The 'extraordinarily expensive' project reshaping a state — and drawing political battlelines

Victorian Premier Ben Carroll has announced $2 billion in cuts to the state's largest infrastructure project, the Suburban Rail Loop (SRL), saying: "I respect your money."

His comments underline the controversy over the 90km underground rapid transit project, which will link Melbourne's middle suburbs and allow passengers to travel across the city without passing through the CBD.

The state government says the mega-project will reshape Melbourne into a multi-nodal city, bringing services and jobs closer to where people live, building more homes, and creating more jobs.

But its enormous cost, disputed economic benefits and lengthy construction timeline have also made it one of Australia's most controversial infrastructure projects.

Liam Davies, a lecturer in sustainability and urban planning at RMIT University, said the SRL was a step towards transforming Melbourne's city-centric public transport system into an interconnected network.

"Melbourne's greatest challenge is that it has become an extraordinarily large city, physically," he told SBS News.

"We can't just adopt the transport strategy for a denser, more compact city like London. We need to do something of our own, and the SRL is an attempt to do that in a Melburnian context."

With Labor and the Coalition deeply divided on the SRL, the project's future could be decided when Victorians head to the polls in November.

Why is the project so controversial?

The SRL will connect Melbourne's middle suburbs from Cheltenham in the south-east to Werribee in the west via Melbourne Airport through a 90km underground rail line.

The project is split into three stages. The first section — SRL East — is under construction, running from Cheltenham to Box Hill via six new underground stations. The first trains are expected by 2035.

Critics argue the mega-project's business case doesn't stack up, and the multi-billion-dollar price tag is a financial liability for Victoria, which has the second-highest debt per capita of any state or territory, behind the Northern Territory.

More than $33 billion has already been invested in SRL East, according to the premier.

A Parliamentary Budget Office analysis puts the price tag for building the East and North sections at $96.4 billion, though there is currently no fully costed estimate for the entire project, which includes the final stage, SRL West.

An evaluation last year by Infrastructure Australia — an advisory body to the federal government — found the SRL's business case was insufficiently detailed and relied on future stages to justify its benefits.

It also urged the Victorian government to develop "exit strategies" should the project be unable to be completed.

Allegations of corruption and unlawful conduct in state-funded projects, which recently led to a royal commission into the construction industry being called, have also heightened public concerns about the SRL.

Davies said there are questions about which other infrastructure projects will miss out on investment because of the SRL.

"This is still an extraordinarily expensive project," he said.

"Is this the only project that we build over the next 35 to 50 years, or do we build other projects at the same time?

"If it's the only project that we build, I don't think it's the best allocation of resources."

Are there alternatives?

Carroll, who replaced Jacinta Allan as premier last month, has clearly recognised that many Victorians are unhappy with the eye-watering cost.

On Tuesday, he announced $2 billion in savings, with underground station interchanges at Box Hill and Glen Waverley no longer to be built, instead replaced by surface transfers.

Among other changes, a second station entrance will not be built at Clayton, and pedestrian bridges in Burwood and Cheltenham have also been axed.

"I respect your money," Carroll said in a statement.

"The SRL will be built on time. Today's changes mean it will be built under budget."

Davies said construction of SRL East was well advanced, with tunnel boring machines in place to begin excavating twin 26km tunnels.

"The reality is that that project is so far along; it will continue," he said.

But it's the project's latter stages which have scope for change.

Davies said better rail services and upgrades to the northern and western suburb lines, including electrification of the entire track, would fulfil many of the policy ambitions of SRL West at a fraction of the time and cost.

"We have an exploding population in our northern and western suburbs, and the infrastructure is not keeping up at all," he said.

He said there could also be alternatives to the SRL North, such as elevated rail, light rail, or a rapid bus transit system with dedicated bus lanes.

"There are challenges to each of those options; each of them has trade-offs," he said.

"All of them would be cheaper options than what we currently have, which is tens of billions of dollars in tunnelling."

Where do the parties stand?

The project's future could hinge on the outcome of the state's November election.

Labor has committed to seeing the SRL through, arguing it's essential infrastructure for a growing Melbourne.

The state Opposition has previously called for the project to be scrapped, arguing that it's too costly and the funds should be redirected to other, higher-priority transport projects, such as a long-sought-after airport line.

In 2024, Liberal MLC Evan Mulholland described the SRL as a "vanity project" that was "robbing the next generation of getting the infrastructure that they deserve".

But the Coalition's position has evolved over time, with Opposition leader Jess Wilson now promising to pause and review the project if elected.

Whatever the outcome, the project will remain a defining political issue for years to come.

"Transport projects are big and expensive, and they almost always have controversy," Davies said.

"It's almost impossible to build something that everyone is going to be absolutely happy with. Maybe this is just another example of that."

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