By Annika Smethurst and Kieran Rooney
Billions of dollars in federal funding Victoria wants for the Suburban Rail Loop has been held up for almost two years because the state government has refused to hand over crucial details to Infrastructure Australia to make sure the project stacks up.
The peak infrastructure body criticised the original business case it was given in August 2022 and a month later asked for detailed costs of each section of the rail loop, the “most likely” cost-benefit ratios for each stage, the overarching strategic plan for the project, and information about how the state expected to generate funding through value capture.
Premier Jacinta Allan has overseen the Suburban Rail Loop project since its inception.Credit: Luis Enrique Ascui
But newly uncovered emails show the state government has repeatedly ignored Infrastructure Australia’s attempts over two years to get those details. When The Age asked Premier Jacinta Allan’s government about it, her office did not explain why the information had not been provided.
The inability of Infrastructure Australia to get answers casts doubt on more than $11 billion the state government wants to help fund the $35 billion first stage of the rail project. The Albanese government has repeatedly said that funding is contingent on the project being assessed by infrastructure bureaucrats.
In September 2022, an Infrastructure Australia official charged with evaluating projects sought a meeting with the Suburban Rail Loop Authority (SRLA) and laid out a litany of missing information needed to progress further evaluation of the signature project.
After that meeting, they wrote to SRLA executive Sashi Balaraman in March 2023, seeking “an update on a potential submission”.
Eight months later, in November 2023, the official again emailed the SRLA asking for another update. The official also mentioned infrastructure officials had met Victorian Transport Infrastructure Minister Danny Pearson, who had inquired about the “engagement and working relationship” between the two agencies.
“It would be good to connect and, if possible, get an update from you on status and next steps, so that we have some current knowledge on your work,” the Infrastructure Australia official wrote.
Four months later, in March 2024, Infrastructure Australia emailed SRLA requesting another briefing and asked about the status of Victoria’s next submission.
The Age has confirmed Infrastructure Australia did not receive any further information since September 2022, preventing it from progressing to a full analysis.
“Infrastructure Australia is ready to assess the Suburban Rail Loop Authority’s next submission in line with our assessment framework once it is received,” a spokesperson said.
“We have previously provided guidance to the Suburban Rail Loop Authority on the requirements of our assessment framework, and the information we need to conduct our assessment.”
Despite this, the head of Victoria’s Transport Department, Paul Younis, assured a parliamentary committee in May that Infrastructure Australia had “all the information that they have asked for” – including a project business case.
“There is no further information that we are providing to Infrastructure Australia,” he said.
The Albanese government has promised $2.2 billion for SRL East, which will run from Cheltenham to Box Hill by 2035 at an estimated cost of $35 billion. Federal Infrastructure Minister Catherine King has said Victoria’s request for a further $11.5 billion would be contingent on an assessment from Infrastructure Australia.
RMIT emeritus planning and environment professor Michael Buxton said the state government had never properly evaluated the whole project as cost-effective.
“They didn’t consider any other [transport] options properly,” he said.
Buxton said the state government had provided no methodology about how they would fund a third of the project from value capture, while there was “no indication” yet the federal government would contribute another third.
Opposition transport infrastructure spokesman David Southwick accused the government of avoiding a proper independent assessment of the Suburban Rail Loop because the project “simply does not stack up”.
“The Suburban Rail Loop has a $20 billion funding shortfall, no businesses case, no expert backers and is starving funds from critically needed health, education, crime prevention and road maintenance projects across Victoria,” Southwick said.
“Now is not the time for the Suburban Rail Loop. As the cost-of-living crisis worsens, Labor must pause this project, get its priorities right and invest in the frontline services Victorians need and deserve.”
The emails – released to the state opposition under freedom of information laws – also shed new light on the feedback provided by Infrastructure Australia, after it first received the government’s business case for the SRL in August 2022.
Infrastructure Australia asked for a “Stage 2 submission” one month later, after it said a high-level review of the business case – which has repeatedly been cited by the state government as evidence the rail loop stacks up – did not contain enough information for an assessment.
Before the meeting with senior SRLA staff, Infrastructure Australia said it had noted eight different areas that needed more information to complete the work.
“The overarching strategic rationale for the SRL program focuses on SRL East and SRL North, with less information on SRL West, information on the entire program and the contribution of each of the three stages to the overall outcomes would be helpful,” Infrastructure Australia wrote.
As part of that request, the agency asked for the “actual cost numbers for each segment of the SRL” as well as “the cost breakdowns for the rail infrastructure and the stations/precincts”, indicating it was not included in the initial document.
Infrastructure Australia also sought access to spreadsheets used for any cost-benefit analysis for the whole project as well as “more detail on how metro rail was selected as the preferred mode”.
A more detailed assessment was needed for the use of value capture taxes and charges, which are expected to raise a third of the SRL East’s $35 billion cost, given “there are few local examples of this funding approach for large-scale projects”.
In May, Suburban Rail Loop Authority chief executive Frankie Carroll confirmed the government had been given options for new taxes on businesses to raise the $11 billion required in the business case.
On Friday evening, a Victorian government spokesperson said: “The SRL Business and Investment Case was rigorously peer reviewed and demonstrates significant social and economic benefits to our growing state.”
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