Jacinta Allan has some time to delay airport rail, but not for long

When the Tullamarine Freeway reaches capacity next decade, creeping congestion will eventually double your time sitting on the SkyBus to Melbourne Airport. As the city grows, driving from Parkville will become a 68-minute slog.

But a new rail link from the CBD via Sunshine in the west, if it gets built, will be just half an hour.

After five years at the negotiating table with the airport, first as transport infrastructure minister and now as premier, Jacinta Allan received a welcome text message from the chief executive Lorie Argus late last Sunday night. The private operators had capitulated on demands for an underground station, ending a stalemate that delayed the project at least four years.

Allan should have been thrilled.

Melbourne Airport said it would compromise to pursue the above-ground option.Credit: Melbourne Airport

Instead the premier maintained the rail line was years away.

While the main excuse not to proceed had evaporated, she insisted the timeline could not be fast-tracked from 2033 because of the airport’s years of “unreasonable demands” that they could not “wish away”. With a likely price tag of more than $13 billion – leaving a funding shortfall of at least $3 billion – it left open speculation that either Allan or Treasurer Tim Pallas were not so keen to build it while the east reaps the $35 billion first leg of the Suburban Rail Loop.

“I don’t know that she’s got the money,” one western suburbs MP said. “I don’t think there’s an unwillingness, given the pressure from caucus. North-west MPs have a very strong desire to get it done ASAP.”

This masthead spoke to more than a dozen people within government, industry and other stakeholders to understand why a popular project embedded in the public consciousness since it was first floated in the 1960s had become a political quagmire. They spoke anonymously to protect their positions and detail internal discussions.

They disputed a perception that the premier’s office opposes the project. But several said its 2029 completion date had ultimately become the casualty of government budgets ravaged by COVID-19 debt and competing priorities.

The seeds of the airport rail saga can be traced back to April 2021. A year and a half from the 2022 state election, the government released its business case for the Suburban Rail Loop. Internally, sources said, it was clear the project was the government’s key priority even though the airport rail was itself advertised as part of the loop.

It may not have been obvious, but this was publicly hinted at a disastrous press conference that month when Allan and the SRL’s executive general manager of rail and infrastructure, Nicole Stoddart, had to defend why the rail loop would not be one continuous journey.

The first two legs, from the south-east up to the airport, would use different tracks and trains to the airport rail link through Sunshine. Passengers would have to hop off at Tullamarine and change trains if they wanted to continue along the “loop”.

“[Airport rail] is an independent line,” Stoddart said at the time.

The warning signs were there. But challenging negotiations with the airport within a limited budget remained out of public view. One source said the project was already unlikely to fit within the $10 billion committed by the state and federal governments, leaving no room for the airport’s more expensive preference that the railway station at Tullamarine go underground.

A year ago, MPs in the north and west were blindsided when the state moved to break the deadlock by pushing the Commonwealth to include it in a review of the infrastructure pipeline. Federal Transport Minister Catherine King ultimately ruled it should proceed.

They were blindsided again when the May state budget locked in a four-year delay.

One source, backed by independent transport expert Marion Terrill, said the delay was realistic given worker shortages and price hikes in construction. Others, including Rail Futures Institute president John Hearsch, said the delay was a cover for the uncertainty over who would make up a shortfall in the project’s expected costs.

Another said the delay meant the state’s $5 billion commitment was removed from Victoria’s debt profile, easing pressure from global ratings agencies who will this month meet with Pallas in the US.

Now that the obstacle over the station has passed, government insiders said a new push was under way to encourage the Commonwealth to make its $5 billion contribution available before the state’s. With the federal election approaching, the Albanese government could be convinced to promise additional funding.

Any extra federal cash would be welcomed by the Victorian premier, who has long complained about getting a raw deal from Canberra.

In a submission to King’s now-completed infrastructure review, Victoria argued it had not received its fair share for two decades and had been shortchanged $10 billion or more.

That submission failed to name airport rail, instead calling out two other signature projects. It said Victoria would continue to “seek a fairer share of funding from the Commonwealth and a true partnership on nationally significant projects, such as the Suburban Rail Loop and the North East Link Project”.

The Albanese government has committed $2.2 billion to the first stage of the rail loop from Cheltenham to Box Hill, $9.3 billion below what Victoria hopes for.

When the front pages of The Age and Herald Sun splashed with the airport’s backdown, Allan on Monday announced the preferred bidder to do the next phase of tunnelling for SRL East. The timing was coincidental, but internally it was viewed as a statement of the government’s priorities.

The eastern section of the SRL will include six new stations. Besides the Tullamarine station, the airport rail link will bring the west only one extra – a point that MPs from the area freely make while their voters sit on congested roads.

The government just last week purchased land for the Keilor East station that will form part of the project, after Deputy Premier Ben Carroll in May declared he would not leave parliament until it was delivered for his Niddrie electorate. Some point to this as evidence of the government’s commitment to airport rail.

“We had an ambitious plan to get this project done by 2029, but the airport’s unreasonable demands have meant project delays of four years,” a government spokesman said.

