Trams have missed the bus for 2025 connection to Fishermans Bend

The University of Melbourne has given up its push for a tramline to its new Fishermans Bend campus to be built before the end of this decade, in a setback that may also stymie housing development in the nation’s largest urban renewal project.

The construction of the tramline – and eventually an underground rail line – was a key factor in the university’s decision to buy a 7.2-hectare site from the state government in 2019.

A concept of Melbourne University’s new engineering and design campus at Fishermans Bend.Credit: Melbourne University

But the mooted tramline and bridge that would have connected the CBD to Fishermans Bend by 2025 – outlined in a state government plan from 2018 – is nowhere to be seen.

Correspondence with the state government – obtained by The Sunday Age through a freedom-of-information request – shows the university has abandoned the tramline as a “short-term priority”, instead pinning its hopes on new express bus services.

The tram is now a “medium-term priority”, the documents show, needed in 10 years in line with a second stage of the campus from 2031.

The Labor government’s plan is to have 80,000 people living and 80,000 people working in Fishermans Bend – a former industrial area twice the size of Melbourne’s CBD next to the Port of Melbourne – by 2050, but residential and commercial investment has been slow to take off.

The property industry now says projects may not go ahead until developers are sure the tram or underground train lines to the narrow peninsula will be built.

“Without the proposed tramline… developers are having a hard time making their projects stack up,” said Cath Evans, Victorian executive director of the Property Council of Australia.

The fresh uncertainty about the tramline comes as documents show the state government is expecting to charge up to $34,635 per dwelling to fund infrastructure and flood mitigation in the precinct. Developers will also be given the chance to build up higher if they agree to create more public space.

The University of Melbourne is set to break ground this year on the $400 million first stage of its new engineering and design campus at the old General Motors Holden factory.

The university and the state government hope design and test facilities such as high-pressure wind tunnels will attract industry research partnerships and turn the area into an advanced manufacturing and innovation precinct. The facilities are due to open gradually from 2026.

A letter from the university’s chief operating officer, Paul Axup, shows the university is still seeking answers about when the government will deliver a rail connection.

“Strong future transport links to Fishermans Bend was a key factor in the university’s decision to choose this location for a new campus,” he wrote in the June 2023 letter to the Department of Transport and Planning. “When fully developed, the Fishermans Bend campus is expected to be used by around 12,000 people, likely more.”

Axup said the university’s purchase of the site was predicated on the state government building a tramline – and eventually the Melbourne Metro 2 underground rail line.

“Services linking Fishermans Bend to the north either through, under or around the CBD will be vitally important” so students and staff could travel there from the university’s Parkville and Southbank campuses, Axup said.

“We are looking towards construction commencement early in 2024 and so this level of planning certainty is now time-critical for us to keep on schedule.”

The Fishermans Bend redevelopment project was launched in 2012 by the Coalition under then-planning minister Matthew Guy.

The Fishermans Bend Framework, released by the Andrews government in October 2018, said it would build a tramline along Turner Street through the northern residential and employment districts by 2025. The line would connect to Collins Street in Docklands via a new bridge across the Yarra.

The University of Melbourne has been a strong advocate for the tram, but the documents reveal it has abandoned it as a “short-term priority” needed within the next five years.

The Melbourne Metro 2 – a proposed underground train line from Clifton Hill to Newport, with a stop at Fishermans Bend – will be needed in 15 years for the precinct to be a success, it says.

In the short term, the university is lobbying for new express bus services – including an extension of the 401 bus route, which links its Parkville campus to North Melbourne station – to Fishermans Bend and improved cycling and pedestrian routes.

A university spokesman said the first stage of the campus did not depend on tram or train lines. But “significantly improved transport links” would be required as it increases the number of students, staff and industry partners there.

“This is part of our ongoing discussions with the Victorian government to ensure the precinct’s success,” the spokesman said.

The Property Council’s Cath Evans said the ongoing delays to the tramline were holding back Fishermans Bend’s “enormous potential” as a site for affordable and well-located housing because developments were unfeasible without it.

“Providing certainty to private capital that the proposed tramline will be constructed in the near future will make the thousands of dwellings that currently exist on paper a reality,” Evans said.

Infrastructure Victoria, the state government’s independent adviser, has called for the Fishermans Bend tramline to be built by 2026.

A state government spokesman said it had increased bus services to Fishermans Bend over the past two years and was “continuing planning work for longer-term transport links, including the feasibility of high-capacity transport options to ensure we can meet the precinct’s needs for decades to come”.

The state government wants 80,000 people to live and work in Fishermans Bend by 2050. Credit: Joe Armao

The university’s letter to the department also raised its concerns about a government proposal for a “very much reduced” area of open space adjacent to the university on Turner Street, which it said would be too small to support major events it intended to hold at the campus.

The university was also pushing back against government plans to close Turner Street and turn it into a pedestrian plaza, because it would block commercial vehicles from accessing the campus.

Separate documents obtained by The Sunday Age reveal the scale of infrastructure contributions the government will use to fund transport projects, open space, flood mitigation and other local infrastructure.

The draft proposal for its Developer Contributions Plan proposes a single levy in which private companies will be billed a maximum of $34,635 per home, and $286 per square metre of non-residential floor space.

Of this, two-thirds will go towards essential infrastructure while more than $9000 will be put towards open space, flood preparation and drainage.

“It is critical that development contributions are not so high that development viability is affected,” the proposal document says.

“If this occurs, development will be slowed or not proceed, the government’s growth targets for the precinct will not be achieved, and this will result in reduced funds to contribute to infrastructure costs. The charge rates have therefore been set to balance the need to maximise revenue from development contributions to fund infrastructure and maintain development viability and momentum.”

The state government has also proposed an “open space uplift” under which developers would get incentives to provide land for use as public open space.

In return, they will receive a density bonus that allows them to build more homes, including the potential for higher apartment towers.

Across different parts of the precinct, developers could be permitted to build between 90 and 320 more dwellings for every hectare of public space provided.

Funding for the proposed tram route infrastructure will not be covered by development contributions, but these payments will be used for the land where the route may be built.

The decision on whether building the light rail will stack up commercially will come amid a difficult construction environment.

Rising materials and labour costs have pushed up the price of the project and Victoria’s debt position continues to worsen.

The North East Link blew out by $10 billion last year, with the state citing price increases for concrete, steel and asphalt as high as 19 per cent since 2020.

Victoria’s net debt is forecast to $177.8 billion by 2027, a $6.4 billion increase on the forecast in the May budget.

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