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Private sector players are mulling whether to make a bid to help build the Melbourne Airport rail link as key questions remain over the funding and delivery of the project from Sunshine to Tullamarine.
The Carroll government maintains it is not currently considering any public-private partnerships for the long-awaited project. Since becoming premier, Ben Carroll has said that the rail line to the airport is his top infrastructure priority, while he has also promised to work more closely with business.
This has prompted conversations among investors and builders about putting together an offer to the government to deliver some part of the project with an injection of private capital – six years after the government shut down a market-led proposal that would have resulted in $7 billion injected on top of taxpayer funds.
Upgrades to the rail network from the city to Sunshine are already in the process of being built or tendered, but 18 months of meetings between federal government, state government and airport representatives are still yet to land a model to deliver the rail line past Sunshine to two new stations at Keilor East and Tullamarine.
This masthead has spoken to five construction, engineering and investment industry sources, who confirmed there had been fresh discussions in the private sector about putting forward a proposal for the project.
This has included seeking out old technical details and costs contained in a 2018 market-led proposal, known as AirRail, from a consortium backed by industry super funds to build the project with a six-kilometre tunnel between the city and Sunshine.
The group put up to $7 billion on the table, on top of the $10 billion committed by the federal and state governments at the time, but the offer was ultimately declined in 2020.
IFM Investors, the major financier in that bid and a key shareholder in Melbourne Airport, declined to answer questions from this masthead about whether they were considering a bid as part of their ongoing work exploring investment opportunities.
If they or another bidder does make an offer, they will confront a construction market that has changed significantly since the Andrews government rejected the market-led proposal in 2020.
A revived private sector plan would need new costings, accounting for significant construction price rises this decade, and to assess how public transport patronage has changed since the pandemic.
Multiple sources, who were not authorised to speak publicly, suggested the AirRail proposal to build a new set of tracks between Sunshine and the CBD was off the table because upgrades to this part of the network were already under way.
A station in Keilor East, which was added to the project after advocacy from Carroll as the local MP, would also be non-negotiable.
Carroll’s enthusiasm for the project has sparked a belief in the private sector that his government will seek to announce a major development before the election, but three industry sources warned questions over funding and delivery would challenge this timeline.
One issue that has ignited interest from the private sector is that authorities are yet to agree on the best method to contract and deliver the new passenger rail corridor from Sunshine to Tullamarine.
