Big-ticket transport projects face delays as budget pressures build

The Andrews government has put a high-speed rail service between Geelong and Melbourne on the back burner, an insider says, amid speculation budget pressures are also threatening to delay the big-ticket Melbourne Airport Rail project.

Any delay to the Geelong Fast Rail project will also hold up the long-promised faster train services through Melbourne’s west, as the government has repeatedly said the Geelong line needs to be completed before the Western Rail Plan.

A government minister, speaking confidentially to discuss the administration’s thinking, told The Sunday Age that the Geelong Fast Rail project was “no longer a priority”.

The timelines of both the Geelong and airport rail transport projects are likely to be revised in next month’s state budget because of an overheated construction market and snowballing net debt, tipped to reach $165 billion by 2025-26, government sources confirmed.

Work on the projects, jointly funded by the state and federal governments, has barely begun – even though a completion date for Melbourne Airport Rail was previously brought forward by two years to 2029.

Geelong Fast Rail, announced by the former Coalition government before the 2019 federal election, was initially dismissed by Premier Daniel Andrews as being in the “never-never” and “not relevant” before the Victorian government matched the Commonwealth’s $2 billion investment.

The Morrison and Andrews governments committed $4 billion towards fast rail between Melbourne and Geelong. Credit: Luis Enrique Ascui

It was supposed to cut travel times to 32 minutes, but that was extended out to about 50 minutes – only marginally faster than existing trains.

“We were set up by the Morrison government on that one,” the minister said.

The Western Rail Plan was announced before the 2018 election. The Victorian government has repeatedly said the Geelong project needed to be completed before tracks to Melton and Wyndham Vale could be electrified and separated from regional services. Putting the Geelong Fast Rail on ice means that progress would be further delayed.

Paul Westcott, Geelong convenor of the Public Transport Users Association, said the Geelong Fast Rail plan was always a pie in the sky idea.

“We wouldn’t be particularly concerned if this project was delayed,” he said.

“What we’d like to see is the Western Rail Plan, as we understood it, before these other things were sort of hucked [thrown] into it ... It will be disappointing if it means that nothing is done, or virtually nothing is done, to support transport provision to the west.”

A completion date for the Western Rail Plan was listed as “to be confirmed” in the 2022-23 state budget, with $21 million set aside.

Construction on the Geelong Fast Rail project was due to begin this year, with $123.5 million budgeted for capital works in 2022-23.

The Commonwealth and Victorian governments have separately committed $5 billion each for the Melbourne Airport Rail line. Given the completion date was brought forward two years, it could provide the government some scope to delay it. Some early work has begun.

An artist's impression of how Melbourne Airport will look, with the proposed rail station at the bottom of the image.Credit: Melbourne Airport

A spokesman for Melbourne Airport said: “We continue to work with the government to progress the project.”

Federal Treasurer Jim Chalmers has been speaking with the states about infrastructure spending and budget constraints.

In a statement, a spokeswoman for federal Transport and Infrastructure Minister Catherine King said: “The Australian government is continually working with the states and territories on their priorities.”

A state government spokeswoman said any decisions about federal funding of Victorian infrastructure projects was a matter for them, but acknowledged budget constraints.

“Just as all Victorians are facing cost of living challenges with rising interest rates and inflation, the Victorian budget will also take into account current economic conditions.”

Opposition transport spokesman David Southwick said possible delays to the projects were not surprising because the government had blown the budget.

“The Big Build has become the big budget blowout that is grinding major projects to a halt. This is really disappointing for Victorians who want an airport rail.”

An artist’s impression of a proposed elevated rail station at Melbourne Airport when a new link to the CBD is built.

Southwick said the two projects were necessary, not optional, and pausing them would cost jobs.

Asked whether the timelines for infrastructure projects could be pushed out to relieve budget constraints, Andrews on Thursday said the overheated construction market was struggling to match demand in Victoria and pointed out the former Liberal NSW government had delayed work.

“I’m not foreshadowing that. I’m just simply saying there is pressure that’s real ... But there are always limits, there are always limits,” Andrews said.

“It’s a matter of a pretty hot construction market. All of those matters will be addressed in the budget, but you can only get away with what the market can actually deliver.

“But we’ve got more to do than ever, and we’re pushing ahead, getting it done. Exactly the sequence, exactly the way that cash flows, exactly how long it takes to do, that’s always project by project.”

The Victorian budget will be delivered on May 23.

With Annika Smethurst

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