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Victoria seeks more federal cash for state infrastructure blitz

The Andrews government has spent weeks lobbying Canberra for billions of dollars in extra funding to help pay for its promised $80 billion of infrastructure projects.

The federal government has already pledged $5 billion to the Melbourne Airport Rail Link and $2 billion for a fast rail line to Geelong, with Treasurer Josh Frydenberg expected to make further infrastructure commitments for his home state when he hands down his third budget on Tuesday.

The Victorian government has been lobbying Treasurer Josh Frydenberg for billions of dollars in funding. Credit:Alex Ellinghausen

State Transport Infrastructure Minister Jacinta Allan on Monday confirmed she expected the Commonwealth to contribute to the $50 billion Suburban Rail Loop and said she would speak to her federal colleagues once the business case was completed in coming months.

Over the next 11 years, the Andrews government will build five tunnels in Melbourne, including some of the state’s most expensive road and rail projects – the 90-kilometre Suburban Rail Loop to connect suburbs around Melbourne without the need to travel into the CBD, the $16 billion North East Link and the $13.7 billion Metro Tunnel.

The Metro Tunnel, which is due for completion is 2025, is under way and primarily being funded by the state government. In 2016 Victoria rejected the Commonwealth’s offer of $600 million to add a rebuilt South Yarra station to the project. Ms Allan at the time said the extension “did not stack up financially” and no further funding has been offered by the federal government.

In the lead-up to the 2014 state election, then-opposition leader Daniel Andrews promised the Metro Tunnel would be built with one-third of funding provided by the state, one-third from the private sector and one-third from the Commonwealth.

One federal government cabinet minister told The Age the Andrews government had pushed the Commonwealth for cash for the Metro Tunnel in the lead-up to Tuesday’s budget.

The rail tunnel, which will connect South Kensington to South Yarra through five underground stations, was initially costed at $11 billion, but has blown out by $2.7 billion.

In October the state government reached a deal with the consortium building the Metro Tunnel project, Cross Yarra Partnership, which agreed to pay an extra $1.37 billion on the project. The remaining $1.37 billion will be picked up by Victorian taxpayers and is expected to be included in the state budget when it’s handed down later this month.

Ms Allan on Monday said she welcomed “every dollar that’s invested in transport infrastructure” projects by the Commonwealth.

“We have been talking to them about the delivery of road projects across the state, noting that we are already in partnership with the Commonwealth on a whole range of suburban and regional road projects,” she said.

Ms Allan said the business and investment case for the Suburban Rail Loop would be completed within months, and she would be speaking to Canberra for federal funding. However, key questions remain about the merits of the rail line, announced in the lead-up to the 2018 election. The Andrews government did not provide the final cost or the business case, despite settling on the route.

“As part of the rollout of this project, yes, we will be having conversations with the Commonwealth government,” Ms Allan said.

“We have said that we would look for a funding share from the Commonwealth government, and when we release the investment and business case in the coming months I plan on having extensive discussions and conversations with the Commonwealth government because this is a vitally important project – not just for now and supporting construction jobs now, but for the way Melbourne will grow into the future.”

Transport Infrastructure Minister Jacinta Allan wants the Commonwealth to pitch in for the Suburban Rail Loop.Credit:Joe Armao

Tuesday’s federal budget will include almost $1 billion in additional road funding, including an extra $20 million for upgrades to freight connections to the Port of Portland, as well as $500 million to tackle congestion at two pinch points on the Monash Freeway.

The federal government has also announced a $2 billion cash injection for a new freight terminal to remove thousands of trucks from Melbourne’s clogged roads.

The money is contingent on a matching contribution by the Andrews government, with potential sites identified at Truganina in the city’s west and Beveridge in the north to accommodate future Inland Rail services of double-stacked, 1800-metre trains.

Ms Allan argued the intermodal terminal must be in the western suburbs, at the centre of freight activity.

”For some time now, we’ve already been identifying the best location for an intermodal freight terminal, and we’ll be doing that work and sharing that information with the Commonwealth government,” she said.

“We’re pretty clear that in the view of what’s best for Victoria, what’s best for the freight industry, for the creation of jobs, to get trucks off local roads – the location of that terminal in the west is where it should be. That’s the work that we’ve done to date, and we’ll need to have further conversation with the Commonwealth about not just the funding that they have announced but when it might be available.”

Roma Britnell, the shadow minister for ports and freight, also backed the freight terminal being built in the city’s west and called on the state government to match the Commonwealth’s contribution when Victorian Treasurer Tim Pallas hands down the state budget.

“Making a funding contribution in next week’s budget will show that Labor is more than just talk when it comes to rail freight, because their track record in the area is less than impressive so far,” she said.

There will be no money in the budget for car parks at Boronia, Camberwell, Croydon, Glenferrie, Heatherdale, Mitcham, Surrey Hills, Narre Warren, Seaford, Kananook, Bentleigh, Balaclava, Elsternwick, Brighton Beach, Hampton, Sandringham and North Brighton, despite it being a 2019 federal election commitment.

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Tune in on Tuesday from 6.30pm for our live coverage of the 2021 federal budget.

Latika Bourke will wrap up the latest news, analysis and reaction in our live blog. Watch the Treasurer’s speech live just after 7.30pm.

Our expert team, including Shane Wright, David Crowe, Peter Hartcher, Ross Gittins, Rob Harris and Jessica Irvine, will explain what the budget means for you, the economy and business.

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