Victorian Premier Ben Carroll has reversed course on the Suburban Rail Loop, committing to proceed with the first stage of the project while announcing scope changes designed to reduce its total cost by approximately 6%.
On Tuesday, Carroll will unveil modifications to SRL East—a 26-kilometre underground section linking Cheltenham and Box Hill—that are projected to save $1 billion. He will simultaneously direct an independent technical review to identify an additional $1 billion in savings across the project.
The premier's announcement marks a significant shift from his comments on Monday, when he suggested other infrastructure priorities might take precedence over the orbital rail line.
The SRL will be built on time. Today's changes mean it will be built under budget,Carroll said.
The combined effect of both measures will reduce SRL East's maximum cost from $34.5 billion to approximately $32.3 billion, representing a 6% reduction from the 2021 business and investment case. No additional contracts will be awarded until the technical review concludes, though the government has confirmed that all current works will proceed, with tunnelling between Burwood and Glen Waverley expected to commence soon.
Carroll's reversal follows his elevation to the Labor leadership four weeks ago, succeeding Jacinta Allan and Daniel Andrews, both of whom championed the orbital train line. Daniel Andrews has backed Carroll to win Victoria's November election, while praising his approach to the project.
What prompted the change in direction?
In his first week as premier, Carroll stated he would not terminate the project's existing contracts. However, on Monday's radio appearances, he signalled a more cautious stance.
The Suburban Rail Loop, an orbital line, makes sense, but it cannot be crowding out everything else we need to do as a government. Airport Rail, Melton electrification, filling potholes and doing the job properly – these are the things Victorians want from their leader and their government,he told 3AW.
On ABC Radio, he elaborated:
There is a contract in place and that work will go ahead. But I am also having a very good look at how we fix up potholes, get on with Airport Rail, get on with Melton electrification.
His cabinet reshuffle has also signalled a shift in project governance. Carroll's cabinet reshuffle removed the standalone Suburban Rail Loop portfolio, reflecting a broader reorganisation of how the project is managed.
What scope changes have been announced?
The modifications to SRL East include eliminating underground station interchanges at Box Hill and Glen Waverley, scrapping a second station entrance at Clayton, and removing what the government described as complex pedestrian bridges in Burwood and Cheltenham. A replacement car park, originally designed to restore approximately 400 parking spaces lost during construction of the new station, will also be discontinued.
The SRL Community Projects Fund, which provided grants between $10,000 and $80,000 to local community groups during construction, will cease after the current funding round concludes. Additionally, some future precinct works intended to support local areas will be scaled back.
What is the funding situation?
Victoria has allocated $11.8 billion to SRL East, while the Commonwealth has contributed $6 billion. According to the ABC, the federal government's additional contribution of $3.8 billion lifted total Commonwealth funding to $6 billion. Approximately $14.5 billion worth of contracts have already been signed, with industry reporting indicating that about $13 billion in construction contracts had been finalised, with a further two contract packages still to be finalised in 2026 and 2027.
The Suburban Rail Loop Authority, the statutory body overseeing the project's planning and delivery, will be integrated into the Victorian Infrastructure Delivery Authority. This consolidation was already in progress before Carroll assumed the premiership.
What happens next?
Tunnelling operations at Burwood are expected to commence by August or September, with two tunnel boring machines set to advance toward Glen Waverley. The Australian Rail Association has urged Victoria's new transport minister to keep SRL and Melbourne Airport Rail moving, signalling industry support for project continuity.
The government is also preparing for an expression-of-interest process for an all-women tunnelling crew as SRL East early works accelerate. Service on the 26-kilometre underground section is expected in 2035.
State Opposition Leader Jess Wilson has indicated that if the Coalition wins the November election, she will pause and review the project, creating a political test for Carroll ahead of the poll.
Key Facts
- SRL East scope changes are projected to save $1 billion, with an independent technical review seeking an additional $1 billion in savings
- The combined measures will reduce the project's maximum cost from $34.5 billion to approximately $32.3 billion
- Tunnelling between Burwood and Glen Waverley is expected to begin by August or September 2026
- Victoria has committed $11.8 billion to SRL East, with Commonwealth funding totalling $6 billion
- The Coalition has pledged to pause and review the project if elected in November
