Canberra put $3.8b more into Melbourne's rail loop on evidence the public still cannot see

On 8 May 2026 the Australian Government committed a further $3.8 billion to Suburban Rail Loop East, the 26 kilometre twin tunnel line with six underground stations from Cheltenham to Box Hill. The Prime Minister's media release that day put the Commonwealth's total at $6 billion and said tunnelling would begin by the end of 2026, with completion in 2035. The Victorian Government's cost estimate for that first stage is $34.5 billion.

The money went in against the standing advice of the Commonwealth's own adviser. Infrastructure Australia's business case evaluation report for SRL East, dated 31 January 2025, recommended that before committing further funding the Australian Government should receive and approve three things from Victoria: an updated and detailed cost estimate for the line and its station precincts, a funding and financing strategy with quantitative analysis showing how value capture would raise one third of the cost, and cost benefit analysis demonstrating the project's social, economic and environmental outcomes. None of those documents has been published. The evaluation recorded a funding gap of $9.3 billion and said that crucial project delivery details related to actual costs and funding were not provided, reducing confidence that the project can be delivered as planned.

On the economics the report was blunter still. Victoria's 2021 business and investment case reported a benefit cost ratio of 1.1 to 1.7, calculated at a 4 per cent discount rate and covering SRL East and SRL North together. Infrastructure Australia's guidelines require a 7 per cent rate, which the report says the proponent did not provide. It found wider economic benefits made up 18 per cent of total benefits and had been folded into the core analysis rather than reported separately, contrary to both Victorian and Commonwealth guidance; that option and non use values accounted for about 5 per cent and residual value about 9 per cent; and that construction emissions, worth $150 million to $450 million when priced at national carbon values, were not monetised at all. Its conclusion: the economic outcomes in the business case are overstated, and correcting them while adopting a contemporary cost estimate "would question if the benefits of SRL East exceed the costs".

This is the second such finding. The Victorian Auditor General's report on the quality of major transport infrastructure project business cases, tabled on 21 September 2022, recalculated the loop's benefit cost ratio using the state Treasury's own guidance, at 7 per cent and excluding wider economic benefits, and got 0.51. The same office notes the Victorian Parliamentary Budget Office's 2022 estimate that the full 90 kilometre program will cost $125 billion. The Australian National Audit Office, in Report No. 3 of 2024 to 2025, published on 18 September 2024, found that departmental advice had focused on securing the original $2.2 billion election commitment, and that as at June 2024 SRL East had still not been through the formal project approval process because the department was waiting on a project proposal report from Victoria. It made no recommendations.

Something did change in between. On 18 December 2025 the Victorian Government detailed how it would raise the $11.5 billion it wants from value capture over 40 years: $5.75 billion from existing land tax inside the precincts, $2.9 billion from new developer contributions, $1.6 billion from state led development, $800 million from a car park levy after 2035, and $450 million from the windfall gains tax. The Property Council said the levies would push prices up for homebuyers, citing charges above $33,000 per dwelling by 2032. Then on 11 March 2026 Infrastructure Australia's priority list marked SRL East as investment ready and recommended that the Australian Government "should consider prioritising this proposal for additional delivery investment", with chief executive Adam Copp telling the ABC that updated information had addressed earlier concerns. The same listing still records only two evaluations, on 24 June 2022 and 31 January 2025, and links to only one evaluation report, the critical one.

What a settled evidence base looks like is visible elsewhere in that document. Infrastructure Australia cites 17.8 million additional ticketed public transport trips between August 2024 and July 2025 after Sydney Metro City opened, and 3,200 fewer vehicles crossing the Harbour Bridge southbound each day, alongside an ACT report finding 18 per cent fewer vehicles at some intersections and 6,100 dwellings built along the light rail corridor. Those are counts taken after the fact.

Unresolved: no benefit cost ratio for SRL East alone, at any discount rate, has been published; nor has an updated cost estimate; nor the quantitative value capture analysis. The Victorian Auditor General's office, as at 17 August 2026, lists an audit of SRL East precinct planning and delivery as planned rather than tabled. Contracts for three of five major works packages are already awarded.