Point of no return: New deal for Suburban Rail Loop makes it too expensive to cancel

2 hours ago 1

Chengdu: Mounting costs associated with the Suburban Rail Loop are fast taking the project to a point of no return, after the Victorian government ordered delivery of four more tunnel boring machines from China.

Premier Jacinta Allan will visit a construction site outside the panda capital of Chengdu on Friday to announce the new order, which doubles the number of machines being assembled and freighted to Melbourne to help build Victoria’s largest, and largely unfunded, infrastructure project.

Jacinta Allan said Victoria should aspire to have a public transport system like China’s while signing the deal.

The additional machines, which are scheduled to arrive next year and be in the ground before the November 2026 state election, will bore twin tunnels between Glen Waverley and Box Hill. Two each will dig in opposite directions from the Burwood launch site.

The $130 million cost of the machines are included in a $1.6 billion tunnelling contract awarded to the Suburban Connect consortium in 2024.

Another four tunnel boring machines already on order and due to arrive in Melbourne by the end of this year will start work from the Clarinda launch site and dig north towards Burwood and south to Cheltenham.

Once the machines are assembled and delivered, the new commitment will add to the estimated $5 billion of taxpayer money already sunk into SRL East, the first stage of a long-term project that, if eventually completed, will circle beneath Greater Melbourne, from Cheltenham to Werribee, at an unknown cost.

Four tunnel boring machines will be shipped to Melbourne to help Suburban Rail Loop construction.

The Victorian government has pledged to provide one-third of the estimated $34.5 billion cost of SRL East and make up a third through investment capture methods not yet specified. The federal government has contributed $2.2 billion but says it won’t tip in any more money until the Allan government satisfies concerns raised by Infrastructure Australia about the financial viability of the project.

The tunnelling contracts for SRL East have already been let, but under their terms the government is required to only make payments as costs are progressively incurred by the construction and engineering consortia.

Victorian Opposition Leader Brad Battin, having previously vowed to cease construction on the SRL if elected to government, has softened his position to say the project will be “paused and reviewed”. If all eight machines are delivered and put to work as planned, the first stage of the project will have cost too much to not complete by the time Victorians go to the polls.

The tunnel boring machines will be assembled by the China Railway Engineering Equipment Group in Zhengzhou. Allan made the announcement after inspecting the same model machines being used to build the Chengdu-Deyang Intercity Railway.

“Chinese companies are investing in the SRL and Victorian workers are building it,” Allan said. “Why shouldn’t we aspire to a public transport system like China’s?”

On Thursday, Allan defended the tone of engagement with Chinese government officials during her first trip to the People’s Republic as premier.

She agreed she had not raised any thorny political issues in her meetings with Chinese government officials, and said that as a state leader with no say over foreign policy, it was not her place to do so.

The tensions inherent in Australia’s relationship with China, a global power that is both our largest trading partner and greatest strategic threat identified by our current defence policy, was underscored by an editorial published by a state-controlled newspaper on the day of Allan’s arrival into China.

The China Daily, a mouthpiece for the Chinese Communist Party, welcomed the announcement of a $50 million two-year plan by the Australian government to improve access for Australian exporters to Chinese markets and the “pragmatic approach” taken by Prime Minister Anthony Albanese towards trade.

The same editorial lambasted last month’s joint military exercises by Australia, the US and the Philippines in the South China Sea and accused Australia of being two-faced in its dealings with China.

“Such behaviour exposes Australia’s implicit calculations to butter both sides of its bread,” it declared.

Allan said she had not read the editorial during her travels through Beijing, Nanjing and Shanghai, where she has emphasised the history of Victoria’s relationship with China and the need to improve cultural understanding through education exchanges and shared language.

This is a key theme of her newly released China strategy, which aims to attract more Chinese students to Victorian schools and universities and double the current number of Chinese tourists visiting Melbourne and Victoria by 2029.

She insisted that her approach towards China was in step with Canberra’s, which under Albanese and Foreign Minister Penny Wong has developed a China mantra of “co-operate where we can, disagree where we must”.

“We have a consistent approach,” Allan said. “It’s about respecting the relationship and supporting the friendship, strengthening the partnership because we know there is such a great benefit from bringing more jobs and greater understanding of culture back to Victoria and Australia.

“But I will reiterate that I will respect that it is the federal government’s mandate to deal with matters of foreign affairs. It would not be appropriate for me to cut into that space.”

When asked whether it was a mistake for her predecessor Daniel Andrews to blur this line in 2017 when he unilaterally endorsed President Xi Jinping’s Belt and Road infrastructure policy employed by China to increase its influence over the Pacific region, Allan said that matter was “well in the past”.

Allan will complete her China trip in Chengdu before returning to Melbourne on Saturday.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.