The first stage Premier Jacinta Allan’s signature Suburban Rail Loop is expected to exceed the $34.5 billion budget, posing a “major risk” to the project’s viability, the nation’s top infrastructure body has warned.
Victoria has asked Canberra to contribute a third of the money for the first leg of the rail tunnel between Cheltenham and Box Hill.
Infrastructure Australia recently evaluated the proposal and found the state government’s business case for the project was not detailed enough and relied on future stages of the rail loop to justify its benefits.
Significantly, the report urges the Victorian government to develop “exit strategies” from the plan if it cannot be delivered.
“We recommend the proponent develops the exit strategies discussed in the Business and Investment Case (BIC) in detail, in consultation with the Australian government, to provide a clear pathway to successfully conclude or transition out of the project in the event it cannot be delivered at this stage or in the future,” the report states.
The project’s eye-watering cost — stage 1 for SRL East has a price tag of $34.5 billion — has become a major political issue for the state government, with it contributing to skyrocketing state debt.
There have been calls for the state to dump, or at least pause, the project until the budget position improves.
Critics have also frequently slammed the lack of thorough detail on the proposal.
Infrastructure Australia’s business case evaluation report argues the $34.5 billion price tag put on SRL East in 2020 is outdated and lacks detail.
“We have low confidence in the cost estimate for SRL East, presenting a major risk to the SRL East project, and the SRL Program as a whole,” Infrastructure Australia found.
“Industry-wide cost escalation since 2020 presents further risk and uncertainty. Due to the uncertainty in the cost estimate, it is likely the economic case for SRL East and SRL North is overstated as any further increases to costs without extra benefits will reduce the benefit-cost ratio,” the report said.
The independent body also criticised the Victorian government business case for not providing enough detail on the entirety of the project, while relying on assumed benefits of future stages that are decades away.
“Crucial project delivery details related to actual costs and the funding of the project were not provided to support our evaluation, reducing our confidence that the project can be delivered as planned,” the report said.
“A more rigorous options assessment for the SRL Program, and therefore SRL East, would have provided a more convincing justification for why the proposed rail solution was selected and why it is being prioritised.”
ABC News
“Freight Trains have been transported…”. ?? By supertrains I suppose?? T. Carroll.