Looming standoff between Vic and fed governments over Airport Rail Link risks further delays
Premier Jacinta Allan has accused Melbourne Airport of making “unreasonable” demands to delay the $10bn Airport Rail Link as a potential standoff with the federal government emerges.
Victoria
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A looming stoush between the state and federal governments over the Airport Rail Link risks leading to further delays over the $10bn project.
The potential standoff over the massive public transport project comes as Jacinta Allan accuses Melbourne Airport — which sits on Commonwealth land — of “stalling tactics” to delay the project.
The Victorian Premier has also conceded the total cost of the long-awaited project is at risk of further cost blowouts and the mooted 2029 completion date will need to be reworked.
“Obviously any delay in time does add additional pressure in terms of cost,” Ms Allan said on Thursday.
“Once we have those airport negotiations recommenced … in a much more cooperative frame than we’ve seen to date, that will determine the answer to both time and cost.
“In order to deliver the rail line, that final mile, and build the station on airport land, we need the Commonwealth to use its powers and the airport to cooperative with getting that project done.”
Ms Allan said Melbourne Airport had been “incredibly frustrating” to deal with over the past three years, accusing them of playing “stalling tactics” to delay the project.
She accused the airport of making “many different demands” to the government around issues with the station which could further increase costs, as well as “unreasonable” technical specifications.
“Frankly some of the demands from the airport have really stretched the boundary of what is an acceptable request from the state,” she said.
If the total project cost blows out further, Ms Allan said it is her expectation that the final cost is split with the Commonwealth on a 50:50 basis.
Her comments follow the Albanese government throwing Airport Rail Link a lifeline, offering to pay $5bn to fund it.
The offer follows a long-awaited review of federal infrastructure funding released on Thursday.
But the state and federal governments appear to be on a crash course over the shape of the project with the Allan government wanting their federal counterparts to pressure Melbourne Airport to come to a deal.
Sources close to the state government have claimed Australian Pacific Airports, which operates Melbourne Airport under a 99-year lease, introduced more than 10,000 additional technical requirements as a condition of them supporting the project in February.
The slew of new requirements came after three years of negotiations with the state government over the project.
“APAM has not negotiated in good faith for several years — it is using its monopolistic market power to dictate key project matters to government,” the source told the Herald Sun.
“The shareholders of Melbourne Airport are effectively holding up the delivery of the project until a commercial deal is reached – and we cannot currently build this project using APAM’s proposed contract and the constraints they’re imposing on accessing their land.”
The source rejected assertions Victoria wanted to delay the project.
Ms Allan on Thursday welcomed the federal government’s commitment to continue with the project but said it is her expectation that any money promised for local projects will stay in Victoria.
“Every dollar that is currently allocated to those projects must stay in Victoria,” she said.
“For too long Victorians have been dudded by Liberal governments in Canberra.”
Federal Infrastructure Minister Catherine King said the “blame of one over the other is really unhelpful, particularly on a project like this”.
Ms King noted the state government delayed Melbourne Airport Rail Link project by about four years in their last budget.
She said the review deemed the project “important” but found it was difficult to proceed without knowing whether the station would be located above or below ground.
Asked if she would fix the issues with the airport, or whether it was a state responsibility, Ms King acknowledged that it was a planning issue.
“I am the planning minister for airports so the Victorians are quite right, I’m going to have to approve a planning application at some point,” she said on Thursday.
“We will engage in a process cooperatively with the Victorian government, with Melbourne Airport, to try and resolve this issue.
“Until we can resolve this issue … We can’t build it. We can do bits and pieces, we are starting seeing some of that work happening under Suburban Rail. We can’t build it until we know exactly where it’s going to go and also whether there’s been an escalation in costs.”
Asked if it was a joint responsibility, Ms King said: “It always has been”.
“It’s a cooperative joint responsibility,” she said.
“It’s really difficult because it does require the airport to come forward with a planning application as to where the station is going to go.”
Ms King said she didn’t know how long it would take to negotiate with Melbourne airport
“As a Victorian, I know how important it is. We’ve talked about it for over, I think, 20 years,” she said.
“But we’ve got a bit of work to do with the Victorian government … and with Melbourne airport to get that done.”
Government Services Minister Bill Shorten rounded on Melbourne Airport on Thursday, accusing it of being greedy and dubbing it a “carpark with a runway attached”.
