Australia’s top infrastructure body has placed Melbourne’s Suburban Rail Loop (SRL) project on the highest priority list for the nation despite raising serious concerns about its business case merely a year ago. 

It is the first time the contentious project has been listed as a high priority project by Infrastructure Australia — among nearly two dozen other proposals across the country — which is thought to increase the chance of more federal funding.

After evaluating the project last year, Infrastructure Australia found the state government’s business case for the project was not detailed enough and relied on future stages of the rail loop to justify its benefits. 

At the time, it urged the government to develop “exit strategies” from the plan if it could not be delivered. 

But in a report released on Wednesday, Infrastructure Australia said the train link was now a national priority deserving of immediate investment.

A map showing a proposed rail loop for outer Melbourne suburbs

The plan for Melbourne’s multi-billion-dollar Suburban Rail Loop.  (Supplied: Infrastructure Victoria)

“The first stage of the Suburban Rail Loop (SRL) is identified as an immediate priority for delivery investment to support a rail connection between Cheltenham and Box Hill,” the report said. 

“This will reduce travel times, facilitate new housing and connect major employment, health, education and retail areas in Melbourne’s east and south-eastern suburbs.”

The report also flagged future stages of the SRL including the SRL North and West which incorporated the Melbourne Airport Rail Link, as a “future investment opportunity in the 5-10 year pipeline”. 

The SRL is Victorian Premier Jacinta Allan’s signature project and is the most expensive in the state’s history with a price tag of $34 billion for its first stage.

A mock up of a train on the Suburban Rail Loop

The government plans for trains to start running on the Suburban Rail Loop by 2035. (Supplied: Victoria’s Big Build)

Infrastructure Australia chief executive officer Adam Copp said further information had been provided that met the issues raised in the body’s earlier report.

“We have assessed and provided some feedback on [the SRL project],” he told ABC Radio Melbourne.

“But we do see the connections around Melbourne’s outer suburbs are a really important way to spread the population of Melbourne going forward and make sure people can move around more effectively.”

Mr Copp said the report provided an “investment blue print” that identified the highest priority proposals to address critical infrastructure gaps.

“The productivity of our economy and livability of our cities is all hinged on investing on the right infrastructure at the right time but unfortunately we can’t build everything everywhere all at once,” he said.

“We need to have a very clear blue print and priority list that allows tax payers to get the best bang for buck.”

Additional funding not yet announced

The state has said it would foot the bill for a third of the project, while another third would come from local taxes known as value capture.

The government has hoped the Commonwealth would contribute the remainder but to date it has only provided $2.2 billion. 

Even before getting all the funding needed, the state government has signed contracts worth $14.4 billion.

Federal Transport Minister Catherine King said the government would provide further funding for the project in the upcoming budget.

“As with all infrastructure projects, the federal government assesses joint funding proposals from state and territory governments through our usual budget processes,” she said.

“States are then responsible for the planning, design and delivery of these jointly funded projects.

“As announced by the prime minister in November, the [federal] government will be making further investment through the upcoming budget.”

Despite concerns from outside and within her government about the cost and the ongoing corruption allegations involving Victoria’s Big Build, Jacinta Allan has not budged on the project.

On Wednesday, Victorian minister for the SRL Harriet Shing said the project “is on time and on budget”.

“The estimate in the 2021 business case was between 31 and 34.5 billion dollars, and we are within that budget,” she said.

She said while Infrastructure Australia was not a decision-making body, the report “really does emphasise the value of the Suburban Rail Loop”.

“It identifies that the project itself is entirely consistent with the national strategy for growth, making sure that livability is at the heart of good decisions around infrastructure,” she said. 

The train platform at one of the stations on the Suburban Train Loop.

An artist’s impression of a future train platform at one of the SRL stations. (Supplied: Victorian Government)

The Victorian Opposition has vowed to review the project if elected in November. 

“We’re going to pause and review the project,” Liberal MP James Newbury said. 

“The federal agency may well have released the report, but the federal government hasn’t put the money on the table.

“You can’t build something unless you have the money to build it and the funding is not there for the project.” 

Seats along the proposed rail line are all held by Labor but loom as major battlegrounds in the upcoming election.Â