Despite critical evaluations from Infrastructure Australia and a lack of governmental support in Canberra, Victorian Premier Jacinta Allan is poised to sign two additional significant contracts for the Suburban Rail Loop (SRL) ahead of the upcoming state election. These contracts will likely compel any opposition, notably if Brad Battin prevails, to continue with the ambitious project, potentially incurring a multi-billion-dollar payout if cancelled.
Allan’s administration has already executed two major contracts for the Suburban Rail Loop East valued at approximately $5.8 billion. However, publicly accessible, albeit heavily redacted contract versions indicate that taxpayers will shoulder the financial burden of any cancellation, with liabilities escalating based on the extent of work conducted.
When asked about the potential costs of cancelling these contracts, Labor’s Mary-Anne Thomas refrained from providing estimates, asserting that the government does not intend to terminate the agreements. She urged that the focus should be on the opposition leaders, suggesting that their stance could jeopardise thousands of jobs linked to the initiative.
The opposition, at both state and federal levels, holds a critical view of the SRL project. Battin has urged immediate abandonment of the project, yet he has been reticent to commit to cancellation if elected. He expressed concerns over the reliability of redacted contract details when making decisions.
Independent assessments of the SRL East have shown a lack of confidence in its cost estimations, currently pegged at $34.5 billion, and have raised doubts about the projected benefits. Additionally, there have been calls for the federal government to approve previously promised funds to support tangible elements of the project.
Victoria’s strategy to finance the entire $34.5 billion endeavour relies heavily on obtaining $12 billion from the federal government and securing an equivalent amount through value capture, a poorly defined funding mechanism. As the current federal election campaign unfolds, there has been no clear indication of increased federal financial support, raising questions about the viability of the project should the state attempt to fund it independently.
There are concerns that the government’s commitment to this project may come at the expense of addressing critical state issues, such as police staffing shortages, declining education standards, and increasing hospital wait times. Battin has challenged the Allan government to clarify which essential services might suffer to finance this ambitious infrastructure plan, which he views as a misguided priority in the current economic climate.