It may be the most expensive project in Victoria’s history, but the state government still hasn’t secured a third of its funding despite signing contracts worth more than $5 billion to build the Suburban Rail Loop.
The project — an ambitious plan to build an orbital train link through Melbourne’s middle suburbs — is one that will define Premier Jacinta Allan.
In the face of political opposition and concern over the eye-watering price — the first stage alone will cost $34 billion — the premier has staked her leadership on the SRL.
Labor has taken the project to two elections and were returned with increased margins. It picked up and held seats along the route between Cheltenham and Box Hill as well.
But there’s disquiet among some ministers and in caucus that the state is spending so much money on a project in Melbourne’s east.
Frustration is loudest among MPs representing Melbourne’s north and west, seats that have been considered Labor heartland for generations.
The opposition, at both a state and federal level, have raised concerns about the project’s finances, but Victorian Coalition leader John Pesutto says he will not rip up the contracts should he win in 2026.
So, while there’s a lot of noise about the suburban rail loop, what do experts say?
The ABC spoke to a group of economists, planners and users to see what they make of the biggest infrastructure project in Victoria’s history.
Some experts back ‘visionary’ rail project
The opinions were varied.
It’s taken awhile to surface but several transport experts back the SRL because of its transformational ambition.
They say a key aspect is that SRL prepares for the future rather than being built to catch up to demand.
Dr Chris Hale, a transport and infrastructure expert, believes plenty of people will catch the service, with up to 40,000 people a day using some of the new stations at Box Hill and Monash University.
“The figures look pretty strong for a public investment case,” he said.
“It’s also an opportunity for us to reconceptualise our rail network, to make it less of a radial style network, and I think there are really significant prospects for growing that eastern suburbs corridor into a major economic heartland for greater Melbourne.”
Others to support the plan include RMIT’s David Hayward and Monash University’s Graham Currie.
Dr Hayward, a public policy expert, says the “visionary” value of the SRL was from the housing growth it would stimulate around new stations.
“The bit that I really like about it’s not so much what’s happening below ground. It’s all of the housing and retail and other development above ground. It’s going to remake a big chunk of Melbourne, because we’re growing so rapidly,” Dr Hayward said.
The government’s rhetoric supporting the project focuses on Melbourne growing to the population size of London, 8 million people, by 2051.
A debate about how big Melbourne and Victoria should be is likely to only get hotter as federal and state elections approach, so expect to hear plenty of questions from the opposition about Melbourne’s “livability” in coming months and years.
Transport expert Dr Graham Currie says Melbourne needs to restructure how it operates to deal with population growth.
“We are going to need the project, and the sooner we get started on it, the sooner the project will come to create the benefits that we need,” he said.
“I asked the people that are against it to look at alternatives that could create the significant changes which the SRL would do.”
Other experts accuse SRL of sponging up cash from other projects
Not all transport and planning experts are supportive of the concept.
Marion Terrill is scathing of the project because it focuses on an older technology in heavy rail and will suck up all the budget for more pressing projects.
“Victoria is the most indebted of all the states, so we don’t have a feasible plan to pay for it,” Ms Terrill said.
“So, it’s going to crowd out things like Geelong Fast Rail, Melbourne Airport rail, because the government simply can’t afford them all.”
Stage 1 will be funded a third from direct state investment — it’s already signed contracts worth $7.5 billion. Another third will be raised through “value capture” — read taxes and levies — from new developments around stations and a third from the federal government.
But the federal government is yet to commit to the request.
Before the last election, Labor promised $2.2 billion but that is yet to flow, and the remaining request is subject to assessment by Infrastructure Australia.
That process has been hindered by accusations Victoria isn’t handing over all the information.
“I don’t think it’s a good idea. I think if it was a good idea, the government would have told us why it was, and it hasn’t really done that, and it would have told Infrastructure Australia why it’s good idea,” Ms Terrill said.
Federal funding for the project looms as major issue at next year’s election, with Peter Dutton’s opposition cool on the Suburban Rail Loop.
There’s also concern among federal Labor MPs that the money could be better spent elsewhere, including on the perennially delayed Airport Rail Link.
Economist Saul Eslake is also wary of the eye-watering price tag of the project, and the use of debt to fund its construction.
“It’s far from clear that the Suburban Rail Loop will generate sufficient revenue to cover the interest on that debt, the operating expenses and the repayments over future years of that debt,” he said.
“The railway to the airport might have done more for promoting the future growth of Melbourne and different types of industries of the future than the first stage of the Suburban Rail Loop.”
He’s also worried that the SRL investment will mean the state spends less on core business like schools, hospitals and policing.
Public transport association balances pros and cons of SRL
But what about those that use public transport to get around?
The Public Transport Users Association is supportive of adding more options to the network and ending the so called hub-and-spoke layout but is wary of lost opportunities elsewhere.
“Fundamentally it’s a good idea for the future of Melbourne,” PTUA spokesman Daniel Bowen said.
“Clearly the government has got to keep a lid on the cost, and make sure that other high priority investments be that in public transport or other fields.
“We have unreliable and infrequent bus services right across Melbourne, we have problems with the trams, problems with the trains.”
The government is not backing down, and contracts are signed. More practical opponents of the project want the SRL to be delayed for a few years to let the cost be spread out over more years.
The project is also sucking up thousands of workers during a housing crisis, as well as increasing pressure on materials.
“It’ll free up some of the resources to be redeployed elsewhere, where it’s needed right now. It would be the sensible thing to do. I wish they had done it a couple of budgets ago, quite frankly,” Dr Hayward said.
But that train has already left the station.