Transport Infrastructure Minister Danny Pearson will meet with the airport this month.

MPs have been lobbying for extra stations on the Wyndham Vale line to fill transport deserts. The government has dithered for years on electrifying the crowded Melton line and progressing the Western Rail Plan. However, a $650 million upgrade to the Melton line will increase its capacity 50 per cent.

One government source said the issue could come to a head at a caucus conference in coming weeks, where Allan and Pearson, the member for Essendon, would have to explain the minimum four-year delay to MPs looking to relieve angst in the western suburbs.

“The obstacle has been removed. It is becoming less about the project and more about the willingness of the government to actually listen to concerns,” they said.

At Victorian Labor’s state conference in May, hundreds of delegates supported a motion condemning the airport. But they also fired a shot at the state government, demanding they “get serious about the development”.

One MP believed state Labor was at risk of mirroring the party’s fortunes in western Sydney and could lose seats in the red wall of the north-west if they “keep taking it for granted, shaving off votes”.

Asked on Thursday whether the government could bring forward other transport projects to benefit the west, Allan said they were bringing forward level crossing removals on the Werribee and Sunbury lines and delivering the Metro Tunnel a year early.

“That [Metro Tunnel] will provide a massive increase to train services to the western suburbs, for the city too, but particularly for the western suburbs.”

As a western suburbs MP pointed out, the east stands to benefit from the Metro Tunnel. And level crossing removals are not special to the west.

Allan would not commit to including airport rail in the budget before the 2026 election in an interview on ABC Radio’s Melbourne Mornings.

“We need to get to the point of having a project ready to go, to identify how much additional funding that project may need. And it’s at that point we will make that decision,” she said.

The airport is still waiting for final sign-off from the Commonwealth for its third runway, which was viewed by some in Labor as a possible bargaining chip to hold over the private operators. The airport has now pivoted to seeking the rail line’s completion for 2030, in line with the opening of the runway.

Hearsch, from the Rail Futures Institute, said airport rail was even more important given COVID-19 supercharged car dependence.

“The reality is this seems to be a cover for the fact that the state’s run out of money,” Hearsch said. “Which is pretty poor when the Suburban Rail Loop is going like crazy.”

Redbridge pollster Kos Samaras, a former Labor strategist, said the government appeared to have made a political calculation that there were more votes to protect in newly won seats in the east than there were to lose in the heartland of the west.

But while Samaras said those seats were at risk of abandoning Labor at the 2026 election after decades of neglect, he said it would be misguided for those MPs to fixate on the airport rail link.

“The sentiment is, ‘It’s through our suburbs, but really it’s not for us,’ ” Samaras said. “Labor can get away with [delaying airport rail] if they offer a vision of what the future looks like for the west under Labor.”

He said a bigger vote winner would be upgrading existing lines in the west. “All that’s coming up now is the project’s not being built, so that’s a negative because there’s no counter.”

By 2031, one in two trips to the airport will be employees such as baggage handlers commuting to work. Eighty-five per cent of them live in the north-west and west, according to the business case.

Transport Workers Union state secretary Mem Suleyman said there were thousands of workers at the airport who had a right to efficient commutes.

“With the airport’s commitment to co-operate and the billions being invested by governments, we must now get straight on the tools and in the trucks to build the rail link,” he said.

Some said that many of the workers, largely based in Sunbury and Sydenham, wouldn’t bother driving to their station and taking two trains. Driving would still be faster for a lot of them.

But airport rail would still bring the secondary benefit of taking cars off roads to make their commute less congested.

The business case predicted the Tullamarine Freeway would reach capacity in 2036. That meant, as Infrastructure Australia said when it declined to list the project as a priority, that there’s no rush. It can wait a few years.

What is already a priority project of national significance, according to Infrastructure Australia, is the Sunshine precinct.

It is slated to become a transport “super hub” and includes a major urban renewal project around Albion station where the state hopes to create a new housing and jobs precinct.

Brimbank mayor Ranka Rasic said Victoria should get started on the Sunshine hub, which would help the council meet ambitious housing targets set by the state.

“I urge the premier to reassess the revised timeline of a four-year delay and treat the Melbourne Airport Rail project with the same priority as the SRL East, which will service the better connected and more affluent suburbs in Melbourne’s east.”

The council’s deputy mayor Jae Papalia said the rail link and its precincts were needed to bring jobs to the west. So were better bus connections for the poorly serviced area.

“Unfortunately, we feel a little bit left behind.”

Neil Scales, appointed by the Commonwealth to end the stalemate, last month recommended the federal government update its modelling on traffic congestion on the Tullamarine Freeway.

Lorie Argus, the airport chief executive, said congestion was worse than the business case forecast after COVID-19. Ninety per cent of all people heading to the airport go by car.

“Everyone agrees we need a train, and we don’t really want to find ourselves a couple of years down the road still debating our end,” Argus said.

If the Tulla reaches capacity before 2036, predicted travel times will be even worse – and sooner.

That could leave the state without much wiggle room beyond the 2033 timeline.

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