Premier admits Melbourne Airport Rail Link costs likely to blow out as $5bn in federal funding is reaffirmed

The Premier has conceded costs for a highly anticipated project are likely to blow out, while the delivery date will need to be “reset”.

Jacinta Allan has warned the cost of Melbourne’s Airport Rail Link could blow out even further after the project was delayed by an infrastructure funding review.

Federal government funding of $5bn of for the long-awaited rail link was reconsidered as part of a 90-day evaluation of high-risk infrastructure projects nationwide but was ultimately rubber-stamped this week.

Speaking to journalists later that morning, the Victorian Premier said she had first learnt of the decision through the media.

Jacinta Allan said delays to the project would cause ‘additional pressure in terms of cost’. Picture: 9 News

Both the state and federal governments have pledged $5bn to fund the rail that will connect the Tullamarine airport to the city’s highly anticipated Metro Tunnel and Suburban Rail Loop.

“Going back a few years now, the range attached to the airport rail project was between $8-13bn,” Ms Allan said.

“(It) was broadly agreed to and understood by the federal and state governments at the time that obviously any delay does add additional pressure in terms of cost.”

Ms Allan also called on Melbourne airport to come back to the negotiating table with a “much more co-operative frame” to try to keep further delays to a minimum.

“That will determine the answer to both time and cost,” she said.

The $5bn of federal funding was originally promised by the former Coalition government. Picture: NCA NewsWire / David Crosling

The Victorian government had initially sought to build a cheaper overground station, a suggestion that was rejected by the airport over concerns it could constrain future development.

Ms Allan said the airport’s conduct during negotiations concerning the rail project had been “incredibly frustrating” and “disappointing”.

“Frankly, some of the demands from the airport have really stretched the boundaries of what is an acceptable request of the state,” she said.

Ms Allan called on Melbourne airport to come back to the negotiating table with more ‘acceptable’ requests. Picture: NCA NewsWire / David Crosling

She said the airport had been uncooperative in negotiating the “technical requirements” of issues with the station, proposing solutions that would “cause significant additional cost and delay to the project”.

“There have been many different demands that have been put on the table by the airport on Monday,” Ms Allan said.

“As of today, let’s give them the opportunity to reset those negotiations.”

While the Airport Rail Link was spared from the chopping block, 12 other projects across the state were cancelled under the review, including the Frankston to Baxter rail extension and the Geelong East Rail.

It was recommended that 82 of the 274 projects assessed across the country be axed, but funding has been axed for 50 of them.

Melbourne Airport Rail has a targeted completion date of 2029.

Ms Allan warned on Thursday, however, that the delivery date would need to be “reset”.

Melbourne Airport has been contacted for comment.