The Federal Government has allocated $2.2 billion to the Victorian government in support of the Suburban Rail Loop, but much more is needed to complete the landmark project.

Victorian Premier Jacinta Allan emphasised that the allocated funds can only be spent on “very specific things” such as ground testing, utilities, and land acquisition.

Construction for the initial phase of the project, SRL East, is currently in progress between Cheltenham and Box Hill in Melbourne (see map below). This first stage of the project involves the creation of twin tunnels spanning 26km to link six new underground stations, with each station enabling the development of approximately 70,000 new homes in these areas by the 2050s.

The anticipated cost for SRL East ranges between $30 billion and $34.5 billion, with a projected completion target of 2035. To date, the Victorian government has pledged $11.8 billion towards the initiative and is seeking the Federal Government to contribute one-third of the overall cost.

This $2.2 billion injection represents the first direct investment by the federal government in the project, as the state government advocates for an additional $9 billion in funding. The remainder of the financing is anticipated to be sourced through 'value capture', a method of financing infrastructure by leveraging taxes, levies, or charges linked to the rise in land value.

Catherine King, the Federal Minister for Infrastructure, Transport, Regional Development, and Local Government, said in The Urban Developer “Infrastructure Australia and my department have now assessed that business case and recommended that money be released to the Victorian Government on the basis of very specific things that it will be going towards.”

Minister King clarified that the $2.2 billion commitment fulfils an election promise but future funding decisions would depend on Infrastructure Australia’s advice. “There are still some hurdles the Victorian Government will need to overcome –particularly the costings around value-capture – before the federal government can make another investment”, she stated.

Source: Infrastructure Magazine

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