Transurban will undertake its second upgrade to the CityLink toll network at a cost of $850 million.
Toll roads operator Transurban will pay for an $850 million upgrade of parts of Melbourne’s congested tollway network.
Transurban said on Monday that it had reached an in-principle agreement with the Victorian government to widen the western section of Melbourne’s CityLink, the Bolte Bridge-West Gate Freeway interchange and Tullamarine Freeway.
“We will be providing $850 million over a two-year time frame,” Transurban chief executive Scott Charlton said.
“We expect construction to begin in mid-year next year (2015), and be completed two years after that.”
Traffic on the western section of CityLink has more than doubled since the road opened in 2000.
The upgrade, which involves 33km of new lanes, will lift traffic capacity on the roads by 30 per cent.
In return, Transurban will benefit from tolls on the increased traffic, its CityLink concession will be extended by one year, and truck tolls will be increased to come in line with the higher truck tolls in NSW and Queensland.
Furthermore, the period in which the CityLink toll price will increase at the greater of 4.5 per cent or the inflation rate, has been extended for a year.
To compensate for the disruption caused to the public by the upgrade, tolls on cars, motorcycles and light commercial vehicles will not be increased during the construction period.
But over the two years following completion of construction, the tolls will be lifted to where they theoretically would have been had the construction not taken place.
“But, obviously, it (the toll roads) will be quite a different amenity afterwards,” Mr Charlton said.
He said the increase in truck tolls was justified by the fact that trucks took up more space on the road and caused greater wear and tear.
Mr Charlton said the upgrade would be the second upgrade of the CityLink network, with Transurban already having completed an upgrade of the southern section.
Transurban had been flagging that it was considering this latest CityLink upgrade, so the cost had already been factored into the company’s capital commitments.
Transurban securities were in a trading halt at 1243 AEST, last having traded at $7.27.