Background to the Perth
Freight Link project
provides an overview of the proposal and benefits of the Perth Freight Link
project, as described by its proponents, namely the Commonwealth and state
First, it gives
an overview of the project as announced in the
2014-15 Commonwealth Budget and in the subsequent Business Case Executive
Summary. It then considers how project would be funded, including looking at
both the Commonwealth and state contributions to capital costs, and costs that
will be recouped by the state by the introduction of tolls. It also sets out
the proposed economic and other benefits of the project as stated by its
chapter looks at the implementation plan for the Freight Link, the approvals
process it is subject to, and delays caused by High Court challenges to the
environmental and heritage outcomes of the first stage of the project.
draws mainly on information from the Commonwealth Department of Infrastructure
and Regional Development (the department), and material published by the
Western Australian government on the websites of its agencies, particularly
Main Roads WA. This includes the Executive Summary of the Business Case for the
Freight Link that was publically released in December 2014.
Overview of the project
Funding for the
Perth Freight Link was announced by the Commonwealth Government on
19 May 2014 as part of the Infrastructure Growth Package in the
$260.8 million was committed by the Commonwealth on 12 April 2016 for
tunnelling some of the Perth Freight Link's route.
provides a broad overview of the Freight Link project on its website:
project will provide a direct free flowing connection between the Roe Highway
and the Port of Fremantle providing improved capacity for heavy vehicle freight
movements to and from the Port. The project will complement the Australian
Government investment in projects such as Gateway WA and NorthLink WA (which includes
the Tonkin Highway Grade Separations and the Swan Valley Bypass). Together,
these substantial network improvements will establish the Roe Highway as the
preferred east-west freight route into the Port of Fremantle. This in turn will
remove the number of heavy vehicles using the Leach Highway which will reduce
commuter congestion on this route.
the submission made to this inquiry by the department, the Freight Link project
would be delivered in three stages:
Section 1 –
Roe Highway Extension;
Section 2 –
Stock Road and Leach Highway upgrade; and
Section 3 – Roe
Highway pinch point widening.
Case Executive Summary states that the first stage of the project, the Roe 8
extension, would be constructed over 2016-17, with the other sections of the
project scheduled to be completed over 2018-19.
stage: Roe Highway Extension (Roe 8)
The Roe 8
stage of the Freight Link would see a 5.2 kilometre extension of the
Roe Highway from its current terminus at the Kwinana Freeway in Jandakot, to
Stock Road in Coolbellup (see Figure 1).
This link would be a four-lane dual carriageway and include a number of
the Roe 8 extension pre-date the announcement of the more ambitious Freight
Link project. Main Roads WA claim:
was originally identified in the Stephenson Hepburn Plan of the 1950s and has
been included in all subsequent state government land use and transport
planning activities. Taking into account public scrutiny and consultation, the
route has been retained by every successive WA government as an integral part
of the State’s arterial road network.
2013 election, which saw his government returned to office, the Hon Colin
Barnett, the Western Australian Premier, stated that the Roe 8 extension would
not be undertaken during the 2013-17 term of office.
stage: Stock Road and Leach Highway upgrade
stage of the Perth Freight Link Project would see upgrades to Stock Road, the Leach
Highway and High Street Fremantle (see Figure 1), as outlined by the
reference design is for an upgraded route along Stock Road from the Roe Highway
Extension to the Leach Highway, then along the Leach Highway, High Street and
the Stirling Highway as far as Marmion Street. Improvements will include grade
separations, intersection improvements and widening.
department submitted that details of this stage of the project have not yet
been confirmed, and that an alternative option for tunnelling part of the route
is currently being investigated. The April 2016 announcement of
additional federal funding for tunnelling certain stages of the route seems to
indicate that work on this has been investigated and costed by the Commonwealth
and state governments.
section: Roe Highway pinch point widening
The project would
also see the widening of a section of the existing Roe Highway between the
Tonkin Highway and Welshpool Road, to alleviate a potential pinch point on the
heavy vehicle charging network that would be introduced as part of the Freight
Heavy Vehicle User Charge
Plans for the
Freight Link also include the introduction of a Heavy Vehicle Charge to recoup
some of the capital cost of the project.
The department informed the committee that, given Western Australia currently
has no toll roads, the introduction of a user-pays system represents a
'significant change to the delivery of infrastructure projects in Western
The charge would
be collected from all heavy commercial vehicles, apart from buses, across an
85 km stretch of road between Muchea and Fremantle Port, including the
Freight Link (see figure 2).
