Major works on the $34.5 billion Suburban Rail Loop could be delayed or deferred amid concerns about the project’s funding and state debt.
Treasury briefings in recent weeks have raised the prospect of the rail line’s construction milestones being rejigged, pushing back some spending further down the track to free up space for other infrastructure priorities.
Concerns have been raised about the future of the signature Allan government project, and the implications for the broader “Big Build”, if Victoria has to fund the SRL East between Cheltenham and Box Hill without extra Commonwealth cash.
Some Labor MPs have questioned putting all the government’s eggs in the new underground rail line, which is focused on the southeastern suburbs, and the impact that would have on other road, rail, school and hospital projects.
Concerns have been raised about the future of the signature Allan government project. Supplied
One option raised by the Department of Treasury and Finance is to push back some of the project’s major works, spreading the spending on SRL East over a broader time frame.
But the government insists the project will continue, with tunnelling to start in 2026 — the same year as the next state election — and the line open to passengers in 2035.
The Saturday Herald Sun can also reveal that the next major contract — for tunnelling between Glen Waverley and Box Hill — is set to be inked this month.
Construction industry sources said they had been told “the project is not in danger and we should proceed as if there’s no change”.
So far, the Albanese Government has provided $2.2bn for the SRL East, and has said there would only be more cash provided if independent assessments showed it was “value for money”.
The Allan Government has locked in $11.8bn, leaving a funding black hole worth up to $20bn.
The Allan government has locked in $11.8bn for the project. Picture: NCA NewsWire / Wayne Taylor
While some of the gap could be filled with taxes on property and developments around stations, where suburban skyscrapers of up to 40 storeys would be allowed, there is a broad understanding that so-called “value capture” taxes would not meet the aim of funding a third a project, worth up to $11.5bn.
“That’s just not going to happen. How much has ‘value capture’ raised from other projects?” one senior Labor figure said.
The idea of de-scoping the project has also been raised, but sources said there was no obvious way of stripping back the SRL without making it less effective in transforming middle Melbourne.
Last month a number of Labor MPs from the western suburbs met with Major Infrastructure Minister Danny Pearson to outline ongoing concerns about the project.
Herald Sun
