Labor takes $2b scalpel to signature rail loop project

Victorian Premier Ben Carroll has trimmed a $2 billion chunk from the Suburban Rail Loop East, a costly rail project under scrutiny. The 90km orbital line, connecting Melbourne's southeast to the outer western suburbs via Tullamarine Airport, was projected to cost between $30 billion and $34.5 billion by 2035. However, Mr. Carroll aims to slash $2 billion in savings, including an immediate $1 billion reduction by eliminating unnecessary project elements.

The revised budget for SRL East now stands at $33.3 billion. Changes include scrapping an interchange at Box Hill and Glen Waverley, eliminating a second entrance at Clayton, and abandoning complex pedestrian bridges in Burwood and Cheltenham. A dedicated fund for community projects will be wound up, some future precinct works scaled back, and the Suburban Rail Loop Authority will be absorbed into the Victorian Infrastructure Delivery Authority.

Mr. Carroll promised an independent technical review to target an additional $1 billion in savings. Despite the $13 billion in construction contracts awarded, including $5.3 billion for tunnelling, no new contracts will be issued until the review concludes. Prime Minister Anthony Albanese's government allocated $3.8 billion for the project, bringing the total expected expenditure to $6 billion.

While the Victorian state debt is projected to reach $200 billion by 2030, the government pledged to fund a third of the project's cost, expecting the Commonwealth to match that. The remaining third is anticipated through value capture mechanisms, such as elevated land tax revenue. The coalition opposing Mr. Carroll's Labor party has vowed to pause and review the project if it secures the upcoming election.