Matthew Guy says Coalition will shelve ‘dreamt up’ Suburban Rail Loop

A Coalition government led by Matthew Guy would shelve the Suburban Rail Loop project to free up cash, but may build the 90 kilometre orbital rail line once it deems the state’s health system is fixed.

Guy announced he would press pause on the loop – the first stage of which will cost at least $34.5 billion – and redirect spending to new hospitals and improvements to the ambulance system, setting up an election showdown over infrastructure priorities.

Matthew Guy has promised to redirect rail loop spending to new hospitals and improvements to the ambulance system.Credit: Wayne Taylor

“There’s no use having a train seat when you can’t have a hospital bed,” he said.

“[Premier Daniel] Andrews’ priority is to get a train seat to get to hospital. My priority is to get you an ambulance and a hospital bed when you get there. That what this election is about: his rail tunnel or me fixing the health service.”

The Andrews government said the opposition’s pledge would jeopardise thousands of jobs, but Guy said many new jobs would be created in the process of upgrading the health system.

Asked if the Coalition would ever build the loop, Guy said: “The project is being shelved. When the state can afford it, we might be able to build it.”

Shadow treasurer David Davis could not say when the Coalition would make a call on whether to proceed with the project, arguing the government’s budget figures could not be trusted.

In April, The Age revealed the Coalition was considering dumping the rail loop and auditing Victoria’s project pipeline, which is the biggest in the country but has included over-budget and late projects.

At the time, opposition transport infrastructure spokesman Matt Bach said the Coalition’s worries about the project stemmed largely from an Age investigation last August detailing the secretive and unorthodox conception of the loop, which was led by consultants at PwC.

Guy claimed the project was “a project dreamt up by one man [Andrews] for one aim: his.

“I don’t think anyone knew anything about this project. It had been dreamt up on the back of an envelope by the premier. It hadn’t gone to Infrastructure Victoria, it hadn’t gone to Infrastructure Australia, hadn’t got a business case. If you want to do projects, do them properly.”

The state’s contribution to stage one is about $11 billion (with the rest coming from federal and private investment and value capture), meaning savings to the budget created by cancelling the project are far less than the $34.5 billion overall cost. An even smaller proportion is budgeted over the next four years.

The opposition’s policy is reminiscent of Andrews’ call to scrap the East West Link toll road before the 2014 election. Andrews spent more than $1 billion cancelling a contract signed by the previous Coalition government. However, Guy said “we won’t rip up those contracts” signed by the Andrews government for early works, which total about $2.2 billion. The government is seeking bidders for a larger package of tunnelling works.

Deputy premier Jacinta Allan, also the minister responsible for the Suburban Rail Loop, said: “By cutting the suburban rail loop, you’re cutting thousands and thousands of jobs.”

The Andrews government’s planned Suburban Rail Loop.Credit:

Highlighting the government’s perception of the project’s electoral benefit, Allan said Guy was telling the people of Cheltenham, Glen Waverley, Clayton, Monash, Burwood and Box Hill they would not be getting “their brand new train stations”.

“It’s the project Victorians voted for,” she said.

Some transport experts have questioned if the project – which some believe could end up costing nearly $100 billion when it connects Melbourne Airport to Werribee – provides value for money post-pandemic when train use has fallen. Other experts support an orbital loop and argue it will lead to a more livable future Melbourne with added density in middle-ring suburbs.

An environmental approval process was completed for the first stage of the loop last week.

Premier Daniel Andrews and Jacinta Allan, now his deputy, inspect works on the Suburban Rail Loop station in Clayton earlier this year.Credit: Andrew Henshaw

Prime Minister Anthony Albanese committed $2.2 billion before the May election as an initial investment in the 90-kilometre orbital railway through Melbourne’s middle suburbs. Victoria is seeking another $9.3 billion in federal funds.

But Infrastructure Australia – the advisory body that helps the federal government decide how best to use taxpayer money – has confirmed it has not received a detailed financial plan for the project, preventing it from assessing whether it deserves further funding.

Infrastructure Partnerships Australia, which represents large building firms, said: “Matthew Guy was on the right side of history when he railed against the cancellation of the East West Link contract, this time he’s picked up the wrong playbook.”

“Certainty is crucial in infrastructure, with major projects spanning a decade, and programs often multiple decades; we can’t afford to signal to global markets that every election will see the map re-drawn,” the group’s chief executive, Adrian Dwyer, said.

Victorian Trades Hall Council secretary Luke Hilakari said the project was “visionary” and Guy was more interested in electioneering than Melbourne’s future infrastructure needs.

“The suggestion that he would redirect these funds into health would be laughable if the record on Liberals and health in Victoria wasn’t so serious,” he said.

The Andrews government believes the loop is popular in the suburbs it runs through, making the opposition’s pledge politically risky, given it needs to win back marginal eastern suburbs seats where new stations are built.

The fight over the rail line has added intrigue because Andrews’ most likely successor, Allan, is the minister for the Suburban Rail Loop and in charge of infrastructure projects.

The Coalition announcement is the second policy pitch this week after a commitment to make transport free for health workers. Nick McGowan, Guy’s new chief of staff, intends to use a series of policy pronouncements to allow Guy to move on from weeks of answering questions about a donor scandal.

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