A VCAT decision has called for developers at the former Ballarat Orphanage site to enter an agreement with Transport for Victoria - formerly VicRoads - addressing how traffic and pedestrians will safely cross Victoria Street, and how drivers will make right hand turns from Stawell Street.

The development will eventually include 44 dwellings, a childcare centre, and a supermarket with three smaller speciality shops and 109 car parks, on the corner of Stawell and Victoria streets.

READ MORE: Former Ballarat Orphanage begins transformation

Submissions from the applicant - one of the permit holders for the project - and Transport for Victoria note traffic will increase in the area, but there's a disagreement on how this should be addressed.

Transport for Victoria are calling for traffic lights to increase safety for drivers and pedestrians, but this is an expensive option, with an estimate rising from about $620,000 to $1 million.

Initially, the permit holders discussed paying for about 35 per cent of the initial estimate, about $220,000 split between the supermarket, childcare centre, and residential permit holders, but Transport for Victoria pushed for them to pay the whole cost as they were the "agents of change" increasing traffic in the area.

The ruling, from VCAT senior member Rachel Naylor, states any designs "for the safety of right hand turn movements and the pedestrians crossing Victoria Street" must be approved by Transport for Victoria, and more detail on costing, times, and how it will be paid for by whom must be submitted before "use of the supermarket" begins.

The ruling discusses submissions from several traffic experts - it's conceded that other non-signalised options may be appropriate, like extending the centre median so vehicles can wait to turn right from Stawell Street into Victoria Street.

However, it's noted that traffic volumes are expected to increase to the level where traffic signals will be required within five to 15 years.

"This lack of certainty about timing has an impact upon any contribution to be made," the judgment states. "I agree this current (traffic) situation generated by other users, not the former Ballarat Orphanage land, is already creating a need for works to address an emerging safety concern.

"Mitigation will be necessary after the development of the whole of the Ballarat Orphanage land is completed.

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"In conclusion, having regard to the evidence of the three traffic engineers, I am persuaded that what is required is some roadworks to address right hand turn movements from Stawell Street South and to achieve a safe access arrangement for pedestrians to cross Victoria Street.

"Any of the three suggested outcomes presented to me appear able to address the need for a safe intersection and achieve an acceptable outcome. Hence, signalisation is not the only, or the necessary, outcome."

The responsible authority, the City of Ballarat, was directed to issue the planning permit with a modified version of the traffic management conditions.

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