Federal government puts Victorian government on notice over Suburban Rail Loop report
The federal government says the Victorian government must explain the further funding it needs for the Suburban Rail Loop. (Supplied: Victoria's Big Build)
In short:
A new report on the business case for Victoria's Suburban Rail Loop has prompted the federal government to request the state government "come forward and explain".
The Infrastructure Australia report casts doubt over the financial viability of Premier Jacinta Allan's signature project.
Victorian government ministers faced intense questioning from reporters on Saturday over the transparency of their costings for the $34.5 billion rail project.
The federal government has put the Victorian government on notice to explain the findings of a critical new report questioning the viability of the Suburban Rail Loop (SRL).
Speaking in Melbourne on Saturday, Housing Minister Clare O'Neil said the federal government was taking a damning assessment by the nation's top infrastructure body "really seriously".
The report by Infrastructure Australia said the advisory body had low confidence in the $34.5 billion cost estimate for stage 1 of the orbital train line to connect Box Hill to Cheltenham, with a potential cost blowout said to pose a "major risk" to the project's viability.
The Suburban Rail Loop is an ambitious, multi-billion-dollar rail plan to create trans-suburban public transport across metropolitan Melbourne. (Supplied: Infrastructure Victoria)
It also said the Victorian government's business case lacked detail and overstated the project's benefits, in part because it assessed the first two stages together when instead they will be delivered up to 18 years apart.
It urged the government to develop "exit strategies" if the project cannot be delivered.
"Obviously this is a review that the Australian government takes really seriously," Ms O'Neil said.
"The Victorian government will need to examine those and continue that really strong discussion we have with them.
Ms O'Neil reiterated the federal government's commitment of $2 billion for the first stage of the SRL but indicated the Commonwealth had questions about how the remainder of the project would be funded.
"As for further funding, the minister's made it really clear that that will be the subject of discussion and the Victorian government will need to come forward and explain some of what's in that report,"she said.
While the federal government has committed $2.2 billion for the project, the Infrastructure Australia report has been produced as part of a Victorian government bid to fully fund the $34.5 billion endeavour.
The Victorian government has committed $11.5 billion and proposes to find another $11.5 billion in "value capture" — a way of public financing by collecting a portion of infrastructure investments from increased land values. That leaves a funding gap of $9.3 billion.
State government says it is standing firm
State government ministers faced sustained questioning over the project's economic credentials on Saturday.
As well as developing an exit strategy, Infrastructure Australia recommended the state government provide detailed updates on the project's cost, financing and benefits before the Commonwealth committed any further funding.
The state minister responsible for the project, Harriet Shing, stood by the project and said her government would continue to work with the advisory body.
"We have constant engagement with Infrastructure Australia and it's important to note that we will continue to work across all levels of government," she told reporters on Saturday afternoon.
"To be really clear, the Infrastructure Australia report is the document upon which the $2.2 billion allocation from the Commonwealth has been released."
Harriet Shing faced extensive questioning from reporters on Saturday. (ABC News)
Ms Shing said Prime Minister Anthony Albanese and Infrastructure Minister Catherine King agreed the project was necessary, and that Victorian voters had given it their approval by voting for Labor at the two most recent state elections.
She maintained construction on the SRL's first stage was running on budget and on time and that trains would start running between Box Hill and Cheltenham in 2035.
"Even the auditor-general has agreed that this project does stack up and is within the budget and time frames that have been set out," she said.
Health Minister Mary-Anne Thomas faced questions on the SRL on Saturday, and also stood firm, saying it was a bold project that would transform the state.
She likened pushback against the SRL to "naysayers" about the City Loop — a ring of five stations in the Melbourne CBD — which has long been an integral feature of Melbourne's transport system.
Planning expert labels SRL project a 'sham'
Emeritus professor of environment and planning at RMIT University Michael Buxton said the entire SRL project was "a sham" and "mired in deception".
The planning expert said the project was based on a "flawed business case" and if the federal government proceeded to fund the project, it would be doing so on political grounds.
"This is a financial mess as well as a transport and planning mess," he said.
"It's just mired in potential disaster and I think the state government should re-appraise their entire project.
"It's just proceeding in a pig-headed, obstinate way that it knows best … let's just pause now."
Michael Buxton says the Infrastructure Australia report should dissuade the federal government from providing financial support for the SRL. (ABC News)
The Victorian opposition is also calling for a pause on SRL construction.
"[Premier] Jacinta Allan is consigning Victorians to generations of debt," major projects spokesperson Evan Mulholland said.
He said the Infrastructure Australia report "obliterates the cost projections" because the government continued to use cost estimates made five years ago.
"There's since been over 20 per cent cost escalation increase sector-wide so we know that she's using the wrong assessments," he said.