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Suburban Rail Loop on track to cost $125b

By Caroline Schelle and Paul Sakkal
Updated

Building the first two stages of the Suburban Rail Loop is expected to cost up to $125 billion – more than double the government’s initial estimate for the entire project.

According to the state parliament’s budget office, which published a report overnight, the north and east sections of the rail loop could blow out to more than $125 billion before its completion in 2085.

Premier Daniel Andrews announced $2.2 billion to kickstart stage one of the Suburban Rail Loop in November 2020.

Premier Daniel Andrews announced $2.2 billion to kickstart stage one of the Suburban Rail Loop in November 2020.Credit: Joe Armao

Initial projections when the project was announced by the state government in 2018 said it would cost $50 billion to build the loop running from Cheltenham to Werribee.

But the forecasts in the budget office’s latest report eclipse those numbers without even accounting for the final stage of the loop, which would link Werribee and Melbourne Airport.

Premier Daniel Andrews said his government was delivering the first stage of the project, from Cheltenham to Box Hill.

“It will not be for our government to build the second and third stages,” Andrews told reporters at a press conference on Thursday.

He said the government provided the $50 billion as an estimate and “did not provide a definitive cost”.

“We are starting this project, it’s fully funded from a state point of view,” the premier said.

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“One sure way to make sure that the Suburban Rail Loop will cost more is to scrap it, delay it, shelve it.”

The first stage of the project, due to be completed in 2035, is expected to cost $33 billion, according to the budget office.

The government initially expected this stage to cost between $30 billion to $34.5 billion.

State Opposition Leader Matthew Guy asked the budget office to cost the entirety of building and running the loop this year.

So far, the state has allocated $11 billion to build the first stage of the project.

That figure would include underground stations, maintenance facilities, substations, the acquisition of rolling stock, and the development of surrounding precincts.

The Andrews government’s planned Suburban Rail Loop.

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

However, some elements of the east and north loop including precinct and complementary projects could not be costed because there was “insufficient publicly available information”.

Running the first two stages of the loop for the first 50 years will add $75 billion to the cost, bringing the total budget to $200 billion.

“This consists of asset expenses of $125,044.5 million and operating expenses of $75,242.9 million,” the report stated.

The first stage of the project, which is already underway and due to be completed in 2035, is expected to cost $33 billion, according to the watchdog.

The government initially expected this stage to cost between $30 billion to $34.5 billion.

The report comes after Guy said he would to shelve the project if the Coalition won this year’s election to spend the savings on rebuilding the state’s healthcare system.

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“There’s no use having a train seat when you can’t have a hospital bed,” he said on Tuesday.

“Andrews’ priority is to get a train seat to get to hospital. My priority is to get you an ambulance and a hospital bed when you get there. That what this election is about: his rail tunnel or me fixing the health service.”

Shadow treasurer David Davis said the money earmarked for the rail project was needed elsewhere.

“This is an alarming revelation but completely unsurprising given Labor’s record of cost blowouts that raises serious questions about the viability of this project,” he said.

“Instead of tying up hundreds of billions for decades to come, we will shelve this project and put every cent into fixing the health crisis.

“When Victorians in need can’t get an ambulance, an answer to a triple-zero call or access critical treatments, it’s clear this is the wrong project at the wrong time.”

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    Original URL: https://www.theage.com.au/politics/victoria/suburban-rail-loop-faces-major-cost-blowout-20220818-p5bare.html