Questions over the Albanese government’s $2.2bn commitment to the Suburban Rail Loop

The Coalition is calling for an investigation into the Suburban Rail Loop amid concerns taxpayers are being “forced into a project that doesn’t stack up”.

The state government is still chasing up major funding through value capture and an extra $9bn from the commonwealth for the Suburban Rail Loop.

The Coalition is calling for a federal probe into Victoria’s controversial Suburban Rail Loop as the Allan government surges ahead with plans to build high-rise developments along the proposed train line.

The federal opposition has written to Australia’s Auditor-General and Infrastructure Australia requesting a formal investigation into the $35bn first stage of the SRL.

The Herald Sun revealed on Wednesday that swathes of suburban Melbourne were set to be transformed into high-rise developments between Cheltenham and Box Hill as the Allan government powers ahead with the SRL, despite the project not being fully funded.

In a letter sent to the commonwealth Auditor-General’s Office last week and obtained by the Herald Sun, federal opposition spokesman for Infrastructure and Transport, Senator Bridget McKenzie, questioned the Albanese government’s decision to proceed with its $2.2bn commitment to the troublesome project.

Anthony Albanese is facing questions over his government’s $2.2bn commitment to the troublesome rail loop. Picture: David Geraghty

“By commencing construction with the support of the Australian government, there is a very high financial risk ­exposure to future commonwealth governments of being required to make additional contributions to finalise delivery of the project in order not to void initial investments,” she said.

The state government, which has set aside $11.8bn for the SRL, is still chasing up major funding through value capture and an extra $9bn from the commonwealth.

The Victorian Parliamentary Budget Office has previously estimated its costs could reach $200bn by 2084.

“Neither government has been clear about the means by which up to $20bn would be obtained from value capture to fund the project,” Ms McKenzie wrote.

Despite calls for the loop to be independently evaluated, the Albanese government has refused to subject the project – a key election commitment – to a formal assessment.

Ms McKenzie noted the Grattan Institute and respected economists had recommended both government abandon the project.

The Victorian Auditor-General’s Office and the Victorian Ombudsman have also expressed concerns about the delivery of the SRL.

Ms McKenzie said the commonwealth Auditor-General needed to undertake a full audit before the Albanese government spent any further taxpayer funds on the project.

“State and federal Labor have now joined forces and are forcing taxpayers into a project that clearly from available expert analysis doesn’t stack up,” she said.

Federal Infrastructure Minister Catherine King reaffirmed the Commonwealth’s commitment to the project in November, but said: “We need to really understand the costs before we put any further investment in.”