Infrastructure Department warned Morrison government against investing in the Suburban Rail Loop

A damning report on Victoria’s Suburban Rail Loop has lifted the lid on why the Morrison government has so far not agreed to invest in the mega-project.

Federal infrastructure ­experts warned the Morrison government against investing in the Suburban Rail Loop in a damning assessment of Victoria’s plan for the mega-project.

Infrastructure Department advice seen by the Herald Sun reveals bureaucrats raised major concerns about the state government’s business case, which Daniel Andrews used to ask Scott Morrison for an $11bn contribution.

Anthony Albanese this week offered the Premier an initial $2.2bn investment in the $34.5bn first stage of the loop between Cheltenham and Box Hill.

The Labor leader said it was Australia’s most exciting infrastructure project, which would deliver $1.70 in economic benefits for every dollar invested.

The Premier slammed the Prime Minister’s refusal to chip in.

But the Herald Sun can ­reveal Mr Morrison turned him down because the Infrastructure Department determined a revised business case was needed, as well as an independent review of the project’s costs and timings.

Scott Morrison turned down investing in the project based on advice from the Infrastructure Department. Picture: Jason Edwards

It encouraged the government to wait for a formal ­assessment from Infrastructure Australia.

The department called for other transport modes to be considered to deliver the 90km orbital loop that will transform Melbourne’s suburbs.

Chief among its concerns with the business case was the calculation of the cost-benefit ratio – of between $1.10 and $1.70 for every $1 spent – which included the eastern and northern sections of the ­project.

The Herald Sun understands the federal Infrastructure Department’s advice had not been communicated to the state government.

The state government is yet to nominate a price tag for the northern part, between Cheltenham and Melbourne Airport, and Transport Infrastructure Minister Jacinta Allan has said it would be a matter for future governments.

The department questioned the discount rate used to judge the project’s benefits, a concern also raised by transport economists.

Anthony Albanese earlier this week joined Premier Daniel Andrews to announce his party’s commitment to funding the project. Picture: Sam Ruttyn

It called for an overall cost estimation, a funding strategy detailing how much Victoria expected the commonwealth to chip in, a construction schedule, and more traffic modelling to prove the loop would fix congestion issues.

And it said an assessment was needed of how the project could be delivered given ­capacity issues in the infrastructure industry.

Mr Albanese and Mr ­Andrews maintained the project stacked up, with the Premier saying it was “ridiculous” to suggest otherwise.

“It’s not a cost. It’s an ­investment in jobs, and a road and rail network that actually takes people where they want to go,” Mr Andrews said.

Originally published as Infrastructure Department warned Morrison government against investing in the Suburban Rail Loop