North East Link’s extra $3.25 billion gets Albanese’s thumbs up

Pouring an extra $3.25 billion worth of federal funds into Melbourne’s blown-out North East Link is a good use of taxpayer money, Prime Minister Anthony Albanese has insisted, despite the project’s cost doubling just a few months ago.

But the prime minister has remained tight-lipped about how the latest investment will affect the investment pipeline for Victoria’s other major infrastructure projects, including the Allan government’s controversial Suburban Rail Loop and the long-touted airport rail.

Prime Minister Anthony Albanese and Premier Jacinta Allan touring the North East Link site on Thursday.

Albanese visited the North East Link’s two huge tunnel-boring machines for Thursday’s announcement, which will bring the Commonwealth’s total contribution to $5 billion. The project, which will link major arterial roads, is expected to take 15,000 trucks off suburban streets and slash some travel times by half an hour.

However, the North East Link blew out by more than $10 billion in December, taking its total estimated cost to $26 billion. Asked why his government was tipping more money into the project, instead of putting it into settling the airport rail dispute, Albanese said it was because the North East Link was “here, it’s real and it’s now”.

“You can’t drive on a media release,” the prime minister said. “What you can do is drive on a road that’s properly funded. We believe this $5 billion is an appropriate contribution by the Commonwealth to what is a vital nation-building project.”

Premier Jacinta Allan’s first budget, handed down on Tuesday, confirmed that more than 100 transport, school and health projects were being pushed back to help the state’s bottom line. Airport rail is now delayed by at least four years amid a dispute between the state government and Melbourne Airport over whether the rail line should be above or below ground.

“The airport should get serious about actually getting things done,” Albanese said. “I’m familiar with airports. From time to time, they think they operate in a way that forgets their social licence.”

Albanese also batted away questions about whether his latest investment meant there was no money in next week’s federal budget for the Suburban Rail Loop.

The Commonwealth’s latest funds are for the non-tolled components of the North East Link, including the M80 Ring Road upgrades, North East Link connections and the Eastern Freeway upgrades.

The projects will create new lanes, implement smart technology and improve the connection to the North East Link tunnels, the state and federal governments said in a joint statement.

Earlier on Thursday, federal Infrastructure Minister Catherine King said the “missing link” would improve traffic flow across Melbourne.

“Obviously, it’s a toll road, we’re doing the non-toll components – bringing some of those links together,” she told ABC Radio Melbourne.

Albanese said the boost, which will be included in next week’s federal budget, would ensure the city’s fast-growing north-east had the infrastructure it needed.

The link will be built between the Eastern Freeway and the M80 Ring Road in Greensborough and is expected to open in 2028.

The North East Link – which includes 6½ kilometres of tunnels – will stretch from Bulleen to Greensborough. It will widen the Eastern Freeway by up to 20 lanes.

Allan revealed in December that the 10-kilometre toll road had more than doubled in cost since it was first announced.

The toll road was initially budgeted at $10 billion and reassessed in 2019 at $15 billion. But the government revealed last year that the updated cost estimate was $26 billion.

Interest repayments are expected to hit $8.8 billion a year by 2027, leaving taxpayers on the hook for $16,700 every minute in interest costs alone.

Allan, who oversaw the development of the North East Link as the responsible minister, blamed global economic circumstances, including the pandemic and the war in Ukraine, for the project’s surging cost.

Victoria is already the most indebted state in the nation. The state’s debt pile is projected to hit $156.2 billion next financial year, rising to $187.7 billion by June 2028.

Treasurer Tim Pallas said on Tuesday the state would tinker with its infrastructure program in response to increased construction costs and the rising price of materials, labour and transport.

With Kieran Rooney

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