The Australian Government is set to pump more money into Melbourne’s biggest railway project.

As part of the 2026/27 Commonwealth Budget, the Federal Government says that it will an additional $3.8 billion to the Victorian Government’s $34.5 billion Suburban Rail Loop East project (SRL East).

Set to open by 2035, the project will link Cheltenham in the southeast with Box Hill in the east via two 26km tunnels and six stations.

It is the first section of the broader suburban rail loop project – a 90km orbital rail line that will link Melbourne’s middle suburbs from Cheltenham in the southeast to Werribee in the southwest.

The new money will come on top of $2.2 billion which the Commonwealth previously contributed to the project in the2022/23 budget for land acquisition, utility upgrades and early works.

It will take the overall Commonwealth contribution for the project to $6 billion.

The latest announcement goes some way to resolving uncertainty regarding how the $34.5 billion project will be funded.

Under its preferred funding arrangement, the Victorian Government hopes that the project will be funded one third each by the Victorian Government, the Commonwealth Government and through value capture mechanisms.

Already, the Victorian Government has committed $11.5 billion for the project. The Victorian Government has also released details about how it expects to raise a further $11.5 billion through value capture.

Prior to the latest allocation, however, the state had secured only $2.2 billion of the $11.5 billion in Commonwealth funding which it hopes to secure for the project.

The latest announcement goes some way to ensuring that the project will receive at least a significant part of the Commonwealth funding which it hoped to receive.

The project is being delivered by the Suburban Rail Loop Authority.

The 16 km southern section of the tunnels (from Cheltenham to Glen Waverley is being constructed by the Suburban Connect consortium. This consists of CPB Contractors, Ghella, and Acciona.

The remaining 10km northern tunnel section will be built by a joint venture led by Webuild that will also include GS E&C and Bouygues.

Tunnelling for the project will commence by the end of this year, with tunnel boring machines currently being assembled on site.

All up, the project will support 3,000 jobs through construction and will create up to 8,000 local jobs in the long term.

It will also support the delivery of 70,000 new homes in precincts surrounding SRL stations.

Still concerns remain about the project’s financial viability and cost.

A project business case that was published in 2021 was highly criticised by Infrastructure Australia on the basis of unverified assumptions surrounding both the project’s costs and its expected benefits.

In a statement, Prime Minister Anthony Albanese welcomed the funding announcement.

“This project is a game changer for the city of Melbourne and the state of Victoria,” he says.

“Ensuring Victorians can get into Greater Melbourne and across suburbs, rather than having to go into the CBD then back out, helps speed up travel times, get cars off the road and increases opportunities for businesses in Melbourne’s east.”

 

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