Hundreds of tradespeople will be seconded to other projects after the Andrews government confirmed Melbourne Airport Rail Link construction would be paused, awaiting the results of a major Commonwealth review of the country’s infrastructure pipeline.
Deputy Premier Jacinta Allan on Wednesday ended weeks of speculation about the future of the long-awaited rail line, saying works would be temporarily halted on the $13 billion Airport Rail Link, as well as upgrades of Clyde, McGregor and Racecourse roads.
“States [were] informed that no new contracts to progress works can be entered into during the review period, without express permission of the Commonwealth government,” Allan said in a statement.
“That means projects that are moving from early works packages cannot move to the next phase of works for the review period ... To ensure certainty for workers during this time, they may be temporarily redeployed to other Big Build sites where their skills and experience are useful for major works while the review is under way.”
The Albanese government earlier this month announced it had launched a 90-day probe into the $120 billion federal infrastructure pipeline to find savings and scrap unnecessary projects announced to win votes rather than address community needs.
The review was spurred partly by a spike in material costs driven by supply shocks and a 95,000-person worker shortage that has stretched the ability of construction firms to build dozens of megaprojects announced by states in recent years.
An artist’s impression of a proposed elevated rail station at Melbourne Airport which remains in limbo.
The Age previously revealed the Victorian government asked the Commonwealth for a four-year delay to the construction of the airport rail, despite spending $1 billion on early construction works, fuelling opposition claims the state’s infrastructure blowouts led to setbacks on key projects.
“Airport rail is basic infrastructure in almost every major city around Australia and the world, yet in Victoria, we just can’t seem to get it done,” Deputy Opposition Leader David Southwick said. “There can be no more excuses. The money for this project is available and the Andrews government should be getting on with delivering this important project.”
Industry sources were confident construction workers on the paused projects could be redeployed, but said it was inevitable there would be job losses given the significant rise in the number of tradespeople to meet the recent booming demand for labour on state transport infrastructure projects.
One industry source, who spoke on the condition of anonymity because they were not authorised to speak publicly, said some in the sector were viewing the pause as a “good correction” because the industry had been struggling to keep up with demand.
Transport Infrastructure Minister Jacinta Allan and former federal urban infrastructure minister Paul Fletcher holding a joint press conference on the Airport Rail Link in 2021.Credit: Jason South
Melbourne Airport Rail director Ben Ryan wrote to all contractors on the Airport Rail Link on Wednesday, advising them it was “imperative” they manage their expenditure within the approved cap.
“We appreciate that this may involve a level of workforce demobilisation,” Ryan said in a letter to contractors
“Any expenditure beyond the agreed cap will not be reimbursed.”
John Hearsch, from transport advocacy and research group Rail Futures Institute, said he did not believe slamming the brakes on the airport rail was the “end of the world” as long as the government remained committed to delivering the project in the near future.
“Pausing it does give an opportunity to have another review about the scope and the way it links to the rest of the network,” Hearsch said. “But the other concern is the huge amount of money going into the Suburban Rail Loop for reasons I don’t understand apart from it being the premier’s pet project.”
The Suburban Rail Loop has been shielded from the review because it was an election promise. Prime Minister Anthony Albanese pledged $2.2 billion for the rail line during last year’s election campaign.
Construction, Forestry, Mining and Energy Union Victorian secretary John Setka said the workforce needed confidence in the infrastructure pipeline.
“Rather than building everything at once, what’s important to the workforce is certainty and consistency,” Setka said. “The massive and sudden increase in major transport infrastructure projects have seen an influx of companies not equipped to build at this level.”
Former department secretary Mike Mrdak, Infrastructure Australia acting board member Clare Gardiner-Barnes and senior West Australian transport bureaucrat Reece Waldock will conduct the review.
The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.