‘It simply does not make sense to put all of our eggs in one basket’: John Pesutto on rail loop

After causing upset within the party, John Pesutto has announced the Liberals’ and Nationals’ formal position on the future of the $125bn Suburban Rail Loop.

Victoria’s most expensive infrastructure project could be scrapped if the opposition wins government in 2026.

The opposition’s shadow cabinet on Monday endorsed a policy to “reserve the right not to complete” the $125bn Suburban Rail Loop.

In a move that caused upset among his colleagues John Pesutto flagged the policy on Sunday before it had been formally adopted.

“A future Liberals and Nationals Government will be focused on meeting the infrastructure needs of the whole of Victoria,” Mr Pesutto said.

John Pesutto has confirmed the rail loop could be scrapped if the opposition is elected. Picture: David Crosling

“Under Labor, Victoria is broke and has more debt than New South Wales, Queensland and Tasmania combined. It simply does not make sense to put all of our eggs in one basket when there are so many pressing infrastructure needs right across Victoria.

“Under Jacinta Allan, the SRL is shrouded in secrecy and will sign Victorians up to a project that will plunge us further into debt and diminish our ability to deliver key projects including hospitals, schools, roads and other vital services across the state.”

Under the Coalition policy, the SRL would be scrapped irrespective of how much of the project had been completed.

The Allan government has committed to building the first stage of the project, with early estimates expected to cost up to $35bn.

Mr Pesutto says the Suburban Rail Loop project will plunge Victoria further into debt.

It has backed away from completing the second and third stages.

The first major works contract for the $35bn rail line was signed in December, locking Victoria into its most expensive infrastructure project ever.

The deal, worth $3.6bn, is to tunnel the initial 16km of the 26km Suburban Rail Loop East, which will connect Cheltenham to Box Hill.

A separate contract, for tunnelling between Glen Waverley and Box Hill, is expected to be inked this year; a further deal to build SRL trains and a signalling system, as well as operate and maintain the SRL East network, will be signed next year.

The Coalition policy would honour all existing contracts before mothballing the project.

A similar policy was rejected by the shadow cabinet before Christmas because it threatened to rip up existing contracts.

Sources said ripping up contracts was a major sticking point.

Shadow Minister for Transport Infrastructure, David Southwick, said the SRL had never been properly scrutinised.

“By proceeding with this project, Jacinta Allan will drive Victoria’s already record debt even higher at a time Victorians can least afford it,” he said.

“Only and Liberals and Nationals Government will return proper accountability and transparency to major projects and back projects that bring benefit to the entire state.”

Ahead of the 2022 election the Opposition, under former leader Matthew Guy, vowed to shelve the major infrastructure project.