Victorian govt to spend $9.3b on rail loop

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Victoria will spend $9.3 billion on the first section of its suburban rail loop, with construction to start next year.

Premier Daniel Andrews and Transport Infrastructure Minister Jacinta Allan on Thursday announced the funds for the eastern stretch of the project, which runs for 26 kilometres underground between Cheltenham and Box Hill.

The contract for the first phase of works, to begin in 2022, has been awarded to global construction and engineering firm Laing O'Rourke.

The work will involve preparing sites for the launch of tunnel boring machines, moving and protecting underground services, ground improvement, geotechnical investigations and roads modification

About 14 per cent of the total hours of work will be undertaken by apprentices, trainees or cadets, with opportunities also available for women, Aboriginal and disadvantaged Victorians on the project.

Construction is expected to be completed by 2035, with the journey from Cheltenham to Box Hill touted to take 22 minutes - or three to four minutes between six stations.

Mr Andrews said the total cost of the project's first stage would be between $30 billion and $35 billion.

"This costs a lot, but it costs so much more if you don't build it," he said.

Mr Andrews said the service would carry about 70,000 passengers each day and would connect people to jobs, health services, schools and universities once considered too hard to reach.

"This is about getting people to the services they need, the jobs they want and making sure that we've got the most efficient road and public transport network that we can possibly have," he told reporters in Box Hill.

Mr Andrews said despite the COVID-19 pandemic, Victoria was on track to become Australia's biggest city in the next 10 years.

"I will not have a situation where people look back on our government in decades to come and say, 'If only they had gone and built something like this','' he said.

The government has already committed $2.2 billion for initial works. Mr Andrews urged the federal government and private sector to pitch in but maintained it was possible for the state to fund alone.

The 90-kilometre train line was announced ahead of the 2018 state election and at the time was estimated to cost $50 billion.

The government's business case does not detail plans for the western section of the loop, between Melbourne Airport and Werribee, or costings for the northern section, between Box Hill and Melbourne Airport. The latter part is expected to be built by 2056.

Shadow treasurer David Davis said too many aspects of the project remained unknown.

"The state has huge debt already and more debt, nearly $10 billion, is being added through this process," he said.

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