Victoria's Suburban Rail Loop Minister digs in on state's $34 billion funding plan for six new train stations

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a day ago

The minister for Victoria's Suburban Rail Loop is adamant it will be delivered within its $34 billion budget, but has refused to discuss back-up plans or exit strategies should Canberra reject a $9 billion funding request.
In an interview with Stateline, Minister for the Suburban Rail Loop Harriet Shing said work was continuing daily with the Commonwealth for stage one of the rail loop known as SRL East — six train stations between Cheltenham and Box Hill.
The Victorian government is contributing a third of funding of stage 1 directly, while planning to raise another third from value capture — a levy on local development around each station — and is relying on the remainder to come from the Commonwealth.
The Albanese government has already provided $2.2 billion for early works as part of a 2022 election commitment.
Earlier this year, advisory body Infrastructure Australia said it had low confidence in the state's ability to build SRL East within the $30-$34.5 billion budget and requested Victoria provide more detailed analysis of its plans, including an updated cost estimate and exit strategies from the project.
It said without assessing these updated results the Commonwealth should not consider paying the remaining $9 billion the Victorian government is asking for.
"We're continuing to deliver the information that the federal infrastructure department needs and to engage with Commonwealth ministers and of course the prime minister," Ms Shing said.
She said Infrastructure Australia recommended paying $2.2 billion for the SRL East project but then counselled the Commonwealth to ask for further detail, which Victorian departments were providing.
"This is a conversation for a project of enormous size and scale and complexity and of course the federal government is doing its due diligence — as it should," Ms Shing said.
She dismissed the need for an updated cost estimate for SRL East, saying construction was already underway according to costings made in 2021.
"The contracts that we've entered into at the moment are on track. They are within those ranges," Ms Shing said.
The SRL minister remained adamant in response to repeated questions about whether the Victorian government had a back-up funding plan if the Commonwealth decided not to stump up more cash.
She emphasised the principle behind the project, saying that failing to build infrastructure for future generations would exacerbate existing problems.
"It's irresponsible to describe the problems of a city that is growing at this rate — we'll be the size of London by the 2050s — and not to have any long-term plan to address those challenges of congestion and unfettered growth around the outside suburbs," she said.
Ms Shing would not be drawn on exit strategies for the project if funding methods — via the Commonwealth or value capture — fail.
"The only people who are talking about cancelling this project are the state opposition," she said.
Ms Shing said she was confident the government would be able to raise $11.8 billion it needs via value capture (approximately one third of the cost) to fund SRL East.
She said the funding method had been used in other parts of Australia to finance large scale projects such as the Sydney Harbour Bridge.
Ms Shing explained value capture would involve the government extracting a portion of the profits that come from housing developments built in a 600 metre radius around each of the six new train stations.
"So across the SRL precincts ... there will be 70,000 new homes delivered and we will see an enormous investment in employment precincts and jobs."
How the government would extract wealth out of developments around the new SRL train stations, without creating a disincentive for developers is yet to be detailed.
"Planning reform is another really important part of this work."
Ms Shing said details on value capture plans would be revealed in coming months.
Ms Shing said the SRL project was not just about rail but a broader vision to build for Melbourne's growing population.
Doing nothing would push growth further into the city's north and west, she said.
"These are areas that know only too well what a lack of access to infrastructure means for them and for their quality of life and opportunity," Ms Shing said.
The minister declined, or was unable, to say how many people would use the SRL East train route when it opens in 2035, though she did say 460,000 people would use the SRL line once fully completed, which is decades away.
She said the number of SRL East train users would be "as many as the timetable will allow".
"The objective is to get to 'turn up and go' services, which then means across those twin tunnels we'll be able to have people accessing that to the greatest density possible using signalling that allows us to have high capacity trains — so, for more passengers — across a timetable that meets that demand," Ms Shing said.
"When that timetable is developed we'll be able to see how many people will be using it."