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Coalition Government fixes Labor’s leftover mess to deliver a vibrant modern wholesale market for Victoria

Wednesday, 20 July 2011

The Victorian Coalition Government will deliver a modern and vibrant wholesale market at Epping to meet the long term needs of the market community with more affordable rents for market tenants and the required warehousing.

Minister for Major Projects Denis Napthine today visited the new site at Epping where he said the Coalition Government was forced to resolve massive cost blowouts and project management failures left by Labor to get the Epping market project back on track.

"The Coalition Government has undertaken an exhaustive review and thoroughly considered all options to provide the best outcome for taxpayers and achieve a modern market that meets the long term needs of the community," Dr Napthine said.

As a consequence of Labor's disastrous mismanagement of this project, additional project funding would be required to continue the market at the Footscray site or to relocate to Epping.

The review of the project completed by the Department of Treasury and Finance found that continuing at Footscray Road would cost taxpayers at least $100 million more than the Epping option, and market tenants would face higher long term tenancy costs as well as significant disruption to business while site upgrades were completed.

"From 2004, when a decision was made to move the market, Labor completely mismanaged and under-funded the Melbourne Wholesale Market redevelopment creating a $370 million cost blowout for taxpayers, years of delays in project delivery, no warehousing, and unaffordable rents for tenants," Dr Napthine said.

In 2005-06, project funding was set at $300 million, well short of a revised figure in 2009 of $531 million and less than half of the $670 million the Coalition Government was advised late last year the project would cost.

Critically, the project was not just underfunded by Labor but the funding model was completely unsustainable.

Under Labor's plan, market tenants would have been forced to pay rent increases well in excess of 200 per cent which would have put many market users out of business.

"Protecting market tenants from the exorbitant rent increases they would have faced under Labor is imperative to the future of Melbourne Wholesale Markets and preventing rising food costs," Dr Napthine said.

When Labor announced the Melbourne Wholesale Market Redevelopment they committed to opening the new market in 2010 however Labor's failure to properly plan, cost and manage this project meant that, in addition to a $370 million cost blowout, the new Epping site can not be completed until 2014/15 at the earliest.

Labor's flawed plan also failed to provide proximity warehousing, a crucial part of a modern wholesale market.

"The project funding determined by the Coalition Government will make sure the construction of warehousing goes ahead and is ready for the opening of the new market," Dr Napthine said.

Dr Napthine said the Government would now be entering commercial discussions with market tenants to finalise project finances and make sure market users are properly catered for in the relocation.

"Unlike Labor, who continually failed to properly consult market users, the Coalition Government will be working hand-in-glove with market users to make sure their relocation issues are resolved in a cooperative manner," Dr Napthine said.

Dr Napthine said that without the Melbourne Wholesale Market, independent retailers would decline and Victorian consumers would have less choice about where they buy fresh fruit and vegetables.

"The Coalition Government's decision is in the best interests of the market tenants and minimises cost exposure to Victorian taxpayers, it will also create thousands of jobs in Melbourne's north," Dr Napthine said.

"The Coalition Government is implementing a clear plan to end the mess that Labor left behind and deliver a modern and vibrant wholesale market at Epping that meets the long term needs of the market community and Victorians."

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