Australia's largest toll-road operator, Transurban, will snub a centrepiece infrastructure project after deciding the Victorian government's new model for funding the east-west link in Melbourne "just doesn't make sense for us".

The state government wants to start construction next year on the tunnel under inner Melbourne expected to cost $6 billion to $8 billion. It has estimated as many as 100,000 vehicles a day will use the roadway.

Chief executive Scott Charlton said the proposed structure for the east-west link – known as an "availability-payment model" – did not suit its "strategic approach and risk profile. It just doesn't work for us the way they have proposed it," he said.

State governments have been forced to look for alternative ways of building infrastructure projects after the unravelling of partnerships between governments and the private sector to build roadways and tunnels.The so-called availability model keeps the risk in the hands of taxpayers rather than the private sector, which has become reluctant to invest after the failure of toll roads such as the $4.8 billion airport link in Brisbane and the Lane Cove and Cross City tunnels in Sydney.

Loading

Under the Victorian government's plans, the state will hold control of the tolling company for the east-west link before selling it in the longer term.

While it was not interested in tendering for the project, Mr Charlton said Transurban supported the east-west tunnel and would be keen to talk to the government about how it linked with his company's CityLink tollroad.