Costs review puts brakes on Melbourne airport rail link

·3-min read

Melbourne's long-awaited airport rail link has stalled, with new contracts unable to be signed until after a national review.

Victoria and other states have been told they cannot ink contracts for projects in the federal government's $120 billion infrastructure pipeline review without expressed permission.

It means those the state government is close to awarding contracts for, including the multibillion dollar Melbourne Airport Rail project, will be stuck in limbo until after the 90-day review period.

But works on airport rail and other joint state and federal projects caught up in the review will continue until the end of their current contracts, which vary from case to case.

Construction workers may be temporarily redeployed to other government projects while the review is under way, with Premier Daniel Andrews guaranteeing no one would lose their jobs.

"We apologise if that's inconvenient in any way but that work has to be done," he said.

Mr Andrews suggested the move by the federal government to freeze the signing of contracts during the 90-day review was perfectly logical.

Treasurer Tim Pallas said his federal Labor colleagues were entitled to satisfy themselves of the merits of projects signed off on by the former Morrison government, including airport rail.

"We believe that Melbourne Airport Rail is a good project and we'll continue to advocate for it," he said.

The project connecting the city to Tullamarine was originally due to be completed by 2029, with new stations and a sky rail bridge.

The Victorian and federal governments had previously each committed to contributing $5b towards the project, which is expected to cost between $8b and $13b.

The national infrastructure review will be led by former department secretary Mike Mrdak, Infrastructure Australia acting board member Clare Gardiner-Barnes and former senior West Australian transport bureaucrat Reece Waldock.

Federal election commitments and projects under major construction are exempt from the review, including Victorian Labor's signature Suburban Rail Loop.

The 26km first stage of the rail loop from Cheltenham to Box Hill is in early works but Prime Minister Anthony Albanese pledged $2.2b to it if Labor won last year's poll, making it a federal election promise.

The Andrews government previously promised to begin construction on airport rail in its second term if re-elected in 2018 and then rebranded the project as SRL Airport when the state coalition threatened to shelve the loop if it won office last year.  

Opposition transport infrastructure spokesman Davis Southwick accused the state government of walking away from one of its key campaign promises to Melbourne's growth corridors.

"Airport rail is basic infrastructure in almost every major city around Australia and the world - yet in Victoria, we just can't seem to get it done," he said.

"There can be no more excuses."

A Melbourne Airport spokesman said it was awaiting further clarity from the government on the timing and delivery of the project.

"Melbourne Airport remains a strong supporter of a rail link to the city," he said.