has defended the 500-car-space project to be built by the Victorian government, citing the state’s assessment it will return $3 for every $1 invested.
On 28 June, the auditor general released a scathing report into the $660m commuter car park program, finding not one of the 47 projects was chosen by the infrastructure department.
Car park sites were instead identified by Coalition MPs and candidates and selected by ministers through a process that “was not demonstrably merit-based”, the report said.
The auditor general found the department briefed then minister Alan Tudge on 9 September 2020, reporting the Berwick project would cost $115,000 a car space, which was 190% above the benchmark.
The minister was advised the cost was above the benchmark and the department would “continue to work with Victoria to understand the market prices and determine any additional funding that may be required”, it said. Market prices “confirmed these costings” but the department “remained concerned”.
On 21 September 2020 the Berwick project was approved, with Victoria to build the car park as part of its level crossing removal project, which the federal infrastructure department noted should result in “delivery efficiencies”.
Victoria later asked for a top-up of funding to build the project as part of an integrated solution with a bus interchange, including demolition of existing car parks, protection of adjacent rail assets, kiss-and-ride facilities, bicycle parking, and improved separation between cars and buses.
On 15 April 2021, the Australian government decided to commit additional funding of $49.2m to the Berwick project, bumping its total price tag to $64.2m. The extra funding was announced in the May budget.
The Victorian transport department later clarified to the auditor general that “while the state proposed to take advantage of efficiencies” in building the car park as part of the level crossing removal project at Clyde Road “these efficiencies are no longer able to be realised owing to delays in the Australian government only confirming its funding for delivery of the project on 28 May 2021”.
Norman said “there doesn’t seem to be any logical reason why those spaces should cost that much [$115,000 a space]”.
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“The cost should have been in the range quoted by the auditor general,” he told Guardian Australia, citing his understanding that there were tender responses that quoted a price that was even lower than that.
Norman has also queried why the federal government’s car parks will not include sensor technology to inform commuters whether spaces are avail
able.
“For the sum these projects are costing – to not include parking technology that assists the commuter is ludicrous,” he said.
“Parking Australia would like to see an independent person appointed to review and manage the delivery of commuter carparks.”
The federal infrastructure department told Guardian Australia the additional funding for Berwick “will support accelerated delivery, in line with the project scope and to facilitate integration with the upgraded bus interchange”.
“The Australian government is not funding the bus interchange.”
A spokesperson for Fletcher said “while the cost of the Berwick [car park] has increased, the Victorian government’s project proposal report showed that the project had a benefit-cost ratio of 3:34”.
“This means that every $1 invested will generate over $3 worth of benefits, which will soon be realised with construction expected to commence in September.”
A Victorian government spokesperson said “the commonwealth’s election commitment is being delivered as part of the Andrews Labor government’s level crossing removal project”.
“Any questions regarding funding of commonwealth election commitments, should be referred to the commonwealth.”
The auditor general found there was no minimum benefit cost ratio for projects in the broader $4.8bn urban congestion fund.
One proposal to upgrade an intersection would return just 3 cents in the dollar, but was approved for $5.4m of spending as the department believed it would have “wider economic benefits”.
The federal Labor opposition has been highly critical of the car park program, describing it as sports rorts “on steroids”, recalling Senate estimates to grill the infrastructure department, and focusing on the Coalition’s failure to consult state and local government.
In May, officials revealed in Senate estimates that the cities references group, an advisory body established in 2017, has not met since February 2019.
The shadow urban infrastructure minister, Andrew Giles, said many of the promised car parks had been-cancelled because Fletcher “couldn’t be bothered speaking with councils, betraying and angering local commuters”.
“But this is par for the course – the Morrison government won’t even meet with its own cities reference group,” he said. “The only people they consult with are Liberal MPs and candidates.”
Giles said Australians deserve “infrastructure funding based on need, and we desperately need a national anti-corruption body”.
On Monday the treasurer, Josh Frydenberg, defended the program, by noting Labor had its own proposed park and ride program, worth $300m.
He said the fund responded to the issue of congestion and the fact nearly 40% of people in Melbourne did not live within walking distance of public transport.
“That is what has been the overriding focus of our infrastructure program and we look forward to delivering those car parks right around the country.”
• This story was amended on 6 July 2021 to correct the statement that the price paid was “almost double” the benchmark price.