“The airport, they’re a strong and clever player,” he told ABC Radio Melbourne.
“As someone who has lived in Melbourne their whole life, sometimes you can’t help but think that Melbourne Airport is a carpark with a runway attached.”
Mr Shorten suggested the airport had dragged its heels on a rail link because it felt threatened by a potential loss of car park revenue.
“They have an ambitious list of issues where they say the Airport Rail Link compromises our business model,” he said.
“I’m politely sceptical about the extent of Melbourne Airport’s requests.”
A key sticking point between the state government and Melbourne Airport is whether the proposed station should be built above or below ground.
The Victorian government wants to build a cheaper overground railway station but Melbourne Airport says that will stifle future development.
A Melbourne Airport spokesman on Thursday said it remained their strong preference for the station to be built underground.
“Melbourne Airport Rail link is an important project, and important to get right,” he said.
“Our preference has always been, and remains, for an underground station.
“The airport station must be fit for purpose and future proof, to ensure that passengers are well served and so that neither the airport precinct or rail line are constrained as Melbourne continues to grow.
“Melbourne Airport remains ready to work with the state and federal governments to develop and deliver this project for Victoria.”
Transport Infrastructure Minister Danny Pearson indicated the government would not consider an underground station.
“We’ve offered to give them a car and they’re saying we want a Lambo,” he said.
“The problem that we’ve had for the last three years is they’ve said, ‘well it’s a Lambo or nothing’.
“It’s welcome to have the federal government step into the role to try and look at dealing with some of these issues, and we very much look forward to them taking the lead on these discussions with this privately-owned company.”
Opposition infrastructure spokeswoman Bridget McKenzie called on Ms King to show leadership and sort out the dispute.
Senator McKenzie said it was farcical that Melbourne did not have a train between the airport and CBD because the state Labor government was having a fight with Melbourne airport about what that link should look like.
“Given that Minister King signed off on the master plan for Melbourne Airport this year, I would expect her to be calling Jacinta Allan and Melbourne Airport, sitting them down and making sure we get a sensible outcome to this dispute because every year of delay lowers the cost out on this project,” she said.
Moonee Valley Mayor Pierce Tyson called on Melbourne Airport to meet its “social responsibility” and immediately get on board with the building of the project.
Mr Tyson said the rail link would help to mitigate the significant congestion that would build on the Tullamarine and Monash freeways from people getting to the airport, either via car or bus in the long term.
He said the project would also benefit the community.
“If recent reports are accurate it appears Melbourne Airport may be the only barrier in place for this critical project to proceed,” he said.
“If this is the case, then we urge Melbourne Airport to get on board.
“We call on Melbourne Airport to cease petty squabbles about their station location so local, Victorian, national and international visitors can enjoy a world-class rail trip to the airport via a new Airport West-Keilor East station.”
Mr Tyson said Melbourne Airport was a private company profiting off the Victorian community, turning around $1bn in revenue and $150m in the past financial year.
“Moonee Valley Council’s revenue base is one fifth of Melbourne Airport, yet we provide services cradle to grave. Melbourne Airport needs to think about the community and their neighbours who supply the workforce for the airport,” he said.
“The least we can expect from Melbourne Airport is for them to deliver back to our community.”
Mr Tyson said the City of Moonee Valley was home to one of the highest proportions of airport and transport workers in the country, and the rail link would make a “life-changing difference”.
Flinders MP Zoe McKenzie accused the government of ripping more than $300m from the Mornington Peninsula.
“The most called-for road upgrade on the Mornington Peninsula is the Jetty Road overpass and this completely out-of-touch government has cancelled the project and cut the funding,” Ms McKenzie said.
“The Prime Minister himself claimed he supported the Frankston to Baxter rail upgrade and promised to fund it, but he has lied to and deceived the Mornington Peninsula community.”
The Australian Constructors Association chief Jon Davies said the cloud of uncertainty hanging over Airport Rail Link “has to end”
Nicholls MP Sam Birrell said the decision to rip $208m in funding promised for the Shepparton bypass would put community safety at risk.
Mr Birrell said the bridge would have created a second crossing over the Goulburn River, which split the town in half last year during the floods.
“There are farms on one side and processing facilities on the other,” he said.
“We couldn’t get ambulances. We couldn’t get state emergency services vehicles across the community.
“The community said we need the bypass for safety and for our industries to work and now that that funding has been ripped out.”
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