V/Line chief executive James Pinder was immediately stood down after Transport Minister Ben Carroll was made aware of the Independent Broad-based Anti-corruption probe on Aug. 19.
Pinder was appointed to the top job of the government-owned corporation in late 2016.
Nick Foa, the head of Transport Services at the Department of Transport, will serve as acting CEO while a long-term arrangement is sought.
Premier Daniel Andrews would not comment on the probe, saying it wasn’t appropriate for the government to be briefed on IBAC investigations.
“I make no judgments about it,” he told reporters on Aug. 20.
“All I can do is refer you to whatever language Minister Carroll has used.
“He will have been as frank as he can be without interfering with the work that IBAC has done.”
The state government says V/Line services will continue to operate as scheduled.
It comes five months on from the Victorian auditor-general highlighting V/Line’s failures in delivering the Murray Basin rail project.
The MBRP was announced in 2014 as a once‐in‐a‐generation upgrade for much of the state’s regional rail freight network and was expected to be completed by 2018.
The report, tabled to parliament in mid-March, found the scheme had not met “scope, time, cost or quality outcomes” despite its $440 million budget.
V/Line and the Department of Transport had used $381.5 million (or 86.7 percent) of the original budget and only rolled out about half of the project, the auditor-general found.
Among the “sub-optimal” management failures identified were disputes and delays arising from V/Line not keeping to its contract obligations.
At the time, Pinder said V/Line accepted the findings and would continue to improve contract and project management in line with recommendations.
Prior the report’s release, the ABC reported a project insider had submitted a statement to IBAC making a series of allegations against McConnell Dowell and Martinus Rail—the joint venture behind the project’s construction—including overcharging the government for completed works.
Transport Infrastructure Minister Jacinta Allan said she was unaware of the probe at the time, but conceded she was “disappointed” with V/Line.
Rail Projects Victoria would be responsible for finishing the project in conjunction with the transport department, Ms Allan said.
It’s not the first time V/Line have come to IBAC’s attention
In 2017, the watchdog found the state’s regional rail operator had conflicts of interests in its procurement and recruitment practices between 2013 and 2016.
Deputy opposition leader Peter Walsh said the investigation distracted from the need to fix the “mess” Labor had made of country Victoria’s public transport network.
By Callum Godde