It would be collected by a GPS system and charged by distance travelled on the
network. The Business Case Executive Summary states that the rate has not yet
been determined, but:
principle of the charge is that it will be on a 'win-win' basis. That is the
charge will be less than the productivity benefits available from the Heavy
Vehicle Charging Network.
costs and funding
Case Executive Summary estimates that the total capital cost of the Perth
Freight Link would be $1.575 billion (discounted to represent
This breaks down to $1.507.9 billion for roadwork construction and
$67.1 million for implementing the Heavy Vehicle Charging
Australia provided a different estimation of total expenditure for the project,
at $1.742 billion (nominal, undiscounted).
estimates are based on different underlying assumptions in the cost-benefit
analyses undertaken for the Business Case on one hand, and by Infrastructure Australia on the
other. The department clarified that the total expenditure outlined in the
Business Case Executive Summary was based on a P50 cost estimate (i.e. assuming
there is a 50 per cent probability that the total cost of the project
would not be exceeded).
This means that it differs somewhat from Infrastructure Australia's estimate
that was based its estimate on a P90 calculation (i.e. assuming a 90 per cent
probability that the total cost would not be exceeded).
and state government contributions
Freight Link is to be co-funded by the Commonwealth and Western Australian
governments. The Business Case Executive Summary states that the Commonwealth
would provide 59 per cent of the capital costs of the project, with the
remainder being covered by the state government.
2014-15 Budget the Commonwealth Government committed $866 million of new
funding to the Freight Link, noting this took the 'total Federal investment in
the project to $925 million'.
According the department, this total funding commitment included
$59 million earmarked for Leach Highway/High Street Fremantle upgrades in
the 2013-14 Budget.
Australian government contribution to the Freight Link is outlined in the State
The state government is responsible for providing 17 per cent of the total
funding for capital works, as well as for carrying the demand risk for the
that in the early stages of the project the Western Australian government is
contributing $650 million to the Freight Link, comprising of '$591 million
in new funding, plus $59 million previously committed for upgrades on High
Part of Western Australia's contribution to funding the Freight Link project would
be recouped through the introduction of a Heavy Vehicle Charge (discussed
announcement of the Freight Link, the Commonwealth and Western Australian governments
agreed to co-fund upgrades to Leach Highway/High Street Fremantle. The
Commonwealth contribution to these upgrades was originally announced as part of
the Labor government's Nation Building 2 program in the 2013-14 Budget.
estimated cost of these works was $118 million, shared equally between
Commonwealth and state, with the state responsible for any over-budget
This funding has been incorporated into the proposed expenditure for the
of Commonwealth funding
the department, no federal funding would be delivered for the Freight Link
project until the Western Australian government has submitted detailed project
proposals to the Commonwealth.
This includes the funding allocated in the 2013-14 Commonwealth Budget for
Leach Highway/High Street Fremantle upgrades.
was reported in early December 2015 that the Turnbull government has approved
$300 million to be provided to the state government to start construction on
the Roe 8 stage of the Freight Link.
It is not clear to the committee whether this funding has been delivered. It is
also not clear whether the state government has provided a detailed project
proposal to the Commonwealth, as stipulated by the original conditions of
funding for the Freight Link, noting that the state government has announced
the deferral of stage 2 of the project for at least one year.
funding recouped through the Heavy Vehicle Charge
Case Executive Summary estimates the Heavy Vehicle Charge will recoup
$374.5 million of the original investment made by the state government,
while acknowledging that the rate of this charge has yet to be formally
submitted there may be an opportunity for the state government to privatise the
Heavy Vehicle Charge infrastructure in the future:
state government will initially provide the funding to be recovered from the
heavy vehicle user charge (and will accept the associated revenue risk), there
is potential for the state to sell the rights to the user charge revenues to a
private sector operator once traffic flows are established, allowing the sales
revenue to be recycled into other economic infrastructure.
benefits of the Perth Freight Link
and Western Australian governments have stated that the Freight Link would be
of significant benefit to the freight industry and the Western Australian
economy more generally. Moreover, they also claim that the project would
deliver other benefits to road users and residents of Perth.
benefits and business cost ratio
department has outlined the general economic benefits of the project to the
Freight Link is expected to establish the Roe Highway as the preferred
east-west freight route by reducing transport costs and improving efficiency in
heavy vehicle movements and freight access to Fremantle Port from Kewdale. It
will service both the existing Inner Harbour and the proposed future Outer
Harbour at Kwinana. An extension of the Roe Highway and improvements to Stock
Road and High Street will further build on the travel time savings that will be
realised as a result of the construction of Gateway WA and NorthLink WA (which
includes the Tonkin Highway Grade Separations and the Swan Valley Bypass). This
will provide a significant benefit for the freight industry as a result of
significantly more efficient east-west freight movements along the Roe Highway
into and out of the Port of Fremantle.
