City of Melbourne reveals new funding model for Greenline project after seeking $200m from the state and federal governments

The state and federal governments will no longer be asked to cough up $200m to help fund the Greenline project, with Lord Mayor Sally Capp conceding it was an ambitious aim.

The Allan and Albanese governments will no longer be asked to cough up $100m each to fund outgoing Lord Mayor Sally Capp’s pet project, the Greenline.

The “partnership and funding strategy” for the $316m project has been released after months of speculation about its contents, revealing that the City of Melbourne will now shift to a “diversified funding model”.

The council was seeking $100m commitments from both the state and federal governments to help fund the project, which aims to create 4km of connected walkways and parks along the north bank of the Yarra River by 2030.

“We’re asking them for $100m each, with the remaining third to be provided in partnership between us, our key stakeholders and the private sector,” Ms Capp said in 2022.

Flinders Walk near the Princes Bridge in the Birrarung Marr precinct.

Seafarers Rest Park in the Maritime precinct.

However, only $20m has been pledged by the federal government to date, with the state government yet to come to the table.

“Between 2020 and 2023, the City of Melbourne had sought to deliver the Greenline project through a tripartite funding agreement between the Australian government, Victorian government and the City of Melbourne,” the strategy reads.

“As the Greenline project progresses, the City of Melbourne is adopting a diversified funding model with six sources of funding.

“This approach recognises the Greenline project consists of individual project actions that each require a tailored approach to funding and delivery.”

All nine councillors at Town Hall on Tuesday night at a Future Melbourne committee meeting voted to approve the strategy.

Ms Capp told the meeting the strategy was a “fantastic way forward” that “future-proofs the delivery of the project”.

“It reflects some of the learnings … we’ve had since 2018 when we had the ambitions of this being a project that was jointly funded by three levels of government,” she said.

“That was indeed a grand ambition and will, to some extent, continue to be realised.”

Lord Mayor Sally Capp says the strategy provides a ‘strong platform to secure future investment’. Picture: David Crosling

While the Greenline project has been forecast to cost $316m, sources told the Herald Sun in February that the cost was likely to be “closer to $500m” if delivered in full.

Under the new “diversified funding model”, the council will rely on:

Direct budget funding from the City of Melbourne, state and federal governments;

Partnership-based funding, including with landowners, private sector stakeholders and public sector agencies;

Grant funding from state and federal government grant programs;

Philanthropic funding from individuals, foundations or trusts;

Loan funding to fill “funding gaps” under “special circumstances”; and

Value capture mechanisms, which could see property owners and businesses hit with extra rates and special charges.

The council expects 40 per cent of the project to be funded through “direct budget contributions” and 28 per cent through partnership funding.

“Grant funding opportunities are a secondary source of funding for the Greenline project and relevant grants will be monitored and eligibility criteria reviewed,” the strategy reads.

“Philanthropic funding, loan funding and value capture and commercialisation funding will be supplementary sources of funding.”

According to the strategy, the council will “engage annually” with the state and federal governments “regarding potential direct funding contributions” in the hopes they will splash millions on the project in the future.

However, a state government spokesman said the project is a “matter for the City of Melbourne”.

Batman Park in the River Park precinct.

The Falls precinct next to Sandridge Bridge.

It comes a week after the City of Melbourne announced its draft budget, which allocated $22.5m to the Greenline project for its first stage at Birrarung Marr, using $12.5m of the $20m pledged by the federal government.

But the rest of the project has not been allocated funding “for delivery” over the next four years.

Ms Capp last week defended the “rephasing” of the project, saying she did not expect it to affect the completion date, only “when the spend will happen”.

In March, the Herald Sun revealed that the project has already cost ratepayers more than $15m even though construction has not yet begun.

The council said the money had been spent on planning, early investigative works, design, development of the project’s master plan, as well as precinct and concept plans.

Construction is now underway on the first stage at Birrarung Marr, which has been dubbed the “gateway to the Greenline”.