The Dunstan intersection has been a problem area for Scarborough traffic for years.

On Wednesday, the town council will begin a discussion on ways to improve the area. “Clearly that multi-corner intersection down there is a messy area to deal with,” said Tom Guter, Scarborough human resources director.

The council will begin looking at a proposal that was part of a town-wide traffic survey. The discussion is a starting point and changes may be made to the plan as talks continue.

The proposal to be discussed during the meeting would relocate Payne Road to create a new intersection with Route 1 north of the Dunstan School Restaurant. The relocated road would allow for a center turning lane extending from the new intersection to the Pine Point Road intersection.

The plan also includes a lane on Pine Point Road to accommodate turning lanes for right, left and straight-moving traffic. It also would add a right turn lane on Route 1 north of the Pine Point Road intersection. Finally, the plan would also eliminate the traffic signal at Harlow Street.

There are three different proposals as to what to do once the traffic signal is removed at Harlow Street. One proposal calls for closing the street except for an access to the Rite Aid parking lot and forcing all other traffic to enter and exit via Higgins Street.

A second proposal would create a 90-degree intersection at Harlow Street and Route 1. The third proposal being considered would also add a new intersection Harlow Street and Route 1 and also a one-way street from Harlow Street to Pine Point Road.

Depending on what proposals town leaders choose to go with, the cost of the project is estimated at $4.5 million to $5 million in projected 2011 dollars.

How the project will be paid for is still being discussed, but options include using state and local money to cover the cost. The local money may come from a Dunstan impact fee, a proposal similar to the Payne Road impact fee that town has used to fund Payne Road improvements.

According to Councilor Sylvia Most, the council’s ordinance committee has begun review of a proposed Dunstan Road impact fee and the issue has been sent back to town employees for further work.

Most councilors agree that something needs to be done at the intersection, especially given residential construction occurring in the area, including a 240-unit project being proposed by John and Elliot Chamberlain. In addition, the intersection also is being effected by development in Saco and Old Orchard Beach.

Council Chairman Steve Ross said new retail construction on Payne Road including the Wal-Mart Supercenter, would also put some additional pressure on the Dunstan intersection as those coming from the southern end of town and those living in Old Orchard Beach and Saco would most likely use that route.

“If we don’t do something there will be ever more gridlock there,” Ross said.

Town leaders have been discussing options to improve the intersection since about 2000 and thought something would be done when the Great American Neighborhood project was proposed.

If that project had been approved locally, then the state indicated it would have spent about $1 million to improve the intersection so it could accept the added traffic from the housing development.

But the project was overturned by a citizen-initiated referendum and the state removed its money, leaving the town to begin identifying potential repairs on its own. “What we’re trying to do now is quite modest,” said Ross.

There is no definite plan for paying for the project at this point nor is there a construction schedule, both of which will be developed by the council as it moves further in the planning process. But Ross said that the project should begin as soon as possible.