I’m a planning expert and have reviewed the SRL business case. It’s no wonder the feds won’t fund it

For three years now, the Victorian and federal governments have been locked in an impasse over funding the Suburban Rail Loop.

Increasingly, the state government is voicing its frustration at Canberra’s refusal to pay up, but the main reason purse strings are being clutched is simple: the state government’s business plan – and what it lacks – is of major concern to Infrastructure Australia, the independent body advising the federal government.

The Suburban Rail Loop business plan has glaring issues.Credit: Joe Armao

For large-scale infrastructure projects such as the SRL, a business case is the cornerstone document used to assess whether a project should proceed or not. Generally, these documents address three fundamental questions: Does the project have merit? Is the agency overseeing it equipped to manage the risks? What will it cost, and are the benefits worth the expenditure?

I have spent my career preparing and analysing these plans, and I’ve reviewed the SRL business case. The issues are glaring. There is an evaluation of the wrong project, a failure to assess project alternatives, inflated economic benefits, and inadequate planning for risks – to name just a few.

According to the business case, published in August 2021, the SRL is envisioned as an ambitious, city-shaping rail system that will eventually link Cheltenham in the south-east to Werribee in the west via a series of new rail lines. It is proposed to be delivered in stages, beginning with SRL East (Cheltenham to Box Hill), followed by SRL North (Box Hill to Airport), while future stages (Airport to Werribee) remain undefined.

The state government is seeking funding for SRL East, also known as Stage 1, which it aims to open by 2035. In the business case, though, the scope is much broader, combining East and West.

This is problematic for two reasons. First, it doesn’t align with the project currently under construction. Second, it assumes future federal governments will commit to completing both stages – a significant leap of faith.

Infrastructure Australia expects business cases to focus on the immediate project for which funding is sought, not least because political changes and the economic uncertainties can dramatically impact long-term planning. By failing to focus only on the SRL East, the business case muddies the waters and complicates efforts to assess the merits of the project at hand.

This is not helped by the Victorian Minister for Transport Infrastructure Danny Pearson claiming the cost for Stage 2 will not be calculated until after the 2026 state election.

The SRL strategic assessment, published well before the business case in 2018, offered no meaningful exploration of other options, despite many other options being available.

The proposed Suburban Rail Loop.Credit: Supplied

Even if an orbital rail route is the preferred approach, other configurations – light rail technology, different routes, or varied station locations – could likely achieve similar outcomes at a lower cost. For example, many cities have demonstrated how bus transit running high-frequency services along dedicated corridors can provide excellent service outcomes. A network of inner, middle and outer bus transit routes could be built at a much lower cost and improve services across a much wider area. But the failure to compare other options leaves the Victorian government’s rationale for pursuing the SRL unclear.

Of course, all large infrastructure projects are inherently risky, and managing these risks effectively is critical to their success. Unfortunately, the SRL business case lacks in that department, too.

For instance, the document emphasises the role of an experienced rail operator in the early planning stage to ensure reliability, cost management, and achieving patronage targets. Yet despite this being identified as a priority, no operator has yet been engaged, even as design and construction for the project continue to progress.

Without evidence of a detailed, mature risk-management plan, the Suburban Rail Loop Authority’s ability to navigate challenges during construction and operation is in question.

While the SRL promises transformative benefits, its business case falls short of justifying the immense cost (Stage 1 alone is costed at $35 billion). For such an ambitious project, the Victorian government owes the public – and the federal government – clear answers to fundamental questions: Why this project? Why now? And why not explore alternatives?

Until these gaps are addressed, scepticism over the project will persist. After all, good infrastructure isn’t just about bold vision – it’s about meticulous planning and prudent investment.

Eric Keys is a retired transport planner and urban researcher at RMIT.

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