Victorian Premier Jacinta Allan silent on $34.5bn Suburban Rail Loop costs update

Jacinta Allan has refused to confirm whether her government will provide an updated cost estimate for its $34.5bn Suburban Rail Loop.

Victorian Premier Jacinta Allan and Minister for the Suburban Rail Loop Harriet Shing. Picture: NewsWire/ David Crosling.

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Victorian Premier Jacinta Allan has refused to reveal whether her government will provide taxpayers with an updated cost estimate for its controversial $34.5bn Suburban Rail Loop.

Despite the nation’s major projects watchdog warning of uncertainty over the SRL’s costs and benefits, the state government has continued to plough ahead with the project, announcing on Monday the commencement of construction at the SRL Clayton station and approval of more than 300 houses in the precinct.

Infrastructure Australia said earlier this year it had “low confidence” in the government’s 2020 cost estimate of $34.5bn for the loop’s first stage and concluded it was likely the economic case for the project was therefore overstated.

Asked on Monday whether the government would provide an ­updated cost estimate and cost-benefit analysis, Ms Allan would not say. She instead pointed to disclosures made upon awarding contracts and the project’s place on Infrastructure Australia’s priority list.

“Infrastructure Australia supports this project,” Ms Allan said.

“Infrastructure Australia said this is a project that our city and state needs because of the benefits that it drives for our city and state in the connection to universities, to jobs, to services and the delivery of more homes. In terms of the investments that we’re making, as we award contracts for this project, we have been providing the latest, up-to-date details of the investment that’s being made.”

The Victorian government, which has committed $11.5bn to the $34.5bn project, is relying on the federal government contributing the same amount and plans to fund the remaining $11.5bn via value capture.

However, Infrastructure Australia has raised concerns about a lack of detail as to how the state government will realise $11.5bn of value capture, while the federal government has so far provided only $2.2bn of the $11.5bn sought and has not yet committed further funding, leaving a minimum $9.3bn gap.

Asked whether she was confident the federal government would commit the $9.3bn and what the plan was if it didn’t, Ms Allan said the Albanese government backed the project.

“The federal Labor government are a partner in this project,” she said. Ms Allan said value capture mechanisms were being worked through and further details would be provided.

“We’ve always been really clear since we announced the delivery of the Suburban Rail Loop that this would be a mechanism like it’s been used in other projects around the country. The Sydney Metro, for example,” she said.

In its January report, Infrastructure Australia said the Victorian government’s $34.5bn cost estimate was from 2020 and did not reflect changes over the past five years.

“Industry-wide cost escalation since 2020 presents further risk and uncertainty,” it read.

“Due to the uncertainty in the cost estimate, it is likely the economic case for SRL East and SRL North is overstated as any further increases to costs without extra benefits will reduce the benefit-cost ratio.”