They’ve gone and done it.
Against the pleas of all and sundry, the Victorian government has signed its first major contract pertaining to former Premier Daniel Andrews’ $200 billion Suburban Rail Loop (SRL) boondoggle.
In doing so, the government has locked taxpayers into the most expensive infrastructure project in history that risks bankrupting the state.
The first contract, worth $3.6 billion, will tunnel the first 16km of the 26km SRL East, and will connect Cheltenham to Box Hill.
A separate contract for tunnelling between Glen Waverley and Box Hill will be signed next year, followed by another to build SRL trains and a signaling system, as well as manage and maintain the SRL East network, the following year.
Premier Jacinta Allan announced the project was “full steam ahead” following the contract signing.
“We are full steam ahead with the Suburban Rail Loop – by 2026, tunnel boring machines will be in the ground and Victorians will be hard at work delivering a project that will slash travel times and transform our transport system”, she said.
Allan claimed there is “no alternative” to building the SRL given Melbourne’s population is projected to swell to 9 million people mid-century, similar to the size of London today, courtesy of the federal government’s mass immigration policy.
Premier Allan is lying through her teeth, of course.
The SRL is a gigantic white elephant that has failed all credible analysis and is opposed by every infrastructure expert, along with the state’s Auditor-General and the Parliamentary Budget Office.
The net benefits of the SRL are estimated to be only 60-70 cents for every dollar spent, according to the Parliamentary Budget Office, or 51 cents according to the Victorian Auditor-General.
The $200 billion sunk into the SRL will syphon huge sums of money from Victorians while also crowding-out critical infrastructure and services across the state.
Indeed, former secretary of Victoria’s Department of Economic Development, Jobs, Transport and Resources, Richard Bolt, told the Victorian Ombudsman Deborah Glass that he was excluded from the early stages of the SRL’s development.
Bolt cautioned that the project would waste public funds given that an “improved bus service” would deliver similar benefits at far lower cost.
“The extraordinary secrecy applied to this project was not only a breach of convention and public trust, it also comes at a high cost to public value, and specifically the best, optimal use of state finances”, Bolt said.
“A project of this scale and complexity necessarily competes with many other claims on public funds – in all portfolios, not only transport”.
“That the opportunity costs of the SRL were not able to be tested by … [the Department of Treasury and Finance] creates a high risk that better uses of funds have been crowded out”.
Victoria already has the highest state debt in the nation and the lowest credit rating:
Victoria has the nation’s largest state debt (Source: Alex Joiner).
Ratings agency Moody’s has projected that Victoria’s debt would balloon by 85% in five years, from $122 billion in 2022 to $226 billion by 2026.
The Victorian Auditor-General also warned that Victoria’s debt could soar to $256 billion by June 2027, and questioned why there was no plan in place to manage the burden.
In turn, Victoria’s already lowly credit rating risks further downgrades.
The enormous funds wasted on the SRL will ensure that Victorians will be saddled with crippling levels of debt for generations to come.
And for what? To meet the nefarious infrastructure aspirations of former Premier Dan Andrews and the mass immigration fetish of the federal government?
