Calls for Probe Into $2.2 Billion Federal Funding on Major Rail Project

Former Premier of Victoria Daniel Andrews (Left) with Victorian Premier Jacinta Allan (right), who was previously Minister for Transport Infrastructure and Minister for Suburban Rail Loop, inspecting the Metro Tunnel on Nov. 6, 2020 in Melbourne, Australia. (Asanka Ratnayake/Getty Images)

Shadow Infrastructure Minister Bridget McKenzie is calling on the auditor general to investigate a $2.2 billion (US$1.5 billion) contribution from the federal government to a major Victoria’s rail project.

The Albanese government promised the funding prior to the election and committed the dollars in the first budget of this term.

The rail project, dubbed the “biggest transformation of public transport in Australian history” will provide a 90-kilometre (56-mile) rail line that links every major train service in Melbourne

However, Ms. McKenzie is concerned about the federal government signing a “blank cheque” for a project that doesn’t stack up.

“I’ve written to the Auditor General because I’m very concerned about the risk that this project puts on Commonwealth taxpayers and Commonwealth governments going forward,” Ms. McKenzie told Sky News. 

“At the moment, federal Labor is just signing a blank check for Jacinta Allan and the Labor Party down here on a project that on any available public data doesn’t stack up.

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“I’ve been very concerned since the election that the government has refused to put this project through a due diligence process on behalf of Commonwealth taxpayers.”

The federal government confirmed the multi-billion dollar funding for the rail project in the October 2022-2023 federal budget.

In March, Victorian Premier Jacinta Allan, speaking in her capacity as Transport Minister at the time, described the federal government’s contribution as the largest to any project in the nation.

“What we have right now is a partnership with the federal government on the delivery of the Suburban Rail Loop for $2.2 billion that was committed in last year’s federal election and then committed against in the budget,” she said.

“That was the biggest allocation the federal government made to any state project in the nation. And that means we are underway with early works.”

Concerns About Cost

The project has faced calls to be scrapped from the think tank Grattan Institute and economists who are concerned about the cost.

A state parliamentary budget office report released in 2022 predicted that the cost of the Suburban Rail Loop may blow out to greater than $2 billion (US$137 billion).

In December, the Victorian government awarded $3.6 billion for tunnelling as part of the eastern section of the project.

The tunnelling machines will be powered by renewable energy, reduction emissions from construction to 20 percent below industry standard.

The project is set to create 8,000 direct jobs and provide six new underground stations between Cheltenham and Box Hill, reducing travel times.

Then then-Minister for Transport Infrastructure and Minister for Suburban Rail Loop Jacinta Allan (L) and former Premier of Victoria Daniel Andrews (C) with workers pose for a photo underground from the site of the currently being built as part of the Metro Tunnel metropolitan rail infrastructure project in Melbourne, Australia, on Nov. 6, 2020. (Asanka Ratnayake/Getty Images)

Ms. Allan said the rail project will “reshape our city” and is “full steam ahead.”

“By 2026, tunnel boring machines will be in the ground and Victorians will be hard at work delivering a project that will slash travel times and transform our transport system.”