$10b Airport Rail Link won’t receive new funding in state budget
The doomed $10 billion Airport Rail Link will get no new funding in next week’s state budget, as the Allan Government tries to rein in transport spending.
Victoria
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The $10 billion Airport Rail Link will get no new funding in the State Budget, as the Allan Government further mothballs the project and tries to rein in transport spending.
The long-awaited rail link, which has a $5bn commitment from both state and federal governments, stalled last year when former premier Daniel Andrews halted works amid a federal review of infrastructure spending.
A dispute over the location of a Tullamarine station has since broken out between the state and the airport, and has led to mediation by former director-general of the Queensland transport department, Neil Scales.
The Saturday Herald Sun can reveal that about $1 billion has already been spent on early works, including to shift utilities, acquire properties, and pave the way for major construction.
This fits with last year’s Budget that revealed more than $630m had been spent at that point, with another $630m expected to be spent in the current financial year.
But several sources said the project was not going to get new money in Tuesday’s Budget to finish the job, allowing the government to push off billions of dollars in further spending that would increase state debt.
It comes amid a broader reprioritisation of major projects in the state and a bid to take “heat” out of a scorching public-sector construction market.
The Allan Government is already battling massive overruns on key projects, including up to $10bn on the North East Link, which will connect the Eastern Fwy to the M80 in Greensborough which is scheduled to open in 2028.
Most of the focus in the short term will be on finishing the $14bn Metro Tunnel and the $10.2bn West Gate Tunnel, both expected to open next year.
Industry sources have speculated about both those projects needing a further cash injection, with the Herald Sun recently revealing delays and extra costs were expected on station fit-outs.
It is expected the Budget will not feature a lot of new infrastructure spending, other than acquitting what is required for promises made at the last election.
This comes amid wider concerns about skyrocketing debt, projected to hit $178bn by 2027.
Melbourne-based analyst at S & P Global Ratings, Anthony Walker, said the government will need to display “strong fiscal discipline” if it is to lock in a return to a cash operating surplus.
“We expect debt to continue to rise as the government pushes ahead with its big build infrastructure program,” Mr Walker said.
Mr Walker said pressure on the state’s credit rating could also rise if blowouts continue on the North East Link, West Gate Tunnel and Suburban Rail Loop.
“Pressure on the rating will intensify if the government can’t outline a creditable strategy to return the budget to a cash operating surplus and narrow its fiscal cash deficit, which includes infrastructure spending,” he said.
“Victoria’s credit quality is underpinned by its wealthy economy and strong national institutional standards on a global scale.”
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