Minister Harriet Shing dismisses Suburban Rail Loop cost and funding concerns

The Allan government’s minister for its contentious Suburban Rail Loop in Melbourne has dismissed concerns about increases to construction costs and a project funding black hole.

Suburban Rail Loop Minister Harriet Shing says the project is currently on time and on budget. Picture: Ian Currie/NewsWire

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The Allan government’s Suburban Rail Loop minister has dismissed concerns about increases to construction costs and the project’s funding black hole, insisting it remains on time and on budget.

Harriet Shing told the state’s public accounts and estimates committee on Friday the first stage of the Allan government’s signature SRL project, SRL East, was on track to be delivered within its $34.5bn budget and in time for its 2035 opening date.

There is currently at minimum a $9.3bn gap in funding for the SRL East, which will run between Cheltenham and Box Hill.

The Victorian government, which hascommitted $11.5bn to the project, is banking on the federal government contributing the same amount and plans to fund the remaining $11.5bn via “value capture”.

However, the federal government has so far provided only $2.2bn of the $11.5bn sought and has not yet committed further funding.

On Friday, Liberal MP and committee member Richard Welch asked Ms Shing about the SRL’s funding black hole and questioned how its $34.5bn budget, announced in 2021, was immune from the subsequent rise in construction costs.

Ms Shing dismissed Mr Welch’s concerns and pointed to the “industry and commercial opportunities that are provided in a project of this magnitude” and the “value that will be realised as a consequence of this project”.

During the heated estimates hearing, Mr Welch accused Ms Shing of failing to provide Infrastructure Australia with updated costings. “You are putting this state in great jeopardy because you are playing chicken with this funding,” he said.

But Ms Shing said she was providing Infrastructure Australia and the federal infrastructure department with “information on a regular basis”.

“We’re working with the federal department, including their work with the advisory body Infrastructure Australia, to continue discussions on the further work for release of additional commonwealth funding,” the minister said. She declined to provide a date for when the $11.5bn of “value capture” funding would start being realised.

Her comments came after an Infrastructure Australia report earlier this year said it had “low confidence” in the $34.5bn cost estimate for SRL East, and recommended the state government develop “exit strategies” should it be unable to deliver the project.

It also called on the government to provide further information about how value capture would realise the required $11.5bn.