The Milton-Ulladulla Bypass will be to the west of the townships on the route that was originally favoured by Transport for NSW and listed in the Shoalhaven City Council Local Environmental Plan in 2013.
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Transport for NSW, NSW Minister for Regional Transport and Roads Paul Toole and South Coast MP Shelley Hancock made the announcement on Friday (June 18) along with news about the Princes Highway and Jervis Bay Road intersection upgrade, and the proposed upgrade of the highway between JB Road and Sussex Inlet.
The preferred bypass route will start at Little Forest Road (north of Milton) and and travel west of both Milton and Ulladulla to Burrill Lake.
A Burrill Lake Co-Design Committee will be established to allow community members to "get down into the technical and engineering detail with the experts and help identify the best outcome for the southern part of the project".
Mr Toole said the preferred strategic corridor option remains the preferred route for the project.
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"We're confident that the preferred route for the Milton-Ulladulla Bypass - the corridor reserved in 2013 - still provides the best outcome for locals and those travelling through the area, taking more than twice the amount of traffic from the existing highway in the future compared to other options," he said.
And while that may not prove popular with some parts of the community, residents and in particular, the Burrill Lake community, was "being invited to help shape the Princes Highway corridor upgrade from the southern end of the proposed bypass".
The aim of the project to deliver safer, more reliable trips on the South Coast, has gained $900 million in federal funding including $400 million to make the Milton-Ulladulla bypass a reality.
"Community input is pivotal to shaping a Princes Highway upgrade that would meet the needs of locals now and into the future," Mr Toole said.
He said it's planned the co-design committee will bring together the community to go through the traffic data, the environmental analysis and the geological constraints and identify the best option for the southern end of the bypass.
Mr Toole said a similar committee was used for consultation on the Great Western Highway and proved to be a great success.
"Transport for NSW has collected a lot of data and looked at the way which traffic movements occur within that area," he said.
"If they actually start moving vehicles further west, they are not going to actually use the bypass - eight out of 10 of those vehicles are either stopping or staying in that area.
"The option that provides the most opportunities for connectivity back into town would deliver the best outcomes for congestion, safety, and liveability.
"It also works for the communities and businesses along the route, which have planned for this corridor for almost a decade, and ensures local connections into Milton and Ulladulla are maintained while we work with the community on the best design for the southern connection at Burrill Lake.
"We recognise there are a range of views about how the proposed bypass should connect in to communities like Burrill Lake and Dolphin Point which is why we're establishing a co-design committee to allow community members to help us identify the best outcome for that part of this game-changing project."
Mrs Hancock said the work of the Burrill Lake Co-Design Committee will coincide with work being done under the Batemans Bay to Burrill Lake upgrade, which will complement the benefits this bypass will bring.
"We want to tap into the people who know this area best to ensure we get the highway upgrade this community deserves, with a focus on Burrill Lake and the southern connection of the Milton-Ulladulla Bypass," Mrs Hancock said.
"We want to assure residents that the co-design process will not delay delivery and our timeframe for the bypass remains unchanged - but we want to make sure we take the time to get this right, as you only get one chance to build major infrastructure like this.
"A lot of people have different views on the project, but it's important we come together to secure the best option to address the problems we have right now which include excessive congestion and safety issues in, and around, Milton and Ulladulla."
Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said a bypass of Milton-Ulladulla is key to transforming journeys along the South Coast.
"We know how important the Milton-Ulladulla Bypass is to the South Coast in alleviating congestion, particularly during holiday periods, but also in driving productivity and access to the region's booming economy," Mr McCormack said.