Federal funding for every Victorian infrastructure project - bar Rail Loop - in doubt

Federal funding for every infrastructure project in Victoria – apart from Labor’s signature Suburban Rail Loop – is in doubt under a review of Australia’s construction pipeline that industry experts welcomed as a prudent effort to cancel duds and cut wasteful spending.

But the billions of dollars set aside for Airport Rail, Geelong Fast Rail, North East Link and the M80 Ring Road will stay in Victoria, even if the review in August recommends scrapping the projects.

Premier Daniel Andrews earlier this month.Credit: Chris Hopkins

“Let me assure you – because I’ve had the conversation with [Prime Minister Anthony Albanese] myself, one-on-one, face-to-face – they are all part of this review,” Premier Daniel Andrews said on Wednesday, a day after Treasurer Jim Chalmers handed down his federal budget

“The Commonwealth government have confirmed for us that all money that is allocated to those projects that are under review – and everything is under review other than the Suburban Rail Loop, so all other commitments are all being reviewed – but that money stays in Victoria.

“I don’t think there’s any funding uncertainty … That money, in aggregate, remains with us.”

The 90-day independent review into the Infrastructure Investment Program will be led by former department secretary Mike Mrdak, Infrastructure Australia acting board member Clare Gardiner-Barnes and former senior West Australian transport bureaucrat Reece Waldock.

Treasurer Jim Chalmers and Prime Minister Anthony Albanese on Wednesday.Credit: Alex Ellinghausen

It will focus on keeping projects that “improve long-term productivity, supply chains and economic growth”.

The trio will work directly with the states and territories, and industry and peak bodies would also have the opportunity to make submissions.

A spokeswoman for federal Infrastructure and Transport Minister Catherine King said all projects in the $120 billion program would be reviewed unless they were already under construction or were an election commitment.

“This review, which has the co-operation of the states and territories, will look at what projects are still priorities for the Commonwealth, states and territories.”

The review was announced this month to eke out savings and scrap unnecessary projects after the number of road and rail ventures grew from 150 to 800 under former Coalition governments.

Victorian projects funded under the program include the North East Link, M80 Ring Road, Geelong Fast Rail, the Airport Rail link and the South Geelong to Waurn Ponds duplication.

The troubled Inland Rail project, which would deliver two intermodal freight terminals in Melbourne, is also part of the funding program under review. King last month committed to the two terminals following a review by former Commonwealth energy adviser Kerry Schott.

Former Infrastructure Australia chief executive Philip Davies, a partner at Deloitte, told The Age that COVID-19 had changed the way people worked and moved around cities.

“The demands of the transport network are different,” he said.

“What we have also seen through COVID-19 [is] the fragility of some of our freight networks, and some parts are in need of support in order to help producers move their products to market.”

Davies said Australia had worked hard to “get ahead of the infrastructure game” in recent decades and had a pipeline of projects, but said the review was prudent.

Marion Terrill, the transport and cities director at the Grattan Institute, agreed the pandemic had changed the needs of the community.

She said major projects were too often promised ahead of elections without planning and welcomed “a robust process for cancelling the duds when on closer scrutiny they weren’t worth doing after all”.

“Coming in as a new government to review what’s on the books and have a rethink is very prudent,” Terrill said. “Some of them probably shouldn’t go ahead.”

The Andrews government’s planned Suburban Rail Loop.Credit:

Federal Labor has committed an initial $2.2 billion over five years towards the first section of the Suburban Rail Loop – a 26-kilometre section from Cheltenham to Box Hill – which will cost up to $34.5 billion and is scheduled to open by 2035. Future planned stages would have it extend from Box Hill to Werribee via Melbourne Airport.

Andrews on Wednesday acknowledged state Treasurer Tim Pallas would need to allow for some unknowns on federal funding when the Victorian budget is delivered on May 23.

“We’ll have an appropriate treatment within our budget that takes into account the fact that there are some uncertainties and there are some unknowns. I don’t see that as a negative thing. I don’t see that as a problem,” Andrews said.

“So we will have to wait and see. We can’t build those projects on our own. They are a partnership with the Commonwealth government and the Commonwealth government is reviewing those projects.”

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