The Melbourne Airport Rail link project proposed by the federal and Victorian governments is currently under fire, with a lack of passenger demand indicating that the $8 billion to $13 billion price tag may not be worth the benefits.
Infrastructure Australia (IA), the independent statutory body responsible for advising the government on decisions relating to infrastructure, has unveiled newfound criticism of the project, suggesting that it be delayed until passenger demand can justify the cost.
“The strategic need for Melbourne Airport Rail is strong, and there will be long-term benefits,” said IA in an assessment released on Monday.
“However … we recommend further work is undertaken to improve certainty of the cost estimates, cost escalation risk, and outcomes of stakeholder engagement, particularly with Melbourne Airport.”
The Andrews government, which has rejected the suggestion to delay the project and has begun work, previously released a business case that stated that the project would result in a positive economic return of $1.80 to every dollar invested.
The advisory body, however, believes that those numbers are “potentially significantly overstated”, suggesting that it may instead return only a third of government estimates.
The reason for IA’s poor expectations is a forecast of low demand. It believes that many commuters travelling to Melbourne airport will still opt to use the Tullamarine freeway, rather than the proposed rial link, which would run from Tullamarine to Sunshine.
The freeway is expected to reach capacity in 2036, meaning passenger numbers on the rail line in the first decade are expected to be low, making it a poor investment for now.
It instead advises that it be delayed until this date and that the government could implement measures to encourage users to take the new rail link rather than commute by car.
“Taking the proposal forward, the proponent should consider measures that could prompt the behavioural change required to shift road users to Melbourne Airport Rail earlier, thereby capturing upside potential to maximise benefits and improve the economic case.
“This could include competitive rail fares, road user/ congestion charges and media campaigns. Upgrades to on-road priority for airport bus services would maximise the capacity, efficiency, and reliability of the existing public transport connection until Melbourne Airport Rail is delivered.
“The economic benefits of Melbourne Airport Rail do not outweigh its economic costs at this time.”
The rail link project is a significant play for the Andrews government ahead of the state election on November 26. The total infrastructure planning for the government sits at $184 billion, with the rail link being one of the most significant projects.
“Others have talked about a rail line to Melbourne Airport for decades – the Andrews Labor government will get on and deliver it,” said a state government spokesperson.