Case Executive Summary for the Freight Link stated the project was
'economically viable', with a base business cost ratio (BCR) of 2.8:1. This
stated the major benefit of the project would be from:
...a 9 ½
minute travel time saving and a $8.15 saving per trip for freight vehicles
(Kwinana Freeway to Fremantle).
Case Executive Summary included a table that disaggregated the underlying
methodology and assumptions of the BCR (see figure 3). This table included the
estimate that the benefit of the 9.5 minute travel time savings for vehicles
would accumulate to around $2.469 billion in total.
Infrastructure Australia estimated the Freight Link would deliver a BCR of 2.5:1,
based on a P90 cost estimate at a discount rate of 7 per cent.
Infrastructure Australia also clearly stated some other assumptions that
informed this BCR estimate:
estimated for this stated BCR exclude costs associated with the heavy vehicle tolling
system thereby underestimating capital costs but included a CPI adjustment for
the real capital cost estimates thereby overestimating capital costs. Including
these offsetting cost impacts, consistent with Infrastructure Australia and
National Transport Guidelines, this
would result in the BCR remaining at 2.5:1.
Case Executive Summary provides a more detailed outline of the project's
benefits, both for the freight industry and for the community more generally:
tangible terms the purpose built freight route will:
traffic lights resulting in less delay and frustration for heavy vehicles;
the community by having 500 fewer trucks per day on sections of Leach Highway
by 2031, reducing noise and increasing mobility by removing slower vehicles
from the road; and
access to the Murdoch Activity Centre and Fiona Stanley Hospital.
Western Australia has set out a much more comprehensive list of the Freight
Link's potential benefits, namely:
safety for all road users.
a forecast 5,000 heavy vehicles per day will be removed from Perth’s southern
urban arterial road network (such as Leach Highway, Farrington Road, North Lake
Road, South Street and Beeliar Drive), as a result of Roe 8.
current sets of traffic lights to be eliminated or bypassed, resulting in
reduced free flowing vehicle movement with shorter journey times, cutting
congestion and the current patterns of 'stop-start' traffic.
operating costs for transport industry, business and commuters through freer
flowing traffic movement.
benefits through non-stop traffic movements, resulting in lower fuel use, less
exhaust emissions and reduced noise levels.
400ha of native vegetation is to be purchased as an environmental offset.
to deliver CO² equivalent savings of nearly 450,000 tonnes by 2031.
projections show a $2.80 return for every dollar invested, representing a $3.9
billion return for the State.
to create 2,400 direct jobs and many more indirect jobs during the life of the
access to Kwinana Freeway, Bibra Drive, North Lake Road and Stock Road for road
users and residents in the cities of Cockburn and Melville.
access to the Fremantle inner harbor.
access for the proposed Fremantle outer harbor and the expanding Kwinana
department has also outlined the benefits of the Freight Link reducing
congestion in suburban areas:
project is also expected to reduce freight traffic and congestion on local
arterial roads, resulting in improved safety, reduced noise and enhanced
amenity, with 500 trucks per day removed from sections of the Leach Highway by
2031. The project will also provide a more effective southern connection to the
Murdoch Activity Centre, which will address local traffic pressures as the
Fiona Stanley Hospital progressively opens.
of the Freight Link
Australia's assessment of the full Business Case for the Freight Link noted in May
project is still at early phases, so much of the work relating to
deliverability has yet to be completed, including the detailed design, so risk
assessments as well as other material, such as construction timelines are
preliminary. Once the tender process for the road construction is completed,
anticipated to be by
the end of 2015, the proponent will be able to provide more detail.
Case Executive Summary provided an overview of the implementation plan for the
Freight Link project (see figure 5).
