The Federal Government is set to put more money into Melbourne’s biggest rail project as the Victorian Government seeks to plug uncertainty gaps in respect of the project’s funding.

But the amount of additional contribution will not be revealed until next year’s budget.

During a joint press conference with Victorian Premier Jacinta Allen on Sunday, Prime Minister Anthony Albanese announced that the Commonwealth Government would commit more money to go to Victoria’s Suburban Rail Loop in next year’s budget.

“I can confirm today that there will be additional funding in our Budget in May for Suburban Rail Loop so that we can partner with Victoria,” Albanese said.

But he refused to reveal how much would be committed.

Instead, he told reporters that this would be revealed when the budget is handed down.

Nor would he be drawn on whether any state/Commonwealth funding split had been agreed to.

Asked about this, Albanese merely stated that, ‘We can confirm that there’ll be additional money in the Budget in May of 2026’.

Set to transform Melbourne’s rail system over coming decades, the proposed Suburban Rail Loop is a 90-kilometer orbital loop that will link Melbourne’s middle suburbs from Cheltenham in the southeast to Werribee in the west.

The project also includes a new link between the CBD and Melbourne Airport.

Construction on the first section is underway.

Known as SRL East, this will connect Cheltenham in the southeast to Box Hill in the east.

Early work commenced in 2022. Tunneling will begin next year.

Initial and early works are also underway in respect of the airport rail link.

However, SRL East has been subject to controversy.

In a damning assessment issued last year, Infrastructure Australia raised concerns about the project’s business case that was released in 2021.

In particular, Infrastructure Australia found that the project’s future economic benefits had been overstated whilst its $30.0 billion to $34.5 billion cost estimate was outdated and lacked detail.

It recommended that the Commonwealth and Victorian Government prepare an exit strategy. This would outline a process for transitioning out of the project if it is not able to be delivered at this stage or in the future.

In addition, uncertainty remains about how the $34.5 billion project will be funded.

Under the Victorian’s Government’s preferred arrangement, both Victoria and the Commonwealth would each contribute one third of the project’s costs ($11.5 billion each).

The remaining $11.5 billion would be raised through ‘value capture’ mechanisms. This may include means such as selling development rights above new SRL stations.

As things stand, however, only $14 billion has been committed.

This includes $11.8 billion from the Victorian Government as well as $2.2 billion from the Commonwealth.

The Commonwealth money was committed earlier this year prior to the Federal Election in May and related to early works.

Whilst the additional funding amount remains uncertain, the announcement goes some way to providing certainty about the Commonwealth component of the project’s funding.

The new funding is likely to be substantial as it will relate to the project’s major construction phase.

Metro tunnel set to open

News of the commitment came as the Victorian Government announced that the $15.5 billion Metro Tunnel would open one year early on November 30.

Upon its opening, the tunnel will complete an end-to-end rail link from Sunbury in Melbourne’s west to Cranbourne in the southeast.

It involves two twin 9km rail tunnels under the CBD which connect the lines along with five new underground stations and Adren, Parkville, State Library, Town Hall and Anzac.

Commenced in 2018, construction was originally expected to last for eight years before completion in 2026.

Whilst the project is being delivered early, however, it is also over budget.

Originally expected to cost $10.9 billion, the tunnel is now expected to cost more than $15.5 billion.

Taking out additional funding that is being contributed by the project’s major contractor, the final cost to the state will be $13.48 billion.

Enjoying Sourceable articles? Subscribe for Free and receive daily updates of all articles which are published on our site

Want to grow your sales, reach more new clients and expand your client base across Australia’s design and construction sector?

Advertise on Sourceable and have your business seen by the thousands of architects, engineers, builders/construction contractors, subcontractors/trade contractors, property developers and building industry suppliers who read our stories across the civil, commercial and residential construction sector