Suburban Rail Loop: the right track or ‘extravagance and folly’?

When Daniel Andrews travelled to Box Hill on August 28, 2018 to announce the “biggest transformation of public transport in Australian history”, it wasn’t the first time a politician had spruiked a circular train line through Melbourne’s eastern suburbs.

One hundred and thirty-four years earlier Duncan Gillies, the commissioner for railways and a future premier, had claimed that building a new rail line from Oakleigh to Fairfield was “almost indispensable” to the booming city.

A talented young engineer, John Monash, was commissioned to build that connection through Kew East, Camberwell, Burwood, Ashburton and Malvern East.

But when the Outer Circle Railway opened in 1891, it connected a string of mostly empty paddocks and was a financial disaster. The government shut the northern section of the line after just two years and the whole line after six.

This “extravagant waste of public money” was an inevitable one, historians David Beardsell and Bruce Herbert write in their 1979 book The Outer Circle. The line never had an economic case but the idea was popular, so politicians “bowed to public pressure in their desire to win votes”.

The project Andrews announced in 2018 - the Suburban Rail Loop - was also wildly popular with voters. His concept of a 90-kilometre rail connection snaking from Cheltenham in the south-east up to Melbourne Airport and finally west to Werribee fuelled the “Danslide” which returned him to power with an increased majority three months later.

Transport infrastructure Minister Jacinta Alan and the “Deepdene Dasher” in 1926 at Deepdene station, part of the original Outer Circle Line.Credit: The Age

Four years on, the Suburban Rail Loop is more than just a grand vision with unconfirmed costs, funding or even a clear design. Labor is now promising to start major construction on a $35 billion, 26-kilometre section from Cheltenham to Box Hill if it wins a third term in government next Saturday.

The underground line stopping at Clayton, Monash, Glen Waverley and Burwood would open by 2035, but an Andrews victory won’t guarantee the northern or western legs are ever built. Labor says that is for future governments to decide.

As the Loop has inched from concept to reality, there have been growing concerns that the history of the Outer Circle Line could be repeating. Persistent criticism has targeted the Loop’s economic case, its “city-shaping” ambitions and whether the biggest transport investment in Victoria’s history is the project the state needs.

The Coalition says the Loop is a waste of money and is promising to redirect $8.7 billion of state funding for the $35 billion project to Victoria’s struggling health system, setting up the November 26 poll as a referendum on the project.

Voters told The Age as part of its Victoria’s Agenda project they wanted to hear politicians explain how they would handle the state’s growing population, with plans to protect livability and deliver services a key concern.

Melbourne has grown by 20 per cent over the past decade to hit five million people, and pre-COVID was forecast to reach 9 million around the middle of this century – the same size London is today.

Transport Infrastructure Minister Jacinta Allan says the Loop is how Melbourne can remain a livable and functioning city at that size, linking the “spokes” of our rail network so people can travel between middle suburbs on public transport rather than by car.

Just as important is the development of station “precincts” as residential and employment hotspots, redirecting growth away from the urban fringe and turning the CBD-focused Melbourne into a “city of centres”.

“Cities get to a particular size and they need more than just their radial network,” she says, pointing to London and Paris.

“Melbourne is a growing city and we want to get ahead of it. These projects are either done too late or they’re not done at all. The alternative is the city grinds to a halt - that’s why we have to do something.”

The Loop is the latest and largest instalment of the Andrews government’s “Big Build”, which includes the Metro Tunnel Project ($12.6 billion), the Airport Rail Link ($13 billion and now rebranded as part of the Loop), the West Gate Tunnel road project ($10 billion), ongoing level crossing removals, and the North East Link, a toll road spanning up to 20 lanes ($15.4 billion). The massive infrastructure pipeline is forecast to push Victoria’s debt to $167.5 billion by 2026 - the highest it has been since the early 1970s.

But Mark Melvin, CEO of the influential Committee for Melbourne, says Victorians should be concerned about whether that pipeline of mega-projects is what the state needs.

“COVID has changed everything,” he says. “Working patterns have changed, therefore transport patterns have changed - it’s time to reassess all of the stuff we agreed to before COVID.”

Flexible working conditions embedded during the pandemic appears have made a lasting impact: Property Council data shows CBD offices were only still 32 per cent full on Mondays and Fridays during October.

Melvin says the pressing issue for Melbourne is that only 22 per cent of people live within 500 metres of regular public transport, compared to 51 per cent in Berlin and 40 per cent in Toronto.

The Committee for Melbourne - which brings together business, academic and community sector leaders - wants the Loop and all other major projects to be reassessed against other potential investments that could do more to close this gap. Melvin lists major reform of the bus network or another cross-city rail tunnel (the proposed Melbourne Metro 2) as key candidates.

“We’ve got huge debt, rising interest rates ... a skill shortage, a labour shortage, rising inflation - we can’t be doing everything all at the same time,” he says.

Concerns Victoria is not prioritising the most worthy projects are fuelled by how the Loop was conceived, in a secret process involving a team of consultants and without advice from key bureaucrats.

An orbital rail line has not appeared in any long-term government transport plan, including the 30-year strategy the government advisory body Infrastructure Victoria produced in 2016.

That strategy urged the government to prioritise electric train services to Melbourne’s outer west (which Labor promised in 2018 but now says it can’t start on for at least another six years while it completes other western upgrades) and prepare for the Melbourne Metro 2 tunnel, to allow more frequent services across the rail network.