Main Roads WA
also provided an overview of the next stages of the Freight Link project on its
website. In late-October 2015, this overview included information that
suggested tendering processes were already well-underway for all stages of the
Freight Link project:
contracts (Roe 8 and Section 2) for the Perth Freight Link project are
scheduled to be awarded in late in 2015, with infrastructure work expected to
commence in early 2016 and to be completed in 2019. Construction of the Perth
Freight Link is subject to environmental approval.
section of the Perth Freight Link (Roe 8) will provide improved access into the
Murdoch Activity Centre, including Fiona Stanley Hospital in the first half of
section will see widening of a 1 km pinch-point section of Roe Highway between
Tonkin Highway and Orrong Road. Tenders for Section 3 will be called at
the end of August under a separate construct-only contract, with award in late
2015. Construction of Section 3 is expected to be completed by end of
Main Roads WA
outlined the procurement process on their website:
proponents have been invited to participate in the Request for Proposals (RFP)
phase of the Perth Freight Link project.
will be sought for two sections as follows:
8 – a 5km extension of Roe Highway (Stage 8) from Kwinana Freeway to just west
of Coolbellup Avenue; and
2 – upgrades to Stock Road, Leach Highway, High Street and Stirling Highway,
consortia comprise the following experienced teams:
Contracting, Laing O’Rourke, Arup and Jacobs
Brierty, WSP/Parsons Brinckerhoff and Hyder
Contractors, Georgiou, GHD, AECOM, BG&E and WA Limestone.
consortia were chosen following the evaluation of Expressions of Interest (EOI)
applications which were submitted in March 2015. The consortia will now
participate in the RFP stage of the procurement process and prepare detailed
proposals for design and construction.
October 2015 the Western Australian government awarded the contract for the
Roe 8 highway stage of the Freight Link (stage 1) to the consortium headed
by Leighton Contractors, which also includes civil infrastructure company the
Georgiou Group, as well as GHD, AECOM, WA Limestone, and the civil and
structural engineering consultants BG&E.
Section 2 of the Freight Link, in late October 2015 Main Roads WA indicated
there had been no definite route set for the Stock Road works:
for Section 2 are being asked to conduct a feasibility study for an alternative
route, which includes a tunnel option, during the RFP stage. The feasibility of
an alternative route for PFL Section 2 will be considered against
environmental, economic and social impacts measures.
Main Roads WA
stated that the procurement process would be finalised by the end of 2015, with
alliance contracts being awarded 'in October 2015 for Roe 8 and in
December 2015 for Section 2'.
it appears that there is some uncertainty over the progress of the second stage
of the project. On 1 November 2015, the Western Australian Premier, Mr Colin
Barnett, confirmed the plans and tendering process of the Stock Road phase of
the Freight Link would be deferred for at least one year, saying:
see where we're at in 12 months' time, but for the moment all of our effort is
Roe 8, the rail line to the airport and Forrestfield and the Swan Valley
bypass. They are the highest priorities... They are more important and they're
happening first. They're the ones that we're ready to go on...
about to rush into a decision on a link from the end of Roe 8, yet to be built,
to the Fremantle Port. Because it's incredibly complicated, incredibly expensive
for what it does...We've also got one eye firmly on the construction of an outer
harbour at Cockburn so the decision will also be influenced by that.
understands that no Commonwealth funding has been delivered for any stage of
the Freight Link project, despite the tendering process having commenced in
early 2015 and being well underway in late 2016. The department commented that
the opportunity to refine the project design and sharpen the cost estimates in
the competitive market environment. While the Australian government funding has
been committed, the final step to allow the payment of funds to be approved is
for Western Australia to submit detailed project proposals. This will be based
on the extensive development work that has been undertaken.
of the Perth Freight Link project was subject to an approvals process that
included assessment by both Commonwealth and state government agencies. These
processes are outlined in turn, and include the project's evaluation by:
Commonwealth portfolio environment departments; and
Australian Department of Aboriginal Affairs.
The board of
Infrastructure Australia evaluated a submission on the Perth Freight Link made
by the Western Australian government on 7 May 2015.
On 7 August 2015 Infrastructure Australia published the findings of
this assessment on its website, alongside five other briefs on projects
assessed by the board in the same quarter.
Infrastructure Australia's overall assessment of the project found:
Australia considers that the proponent has provided good evidence that access
to port gateways in Perth is a nationally significant problem. In addition,
Infrastructure Australia has a high level of confidence that the proposed
solution will deliver net economic benefits.
Link project was placed on the Infrastructure Australia list with the rating of
'Threshold'. Infrastructure Australia state that projects given this rating:
strong strategic and economic merit, and are only not ready to proceed due to a
small number of outstanding issues.
