Victorians would earn as little as 60 cents for every dollar spent on Melbourne’s proposed multi-billion dollar rail loop, according to independent analysis.
The Parliamentary State Budget Office calculated the cost-benefit ratio (BCR) for the first two sections of the Commuter Rail Loop (SRL) at between 0.6 and 0.7.
This means that for every dollar spent on the project, the state would collect between 60 and 70 cents.
The PBO report, released on Saturday, notes that a BCR greater than one indicates a net benefit to society and that governments may require a higher BCR to achieve their policy goals or to choose between potential projects.
The analysis was calculated at the request of the Victorian Opposition, which pledged to halt the construction of the first part of the loop and instead redirect cash savings to the healthcare system.
The 90-kilometre orbital rail line from Cheltenham to Werribee via Melbourne Airport was unveiled by Andrews’ Labor government as a major election policy in 2018 and originally valued at $50bn.
A 400-page trade and investment brief, released in August last year, showed the eastern and northeastern sections of the line could cost up to $50.5 billion.
However, the Parliamentary Budget Officer released a report this month that said building its first two stages could cost taxpayers $125 billion, more than double Labor’s previous estimates.
The business case indicated that the first two parts of the loop had an RAC between 1 and 1.7.
In its BCR analysis, the PBO used its estimate of future costs to build and operate SRL East and North, an economic assessment by KPMG prepared in February 2021 for the state government and discounted benefits and costs by 7% as assessed by Infrastructure Australia. frame.