Speaking from a suburban shopping mall turned construction site in Melbourne’s east, Jacinta Allan made clear where her priorities lie.
“Works are powering ahead here,” the premier told reporters in Box Hill, the site of one of six new stations in the government’s electorally popular yet contentious and expensive Suburban Rail Loop (SRL) project, on Monday.
“It’s exactly the project our growing city and state needs – particularly in the Suburban Rail Loop East corridor.”
It was a not-so-veiled dig at the operators of Melbourne airport, who late on Sunday night informed her via text message they would be dropping their opposition to an above-ground station at the airport.
The following morning – after the airport’s chief executive did the rounds on breakfast radio – Allan’s office received a letter confirming their position.
The letter, Guardian Australia understands, also made clear they hoped the project would be fast-tracked and completed by 2030 – in time for the opening of its third runway.
State government sources are quick to point out the airport’s plans for a third runway are still being considered by the federal government, and perhaps was the impetus for the operator’s “compromise”.
But the timing could not be worse for the premier.
In May 2023, the state government paused early works on the rail link to the airport, as their federal colleagues conducted a review of infrastructure funding, blind-siding some state MPs.
A year later – and despite being given the green light from their federal counterparts – the state’s budget did not provide any funding for the project.
The treasurer, Tim Pallas, said he expected the station would be delayed for at least four years, citing the impasse with the airport operators. (The state government wanted a cheaper station above ground while the airport insisted on constructing a costlier one underground.)
At the time, Pallas threatened to build a train station at Avalon airport, which is closer to Geelong, describing Melbourne airport as holding the taxpayer to “ransom”.
It got so messy between the two parties that a mediator was appointed by the federal government, who last month delivered a report recommending the station be built above ground.
But Allan on Monday said the airport had missed its chance to fast-track the project.
“The consequence of the unreasonable position that has been taken for a number of years now is that this project has been delayed by four years. That’s the simple fact,” she said.
She said when the federal and state governments had each committed $5bn to the project in 2019, they had set the “very aggressive timeline” for it to be completed in 10 years, and that could no longer be met.
Allan said Melbourne airport had also “added another unresolved issue into the mix” by stating it was seeking compensation from the federal government for land acquisition.
As the government paused the airport, it went full throttle into SRL East. Last year, it signed a contract worth $3.6bn for the construction of 16km twin tunnels between Cheltenham and Glen Waverley.
On Monday Allan announced a global consortium of tunnelling businesses had been named as the preferred bidder to construct two 10km tunnels between Glen Waverley and Box Hill.
She was tight-lipped on the cost of the contract while negotiations were under way but flagged three more contracts would also be signed – one next year to build a new fleet of trains, fit out the tunnels, install signalling and operate the network, followed by two more to build the six stations.
The overall cost of SRL is forecast to be between $30bn and $34.5bn, according to the government’s own business plan.
While it is hoping the federal government will stump up some more cash after committing $2.2bn at the 2022 election, it is nonetheless a huge impost at a time state debt is expected to reach $188bn within four years.
It also makes it incredibly hard for the government to stick to the pledge it made in 2018 to be the government that “finally” builds an airport rail link to Melbourne, some six decades after it was first proposed.
The opposition has vowed to pause or scrap SRL East while urging the government to get on with the airport station.
Some ministers and Labor MPs in the west, meanwhile, have also privately raised concerns.
They say SRL West, which would run from Melbourne airport to Werribee, should have been the first stage of the project, given both the popularity of an airport rail connection and the greater need for infrastructure in the region. This section remains uncosted and was not included in the SRL business case.
The transport infrastructure minister, Danny Pearson, however, has dismissed that beginning with SRL East was a political calculation.
“The Victorian people want a government with a vision and they want a government that is prepared to be focused not just on winning the next election but doing what is right,” he said.
Perhaps the same logic should be applied to Melbourne airport.
• This article was amended on 9 July 2024. The value of the contract to construct two 16km tunnels is $3.6bn, not $3.6m as previously stated.
