The former Grattan Institute Transport and Cities Program director, Marion Terrill, has lambasted the Victorian government for pursuing the “ruinously expensive” Suburban Loop Project (SRL), which risks burying taxpayers in debt.
Terrill notes that nearly all of Victoria’s big ticket infrastructure projects have experienced massive cost overruns, which is likely to be repeated with the SRL.
“We’ve had a cost overrun of $2.5 billion on the metro tunnel, of $4 billion on the West Gate Tunnel, and of $16 billion on the North East Link, so it would be good to know if there’s a cost overrun so far on suburban rail route, and if so, how much”, she said.
The Victorian state budget said that it expected the federal government to cover one-third of SRL East’s cost, with another third coming from extra state revenue raising — referred to as “value capture”.
Source: Victorian Budget 2023-24
However, there is great uncertainty as to whether the federal government sill stump up the requested funding. The timeframe of SRL East’s construction also appears to be delayed, and Marion Terrill has demanded the government come clean.
“The government should be transparent about what is going on”, she said.
“If you’re a listed company, you’re required by law to report promptly to the market any change in your expected financial outcomes”.
“This is just like that, it’s an investment that the taxpayers of Victoria are making, and so we also should know promptly if there’s any change in the costs, any change in the timing, any change in the expected benefits that we’ll get from this project when it comes to fruition”.
“This project is ruinously expensive, and we still don’t have a viable way to pay for it”, she said.
Terrill has also called for the project to be cancelled, despite the hefty price tag involved in doing so.
“Even though we have spent some money this is not like a project that’s nearly finished”, she said.
“There’s an awful lot more billions of dollars to come down the pipe through to the 2050s or 2060s”.
“In many ways, we are in a bit of a hole and when you’re in a hole, the best advice is to stop digging”.
Victoria’s debt is already the worst in the nation with the state also having the lowest credit rating.
The SRL risks plunging Victoria deeper into debt, further credit rating downgrades, and escalating interest payments.
Victorian Premier Jacinta Allan should never have ignored expert advice and signed the contracts to build the first state of the SRL.
In doing so, she will consign Victorians to a future of debt servitude.
