Greenline likely to be about $500m if delivered in full, a source says

There are fears Lord Mayor Sally Capp’s push to build the Greenline will end up costing the City of Melbourne close to $500m.

Lord Mayor Sally Capp’s pet project, the Greenline, may end up costing close to $500m – if it ever gets beyond the first stage of construction.

The City of Melbourne has repeatedly stated Greenline – which includes more than 4km of connected walkways and parks on the north bank of the Yarra River – will cost $316m.

However, sources close to the project said the cost estimates are “preliminary” and the whole project “is likely to be a lot closer to $500m” if delivered in full.

“Even the business case states clearly that the cost estimates are only preliminary and much more work needs to be done to find out the real cost of this project,” one source said.

The Greenline on the north bank of the Yarra River is Sally Capp’s pet project. Picture: Luis Enrique Ascui

“The way they have set the project up so detailed design work is done in sections – rather than upfront – means the costs will only be updated when detailed work on the next section is complete, which will delay when the community learns about cost blow outs.

“If it ever gets beyond this first stage of construction, it’s going to cost far more than $316m and it is likely to be a lot closer to $500m.”

The business case states: “preliminary project costings based on early high level design work indicate that the Greenline will cost $315.6m.”

“Further work is required to understand the output funding and capital funding required for a staged option.”

A source says the costs will only be updated when detailed work on the next section is complete. Picture: City of Melbourne

A City of Melbourne spokeswoman said the claim that the Greenline could cost up to $500m was a “mistruth”.

The Greenline has been plagued with uncertainty due to a more than $200m funding black hole for the project and the completion date has been pushed back to 2030 – if there are no further delays.

Only the first stage of construction – along Birrarung Marr – has been budgeted for, with the remaining sections through to the Bolte Bridge in limbo.

A funding and partnerships strategy is due to be presented to councillors in coming weeks but there is increasing uneasiness about proceeding with a large infrastructure project when there is no certainty around how to pay for it.

Businesses and property owners in the vicinity of the Greenline may be slugged with extra charges or fees to recoup costs as part of a push for value capture to pay for the project.

The increasing cost of construction and major projects is also a key risk to the Greenline. The cost of building construction rose 5.4 per cent in 2023 due to ongoing skilled labour shortages, according to the Australian Bureau of Statistics

The council’s finances are also in a dire state. Town Hall predicted a deficit of $17.5m for this financial year and overall borrowings of $234.8m, according to this year’s budget.