John Stone, a senior lecturer in transport planning at Melbourne University, thinks Victoria is not acting fast enough on its most pressing transport need - a major investment in the bus network.

That was particularly urgent in the western suburbs, he says, where promised rail upgrades were not yet underway and communities are paying a “huge social cost of having public transport that doesn’t do the job”.

Electric buses can deliver a fast, frequent and direct network that is a real alternative to driving and would also stimulate new urban development over a greater area than the Loop, he says, which would tightly concentrate benefits around the stations while “leaving everybody else in the car-dependent status quo”.

“All these projects need to be reassessed against the urgent need to build a clean and effective public transport system that brings climate justice to the suburbs,” Stone says. “We have to be asking the question: how can we help people to leave their car at home, how can they have one less car in their household?”

However Professor Graham Currie, a public transport planning expert at Monash University, says the size of Melbourne’s impending transport challenge demands a solution like the Loop to transform the city in a way buses or the existing rail network never could.

Daniel Andrews and Jacinta Allan announcing the Suburban Rail Loop in Box Hill in 2018.Credit: Joe Armao

“We’ve got this festering problem with the future of the city - we plan to grow so much and we just don’t have any transport alternatives that are going to work for us,” Currie says.

“Sometimes you need to step out there and do something big to change the future in a positive way - you need the visionary approach.”

Transport is one side of dealing with Melbourne’s growing pains: the other is where we live and need to go. Plan Melbourne, a 2014 government blueprint to preserve Melbourne’s livability, has failed to redirect population growth into middle-ring suburbs and away from the city’s outer fringe, where services are scarce and more expensive to deliver.

Allan says that the Loop is how the government can finally act on that ambition by concentrating housing, jobs, education and activity in new “precincts” along the line.

“We need to address it because the alternative is to see our city and state become less livable, less productive,” she says.

Planning documents show that the number of people living in the six new precinct areas will more than double by 2056 if it goes ahead, from 131,000 to 306,500. The number of jobs in those areas will almost triple to 353,500.

But John Stanley, one of Plan Melbourne’s authors, says those numbers are underwhelming in the context of Melbourne growing by 4 million people over the same period.

The adjunct professor at the University of Sydney worries the Loop will concentrate modest population growth around each station with long distances in between, rather than throughout the whole middle suburban corridor, when a cheaper transport solution like light rail or buses could cover a larger area.

“If Melbourne is going to grow by 4 million, then at least 2 million of that needs to be in corridors really well suited to public transport,” he says. “We’ve hung all our eggs in one basket and it’s a very expensive basket.”

Local councils, meanwhile, are concerned that the Suburban Rail Loop Authority will take control of building height limits and other planning decisions across the “precinct” areas.

The Loop authority has flagged “new planning settings” to enable new development in those areas, which at 8 square kilometres are each roughly six times the size of Melbourne’s CBD.

City of Whitehorse mayor Mark Lane says fears about overdevelopment across a huge area of Box Hill are amplified by the government’s plan to use “value capture” to pay for one-third of the Loop project. Levies on new development permitted under the new planning scheme are one way it could raise that $12 billion.

“Where is that value coming from?” Lane says. “Are they going to allow gross developments to enable them to receive all that money?”

Allan says the Loop authority will “be working with councils and local communities to consider how we can support that sort of activity to continue to make them great places to live”.

The opposition’s transport infrastructure spokesman, Matt Bach, attacks the Loop’s credibility by pointing to the scathing assessment of its business case by the Victorian Auditor-General’s Office: it concluded the document was “not sufficiently comprehensive, robust or transparent” and “did not support informed investment decisions”.

The Coalition has instead promised smaller upgrades to the public transport system: extending the 75 tram to Westfield Knox, the 46 tram to Doncaster, the Frankston Line to Baxter and the Cranbourne Line to Clyde if it’s elected.

“We can get really significant bang for buck ... expanding on the infrastructure that we already have to allow much greater access to public transport,” Bach says.

Allan says fears that the Loop comes at the cost of more worthy projects are unfounded. If Victoria secures $12 billion in federal funding (the Albanese government has so far committed $2.2 billion) then the state will spend less than $1 billion a year building the eastern stage.

As existing work like the Metro Tunnel and West Gate are completed, Victoria will “absolutely” have financial and construction industry capacity to embark on the next major project, she says.

Meanwhile, she says the government is progressing plans to reform the bus network and upgrades around the V/Line and Metro network were already delivering better train services to the outer western suburbs.

A big unknown hanging over the Loop is whether any future government picks up the mantle and builds the northern section to Melbourne Airport by 2056, which underpins the $35 billion eastern section’s economic benefits and patronage forecasts.

“That government of the day will have to explain why they’ve taken away the opportunity to build a train line to Doncaster, a train line that will connect the south-east around to the airport,” Allan says.

A standalone eastern section would still be “transformational for how people move around the city”, she says, allowing connections with existing train lines through the eastern suburbs and providing easier access to employment and education centres like Monash and Deakin universities.

In April 1893, when the Fairfield Park to Riversdale section of the Outer Circle was shut down in the face of mounting financial losses, The Age editorialised that the project was “perhaps the most striking of the many instances recorded in these columns of waste, extravagance and folly” in the then colony.

“A brief history of the work will be equally instructive and entertaining, if the latter term can be appropriately applied to a plain narrative of gross engineering blundering, extravagant railway management, and a complete misconception of the requirements of the times,” it wrote.

The Suburban Rail Loop has a long journey ahead before it can be shown either as folly or the visionary project Melbourne needs. The first stop: election day.