Infrastructure Australia assessment expressed some concerns about the estimated
capital costs and economic benefits of the Freight Link:
stage of the project indicates that there are significant risks around
estimated costs. There are also risks to benefits depending on the timing and
extent of transition to the Outer Harbour, south of Perth. While these risks
are likely material for gains for heavy vehicles, they are likely of an order
of magnitude smaller for the overall benefits of the project. This is because
only a small part of benefits (9%) accrue to heavy commercial vehicles.
transport modeling that underpins the economic appraisal of the project does
not allow for inducement of additional traffic as a result of lower costs of
Infrastructure Australia noted other risks to the Freight Link, particularly
regarding environmental approvals and lack of community support:
risks for the project include costs, environmental approvals and community
support. The most contentious component of the project from an environmental
and community perspective is likely to be the extension of Roe Highway across
the Beeliar Regional Park, which encompasses two significant chains of
In 2013 Infrastructure
Australia considered the proposal to upgrade Leach Highway/ High Street Fremantle,
a project that is now part of the Freight Link proposal. Infrastructure
Australia assessed these upgrades as as 'Threshold', recommending that:
business case be developed to support an investment decision. This should
include design optimisation and reform measures, detailed BCR, risk assessment
and cost estimates and their peer reviews.
route for the Roe 8 stage of the Freight Link would pass through the Beeliar
Regional Park between the North Lake and Bibra Lake (see figure 4). The
Business Case Executive Summary for the Freight Link notes that the works would
affect around 100 hectares of grassland, and outlines the significance of this
area for the natural environment and local Indigenous heritage:
areas are considered high value environmental and Aboriginal heritage areas.
Consequently the Roe Highway extension is going through an extensive
environmental review process.
Albert Jacob MP, West Australian Minister for the Environment, granted
conditional environmental approval for the Roe 8 stage of the Freight Link on 2
Following this, the Commonwealth Minister for the Environment, the Hon Greg
Hunt MP, granted conditional approval for Roe 8 on 22 October 2015, subject to
the project incorporating requirements to:
underpasses to maintain fauna connectivity and develop plans to manage and
monitor fauna and flora, wetland health and water drainage;
packages of land identified by the Department of Parks and Wildlife to
satisfy all or part of the 523 hectares of native vegetation offset
requirements for the project;
nesting hollows for birds and trap and tag more than 100 southern brown
bandicoots living in the area and relocate them to the offset areas;
road on land partly cleared for overhead power lines in order to minimise the
wetland restoration program at North Lake and Horse Paddock Swamp;
bridges through the wetlands - a 120 metre long bridge over Roe Swamp and a 70
metre bridge over Horse Paddock Swamp;
top-down construction approach at Roe Swamp Bridge to minimise clearing
footprint and compaction during construction; [and]
wetlands bridges are used in required locations to maintain ecological
connections for local fauna.
understands that a case appealing the approval of the Roe 8 works has been
lodged in the Supreme Court by the Save Beeliar Wetlands Group.
significance of the Beeliar Wetlands to local Indigenous communities, the Roe 8
stage of the Perth Freight Link was granted heritage approval on 10 September
2015 by the Western Australian Minister for Aboriginal Affairs, the Hon Mr Peter Collier MP,
under Section 18 of the Aboriginal Heritage Act 1972.
Court challenges subsequent delays to the project's implementation
understands that the implementation of Roe 8 stage of the Freight Link has been
delayed by ongoing cases before the Supreme Court of Western Australia, which
challenge the project on environmental and heritage grounds.
environmental and heritage aspects of the Freight Link are discussed further in
the following chapter of this report. However, it should be noted here that the
Western Australian government have withheld information on
commercial-in-confidence grounds regarding how these cases will affect the
implementation of the Freight Link and already-awarded tenders.
the committee understands from evidence received at Senate Estimates 2016 that the
outcomes of the 2015 tendering process may have to be abandoned. According to Mr
Mike Mrdrk, Secretary, the department:
issue with the delay in the project is that there are options which Western
Australia needs to pursue as to whether the tendered project remains valid.
That will obviously be dependent on the time frame that the Western Australian
government will require to address the findings of the court and the environmental
assessment process. That may mean that WA is unable to continue the current
tender price and contract and therefore may require a new market process... I
think there is just too much uncertainty at this stage as to both the planning
and approval process but, more importantly, what procurement process would have
to flow if there was an extended time frame for the completion of the
environmental assessment process.
chapter looks at the issues raised by witnesses and submitters, particularly
concerns that interrogate and question the case made for the Freight Link
proposal by its proponents as described in this chapter. This includes
questions raised about the policy development of the Freight Link project, its planning
and implementation, and the ongoing approvals process for environmental and
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