Full steam ahead: billions more locked in for rail line
Australian taxpayers will spend billions more to help fund Victoria’s mega Suburban Rail Loop project, just days after the federal government scrapped regional freight rail plans.
Finance Minister Jim Chalmers’ fifth fiscal plan will include an extra $3.8 billion for the massive infrastructure project, with preparation work starting in 2023.
Prime Minister Anthony Albanese said the Eastern Suburban Rail Loop, which connects train lines in Melbourne’s suburbs of Cheltenham, Glen Waverley, Box Hill and Clayton, would make the city’s economy more productive and improve connectivity.
The cash splash brings the Commonwealth’s spending on the project to $6 billion; That’s still $5.5 billion short of what the Victorian government is asking its federal counterpart for the rail line.
Despite Victoria’s budget approaching $200 billion in debt, the state government has committed to funding $11.5 billion of the rail project; the other third comes from “value capture,” such as increased land tax revenue.
Australian cities have historically relied on radial rail networks to transport passengers from outer suburbs to a central hub.
But Mr. Albanese said the world’s major cities, such as Paris, New York and London, also have orbital rail networks that allow people to get around the city without going into the middle of the city and then back out again.
“And that’s what this vision does,” the Prime Minister told reporters.
The tunnel construction for the project is planned to start at the end of 2026 and the new line will be put into service by 2035.
Two more phases are planned to be followed to extend the line along the north and west of the city.
But the rail cycle has been much maligned for the $34.5 billion price tag of the first phase.
Victorian Opposition Leader Jess Wilson has vowed to halt construction and review the project if she forms government in the November state election, despite the $7.7 billion that must be spent by mid-2027.
The Victorian government argues the spending is worthwhile because it will reshape the way people travel around Melbourne, create new hubs in the suburbs and create thousands of jobs.
Despite the criticism, the cost per kilometer is estimated to be similar to comparable projects under construction in Sydney, such as Parramatta and the CBD Metro.
Monash University public transport professor Graham Currie said there was no doubt the project would be expensive but it was a “long-term, visionary” project that would deliver huge benefits.
“Melbourne is predicted to be the size of London by 2050, and London has much better railways than Melbourne,” he told AAP.
“What are we going to do if we can’t run Melbourne in 20 to 30 years because there’s so much traffic everywhere?
“By then we may be wondering why we haven’t done more of these.”
Victorian Premier Jacinta Allan praised her federal counterparts, saying they were “a partner in Canberra meeting the needs of our growing state”.
“The Commuter Rail Loop will reduce travel times and eliminate congestion for busy families,” he said.
The federal government angered farmers and regional leaders this week when it announced that a major freight rail line intended to connect Melbourne and Brisbane would be cut short due to cost overruns.
Tuesday’s budget will include plans to cut the Inland Rail project and instead finish it at Parkes in central NSW after analysis showed costs rising from $16.4 billion to $45 billion.
The project was financed “off-budget” and was considered an investment that would generate returns for the government over time.
But Finance Minister Katy Gallagher said the government had been advised that the extra $29 billion needed to finish the project would provide an insufficient return to justify off-budget funding and would increase the underlying deficit.
He said canceling the project north of Parkes would reduce the federal debt by more than $4 billion over four years from 2028/29.
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