Victorian treasurer threatens to consider train station for Avalon amid dispute with Melbourne Airport

Planes parked on the runway at Avalon Airport during the pandemic. Victorian treasurer Tim Pallas has referred to its proximity to an existing train line while criticising Melbourne Airport’s operators over negotiations for proposed a rail link. Photograph: Michael Dodge/EPA

The battle over a rail line to Melbourne’s airport has escalated, with Victoria’s treasurer, Tim Pallas, threatening to consider building a train station at Avalon Airport if the four-year stoush continues.

Pallas told reporters on Wednesday he was “no longer playing games” with the operators of Melbourne Airport, after delaying the long-awaited project by at least four years in the state budget.

He said despite the state and federal governments each committing $5bn to the rail line in 2020, they had been unable to reach an agreement with the airport’s private operators, who insisted on constructing a costlier underground station and compensation.

“I’m getting increasingly concerned about whether or not as a state, we shouldn’t be putting an each way bet around Avalon [Airport] and starting to think about what they can do in terms of provisioning for our transport needs going forward,” the treasurer said.

Asked whether this would include the construction of a train line to Avalon, which is closer to Geelong’s city centre than to Melbourne’s, Pallas replied: “Well there already is one going straight past”.

“Either they [Melbourne Airport] sort out this problem and they make it a priority … or the government is going to have to look at better provisioning for airport passenger transport than what is available from Melbourne Airport,” he said.

“Because at the moment it’s all road transport and it’s car parks.”

Avalon Airport’s chief executive, Adrian Harvey, told 10 News: “Bring it on, we’ll build it tomorrow”.

A mediator was recently appointed by the federal government to resolve the dispute but Pallas said it was up to Melbourne Airport to make concessions – as well as to build a third runway it first announced in 2019.

“I’m not seeing the taxpayer actually held ransom by a concessionaire that basically wants to embellish the value of their asset at the taxpayers’ expense,” Pallas said.

“They want it gold-plated, they want it underground – not even sure we have engineering advice that says we can do that – and they also effectively want us to compensate them for the disruption … of building what is a massive asset.”

The director of RMIT’s centre for urban research, Jago Dodson, said Pallas’s comments were “more of a provocation than a substantive policy proposal.”

“Avalon Airport is about 40 minutes further away by rail from the CBD than Melbourne Airport and in terms of its location, it’s very, very far away from the south-eastern suburbs,” Dodson.

“Its viability is probably marginal.”

A spokesperson for Melbourne Airport said it was awaiting commonwealth approval for its third runway and remained supportive of a “future- proof” rail line.

“We remain available to meet with the treasurer should he wish,” they said.

But Dodson said he understood the treasurer’s “frustration”. He urged further intervention from the federal government, which oversees the nation’s airports.

“We’re talking about the largest airport in Australia’s largest city – we’re not talking about an aerodrome in some remote location,” he said.

“It’s a neglect of responsibility to simply offer mediation rather than intervening more decisively to progress a major piece of nationally significant infrastructure.”

The federal infrastructure minister, Catherine King, said she would continue to work with the state on the project.

“But the reality is that until an agreement is reached with Melbourne Airport on where the station will be located, the project cannot commence,” she said.