Report to outline ‘options on the ways forward with the project’

A mediator’s report on the future of Melbourne’s stalled Airport Rail Link will soon be handed to the federal transport department amid an ongoing stoush about the location of the rail station.

A high-level report about the way forward for Melbourne’s stalled Airport Rail Link is set to be handed to the federal transport department within weeks.

Senior bureaucrats were on Tuesday grilled about the mediation between the airport and the Victorian government amid an ongoing stoush about whether the rail station should be underground or elevated.

The Herald Sun last month revealed Neil Scales, former director-general of the Queensland transport department, had been appointed to get the project back on track.

Officials said Mr Scales, who is on a $50,000 contract until September, had conducted 10 meetings but none involved the state government and airport meeting together.

Mediator Neil Scales is on a $50,000 contract. Picture: Dan Peled

Two meetings were held with the Victorian transport department secretary, as well as one with the delivery agency.

He also met with Melbourne Airport, federal transport department officials, IMF investors, civil engineering company Laing O’Rourke, the Suburban Rail Loop Authority, High Speed Rail Authority and Transport Minister Catherine King.

Mr Scales’ report, which the department expects will outline “options on the ways forward with the project”, is set to be finalised “in the next few weeks”.

Federal Infrastructure Department secretary Jim Betts said the department would review the report and then provide advice to Ms King, with the government to decide if it would be made public.

“The question is whether it is affordable and if so, at what price, and at what price does an underground option become prohibitively expensive,” Mr Betts said.

“That’s the question that everybody has been grappling with.

“It’s not about what is in a master plan or not … that does not constitute an investment decision.

“This is a question of what is affordable and is there scope for agreement on a preferred option between Melbourne Airport on the one hand and the Victorian government on the other.”

Federal Infrastructure Department secretary Jim Betts said the department would provide advice to the minister, Catherine King. Picture: Toby Zerna

Mr Betts said the Commonwealth stood ready to invest when common ground was reached, however, the project had to have “value for money”.

At least $70.7m of federal taxpayer dollars has been spent on the project’s detailed business case, with a further $30m on the preliminary business case.

He said the Commonwealth did not have a preferred model for airport rail, adding it just wanted a “solution which will be in the interests of passengers”.

“I’m not here to defend one option or another but it would not be the only airport in the world where there is an above ground rail connection,” he said.

Assistant Minister for Infrastructure and Transport, Senator Carol Brown, said airport rail was a project that the Australian government was “keen to see rolled out and completed, as most Victorians probably are, and that’s why the minister appointed a mediator”.

“We’re going to be expecting that report in the coming weeks,” Senator Brown said.

“We are going through a proper process to deliver what is a vital project, we all agree with that.”

Bureaucrats said they had not received any requests from the Victorian government about investigating the potential for a rail link between Avalon airport and the CBD.

Stalemate may drag on for years

The Allan government says it can’t guarantee the Airport Rail Link stoush will be resolved before Victorians head to the polls in 2026.

It comes after Deputy Premier Ben Carroll yesterday opened the door to an underground station at Tullamarine that would end a long-running stalemate.

But on Tuesday, Transport Infrastructure Minister Danny Pearson said building the project will cost billions more and take years longer if the government was to meet Melbourne Airport’s demand to build an underground station.

“It just costs so much more money and it takes so much longer and I don’t think it results in a better experience,” he said.

Mr Pearson said there is no guarantee that the stalemate would be sorted out before the next state election.

“I can’t guarantee that because we are dealing with a rapacious private operator that has shown no interest to date,” he said.

Deputy Premier Ben Carroll has opened the door to an underground station at Tullamarine. Picture: Getty Images

“We can’t get this deal done unless the airport gives consent to do the deal. Today, I’m telling you there’s been no interest. They’re basically just saying ‘so long as you do what we want you to do, it’s all going to be fine’.”

Mr Pearson said he is “frustrated” by the wasted years fighting with the airport.

In 2019, Melbourne Airport was part of a consortium that offered up to $7bn towards an underground airport station and express tracks from Sunshine to Southern Cross.

Mr Pearson said while the government would consider any proposal that would benefit taxpayers, he lashed Melbourne’s Airport’s previous offer.

“They don’t any money on the table,” he said.

“When they put up a supposed deal last time, it was a dud deal. It was a sham and it stank to high heaven which is why the Andrews government and the Morrison government comprehensively rejected it out of hand.”

Deputy Premier Ben Carroll on Tuesday morning doubled down on his shock comments a day prior, where he outlined a willingness to negotiate with the airport.

The comments were a shift in rhetoric and put Mr Carroll at odds with senior members of the government, including Treasurer Tim Pallas.

Transport Infrastructure Minister Danny Pearson says building an underground station as part of the Melbourne Airport rail link said will take years longer to complete. Picture: Newswire

On Tuesday morning, Mr Carroll called for the project to be built as a matter of urgency.

“If Melbourne Airport is serious and they’ve got their $7bn they offered in 2019, we can get this project done,” he said.

Asked why the Airport Rail Link project isn’t being prioritised over the contentious Suburban Rail Loop, Mr Carroll responded: “That’s a matter for the Transport Infrastructure (Minister).”

“But if you think about it, we’re sort of getting them both done together,” he said.

The Niddrie MP – whose electorate would benefit directly from the project – yesterday suggested Melbourne Airport would need to contribute financially to speed up the process, saying a previous offer of $7bn – which was to go it alone and build a new tunnel to Southern Cross station – would see the project built “tomorrow”.

His willingness to negotiate with Melbourne Airport – which the Allan government has accused of holding the project “hostage” – is a shift in rhetoric and put Mr Carroll at odds with senior members of the government, including Treasurer Tim Pallas.

It follows a long-running dispute between Melbourne Airport and the state government over whether the station should be built above ground or underground.

The federal government was forced to bring in an independent mediator to sort out the stalemate, which has delayed the project’s finish date by at least four years, until 2033.

In 2019, Melbourne Airport was part of a consortium that offered up to $7bn towards an underground airport station and express tracks from Sunshine to Southern Cross. The government has lashed that consortium proposal a “terrible deal” for commuters and taxpayers.

Melbourne Airport wants to build an underground station but the state government is pushing for an above-ground option. Picture: Big Build

An artist's impression of Melbourne Airport with an underground rail station (bottom middle) as well as a new road link to its car parks. Source: Melbourne Airport

Following Mr Carroll’s comments on Monday, the government issued a statement which appeared to shut down any prospect of meeting the airport’s demands.

“The airport has deliberately frustrated the process every step of the way by trying to extort hundreds of millions of dollars in compensation from the state – refusing to contribute a single cent towards the project,” a government spokesman said.

“We look forward to the Commonwealth progressing matters with their appointed mediator to help resolve the unreasonable demands of its tenant, Melbourne Airport.”

A Melbourne Airport spokesman said an underground airport station would future proof both the terminal precinct and the rail line.

“Melbourne Airport has worked constructively with the Deputy Premier to deliver new airlines, new routes and more jobs for Victorians and we share his desire for an airport rail line that will serve the city and its residents well for the decades to come,” he said.

“We have held positive discussions with the federal government-appointed mediator and remain fully engaged in this process.”