Victorians deserve better if we are locked into Suburban Rail Loop

The state government this week did something rather remarkable. It set in stone a gossamer. Or so it would have us believe.

We are referring to the Suburban Rail Loop. Premier Jacinta Allan announced on Sunday the $1.7 billion contract to build 10-kilometre twin tunnels between Glen Waverley and Box Hill had been awarded to consortium Terra Verde. Construction giant WeBuild would lead the project, she said, under a contract that was “locked in”, with tunnel work to start in 2026. “We are not wasting a moment,” she said. If only we could be as confident about other wastage, premier.

Premier Jacinta Allan has announced the final tunnelling contract for the first stage of the SRL project has been awarded to a global construction consortium at a cost of $1.7 billion.Credit: Penny Stephens

It is not unusual for big infrastructure projects with an accepted value to eventually cost more than initially declared. But the SRL occupies an unwelcome niche in which the costs have risen even before its worth to the state has been established.

The concerns surrounding it are not secondary issues – they are crucial to its viability and its relevance to the city and, broadly, the state.

The SRL was announced by then-premier Daniel Andrews in 2018 via Facebook in the “phoney war” months before that year’s November election. Allan was transport minister at the time. The loop, if and when it is completed, would link Cheltenham to Werribee, a distance of 90 kilometres.

The Age welcomed the idea, as a concept, with reservations over funding and details. Six years and several investigations later – notably by the Victorian Ombudsman, National Audit Office, the Parliamentary Budget Office and The Age – those reservations have grown into alarm.

The premier’s announcement of the signing of a $1.7 billion contract at the weekend follows a predictable track for SRL milestones, where the intentions are large and the detail is light.

At the most basic level, the government cannot say how it will be funded. How can the premier, in good conscience to her constituents, sign a contract when the money for the mega-project is not locked in?

Two months ago, The Age reported that the Allan government still had not persuaded the Commonwealth of the worth of the project and, that being so, it was holding on to the $2.2 billion Anthony Albanese had pledged to the project just before the 2022 federal election. Two years later, Victoria has still not provided a credible case for the money.

The national acting Auditor-General Rona Mellor said the Albanese government’s funding commitment to the $34.5 billion rail line had not been formally approved.

“As at June 2024, SRL East had yet to go through the formal project approval process, and the department is awaiting a project proposal report from the Victorian government,” her report said. “This process must occur before funding can be expended.”

When considered with then-ombudsman Deborah Glass’ damning report last year, the situation brings this government’s competency into serious question. Glass found, in a report that backed earlier reporting from The Age, that the SRL’s development “was subject to excessive secrecy ... ’proved up’ by consultants rather than developed by public servants”.

The Glass report found the project was the brainchild of Tom Considine, a former chief of staff to Treasurer Tim Pallas. Glass also found Labor had taken the project to the election without input from key stakeholders. The initial development of the SRL was “at odds with core aspects of the Westminster tradition”.

The secrecy conditions imposed on the project are completely out of kilter with that tradition. This for “the biggest public transport project in history”, as Andrews declared in 2018.

Victorians deserve better. It is unarguable that Melbourne, given its population forecast of climbing from its present 5 million population to 9 million by 2050, needs a transport plan that is built into the future needs of the city.

We have not seen compelling evidence that this project meets those needs. We don’t even really know if its supposed benefits outweigh its surging costs.

In 2022, the Parliamentary Budget Office estimated that the nominal cost to build and operate SRL East and North would be $200.3 billion. As night follows day, those numbers are rising. In two years, the office says, that figure has risen $16.4 billion.

That escalating cost is also set against a drastically weakened budget position since the project was first imagined.

After the Commonwealth Games fiasco, which Glass also believes was shrouded in excessive secrecy, a contract should not be locked in without the certainty of funding for its completion, certitude in benefits and a ceiling on costs.

We take no comfort in Transport Infrastructure Minister Danny Pearson saying at the weekend there was no stopping the project. Making a mistake inevitable does not render it anything other than a mistake.

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