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Mark Worley [Mark.Worley@planning.nsw.gov.au] Thursday, 4 July 2013 12:16 PM Charmaine Ingram Ulan Rd response

Hi Charmaine, Here is the department's response to your questions on Ulan Rd. Please attribute to a Department of Planning and Infrastructure spokesperson:

Why is the Mid Western subject to paying 51 percent of capital works on Ulan Road?

The Ulan Road Strategy is a comprehensive strategy for the upgrade and maintenance of Ulan Road, a major regional road in the Mid-Western local government area, linking Mudgee to the large mining complex near Ulan and beyond to the Golden Highway and other regional centres. It involves:        upgrading the 20.585 kilometres of non-conforming and inadequate section of the road; upgrading 23 intersections; installing a wire rope barrier on some sections of the road, and enhancing the delineation of the road in other sections; heavy rehabilitation of 7.829 kilometres of the road; light rehabilitation of 13.558 kilometres of the road; reseals to 61.701 kilometres of the road; and general maintenance of the full road.

These works are scheduled to be implemented over the next 20 years, and ensure the road is upgraded and maintained to a high standard, commensurate with the important role it plays in the region. The total cost of the strategy is expected to be about $33.5 million with Council paying around $13.3 million (40%) and the mining companies paying $20.2 million (60%). While Council’s share of most components of the strategy is low (ranging from 18 -31%), its share of upgrading the 20.585 km of non-conforming and inadequate section of road is relatively high (55%).

Essentially, this reflects what Council, as the regional road authority, would have had to pay to upgrade the existing road to the minimum standard for all non-mine traffic. Based on independent engineering advice, the department determined that Council should remain responsible for its existing liabilities on the road under the strategy, and the mining companies should be liable for the lion share of all the other costs.  Why is Mid Western Council subject to this strategy? They say it’s the firs t of its kind.

As the regional road authority, Council has statutory obligations to ensure Ulan Road is kept in a suitable condition, and it would be inequitable to make the mining companies solely responsible for upgrading and maintaining the road. The strategy is not the first of its kind. Councils all over NSW have developed strategies for upgrading and maintaining important roads in their local government areas, and secured contributions from developers to help fund the implementation of these strategies.

Mid Western Council say they cannot and will not accept this deal , where will the money come from?

Based on current spending, Council is expected to spend around $12 million on the relevant section of Ulan Road over the next 20 years, with at least $5.5 million of this funding coming from the State Government via the regional roads grant program. Under the strategy, Council would be obliged to spend an additional $1.3 million on the road over the next 20 years. For this, Council would get a first class road that would be substantially better than any of the other regional roads in the local government area. Council was consulted about the possibility of upgrading the road to a slightly lower standard to reduce the overall costs of the strategy, but rejected this option. The critical issue for Council appears to be more about the timing of its spending rather than the actual amount of its spending, as it is responsible for paying a higher share of the road upgrade works that are schedule to occur in the first five years of the strategy. In other words, it is primarily a cash flow problem. While there are a number of funding mechanisms that could be used to address this problem, the department has advised Council that it would do everything it could to support any applications it makes for State or Commonwealth grants (under programs such as the Resources for Regions program), and to help it meet its obligations under the strategy.

The department supports the implementation of the Ulan Road Strategy, and believes the apportionment of costs between Council and the mining companies is fair and reasonable.

Is this road being considered to become state owned?

No.

It is the department’s policy to publish media responses in full on its website, where the response provides a substantial narrative on the department’s position. This response fits into this category. These responses will be published on the website:   Immediately after the relevant story has been published or broadcast; or Within one week of being provided to a media organisation, if the story doesn’t run.

If you want to defer the publication of this response past one week, please email us at mediaunit@planning.nsw.gov.au to tell us why.

Regards, Mark Worley Mark Worley

Media Officer NSW Department of Planning & Infrastructure | GPO Box 39 | Sydney NSW 2001 T 02 9228 6174 E mark.worley@planning.nsw.gov.au

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