Airport rail study was doctored to ensure Sunshine ‘won’ shortlist of routes, commission told

Financial estimates were doctored and a senior public servant threatened with the sack to ensure the proposed Melbourne Airport Rail Link ran through Sunshine instead of a more direct route to the city, the Big Build royal commission has been told.

The allegations challenge the integrity of the business case for Premier Ben Carroll’s priority project, call into question a $12 billion joint funding commitment by the state and federal governments, and plunge the Big Build into fresh scandal a month before the state election.

A confidential submission to the royal commission by a planning expert who advised on the airport rail link reveals that a secret working group was established in late 2017 or early 2018 at the direction of then-public transport minister Jacinta Allan to allegedly bake in the case for the Sunshine route.

It says the small group, which included public servants within the Transport Department and outside consultants, was told to not discuss its work with any of their colleagues, including direct reports, or diarise their meetings. All instructions were given verbally.

The group’s brief, according to the submission, was to study four shortlisted routes for the Melbourne Airport Rail Link (MARL) and build evidence supporting the state government’s politically favoured outcome – that the new train line, if ever built, would have to go through Sunshine.

“The task was to produce a document, or set of documents, prior to the 2018 election so that after that election there would be no further consideration of any alternative routes for the MARL other than through Sunshine,” the submission reads.

Allan denies the allegations and is expected to be called as a witness before the commission.

The submission is one of four to the royal commission raising concerns about the integrity of the current MARL project. All were provided to this masthead by their respective authors.

The most serious allegation raised by the planning expert is that, to make an iron-clad case for Sunshine, the estimated cost of a more direct route through Maribyrnong was intentionally inflated by exaggerating the amount of tunnelling required.

The Maribyrnong route would have run beneath Highpoint shopping centre and opened up disused defence land for residential development.

An earlier 2012 study, commissioned by the then Liberal state government, top-scored Maribyrnong, known at the time as the “direct tunnel” option, out of 22 possible routes, with Sunshine ranked a close second.

The allegation that costings were deliberately inflated to rule Maribyrnong out of contention is contained in a separate, contemporaneous file note made by a solicitor when the planning expert first sought legal advice about blowing the whistle.

The note, dated August 23, 2018, and seen by The Age, reads:

“Untenable. Serious matters ignored, not acted upon.

“4 options – one particular route better but more expensive (doctored to make it unviable).”

The solicitor who wrote the file note confirmed its authenticity.

The planning expert, who spoke to this masthead on the condition of anonymity, decided against making a disclosure to the Victorian Ombudsman or IBAC due to fears of personal and professional recriminations. They subsequently quit the department, leaving the information buried for eight years.

“This is fraud on a billion-dollar scale,” they said.

The planning expert, working with trusted former colleagues experienced in rail engineering and major project costing, has calculated that an unnecessary 3.5 kilometres of tunnelling was included along the proposed Maribyrnong route to add between $3.8 billion and $4.6 billion to the estimated cost.

A price tag of $20 billion to $25 billion for Maribyrnong – double the estimated $8 billion to $13 billion cost of the Sunshine route – was included in a strategic appraisal of the airport rail link published by Transport for Victoria in July 2018 and built into the 2021 business case for the project.

A truer, average cost estimate of the Maribyrnong route, according to detailed calculations provided to this masthead by the group of experts, is $16.5 billion in 2018 dollars.

Maribyrnong was the federal government’s preferred route when then-prime minister Malcolm Turnbull came to Melbourne in April 2018 to announce $5 billion in funding towards the project.

Then-premier Daniel Andrews, who did not appear at the funding announcement alongside Turnbull, was blindsided by the move. At the time, he was more focused on his government’s plans to unveil the Suburban Rail Loop, a project being developed in secret, as a vote-grabbing election promise.

The Victorian government formally endorsed the Sunshine route for the airport rail link in August 2018 and the federal government followed suit three months later. The comparative cost of the Maribyrnong route was a critical factor in tipping the scales towards Sunshine in the published assessment.

According to the Transport for Victoria analysis, Maribyrnong was the top-scoring route for the benefits it would bring to travellers using the line, Victorian businesses and the economic development of Melbourne’s inner north-west. Due to its prohibitive cost, it was ranked last for deliverability.

When the planning expert saw the assessment, he challenged an executive working in the department. “I just said to him, “How could you produce documents like this, and think this is OK?” the planning expert told this masthead.

“He said to me, ‘The minister said to me that either these documents say Sunshine or I’ll sack you. So they say Sunshine.’”

Allan, who is retiring from politics after losing the Labor leadership to Carroll in July this year, was the minister for public transport and major projects at the time the assessment was done.

“The allegations made are incorrect,” a spokesman for the former premier said.

“Ms Allan will co-operate with the important work of the royal commission. She will answer whatever questions the royal commission has for her about these allegations, but it is not appropriate to pre-empt the royal commission’s work.”

A colleague of Allan, who was unauthorised to publicly discuss the matter, said the former premier was furious at the suggestion she would coerce public servants to support a particular outcome.

Allan made no secret during her time as a minister responsible for what became known as the Big Build that she wanted the MARL to run through Sunshine.

The benefits of Sunshine, which Allan advocated within government and to her federal counterparts, was that it required no tunnelling, would accelerate Sunshine’s development as a second central business district, and would link the airport line with rail services to regional centres.

A former cabinet colleague of Allan’s, speaking on the condition of anonymity, said the former premier was insistent the airport rail line had to run through Sunshine so that people travelling to the airport by train from Ballarat or her home town of Bendigo only needed to change trains once.

In December 2018, when defending the government’s decision not to make public a preliminary business case for the project, Allan hinted at a Sunshine bias. “We’ve released previously ... the strategic assessment of the four alignments, which is really what the preliminary business case was about, looking at those four alignments and giving [state and federal] governments the confidence that Sunshine stacked up the best,” she said.

Allan’s confidence in the strategic assessment was not shared by the Victorian Auditor-General’s Office (VAGO).

A 2022 VAGO report into the quality of government business cases used to support major projects was highly critical of the way that route options for the MARL were assessed, describing the work done as “not sufficiently rigorous” and lacking in transparency.

The auditor-general noted that the options assessments “significantly influenced” a state government decision to commit $5 billion to the project and were not “validated or revisited in any depth” before they were included in the published business case.

The airport rail allegations go to the heart of a question that commissioner Chris Kourakis has flagged will be central to his inquiry into the Big Build – whether the state government’s $100 billion infrastructure program was primarily designed to advance the public interest or Labor’s electoral prospects.

In his opening address to the inquiry, Kourakis noted that “governments must select and design infrastructure projects around the socioeconomic needs of the Victorian public, and not party political interest”.

The royal commission is scheduled to hold its first public hearings next week.

William McDougall, an independent transport planner who has worked in Britain, the Middle East and on signature Big Build projects including the West Gate Tunnel, North East Link, Suburban Rail Loop and the MARL, has told the commission this is not his experience.

“Throughout my career, I have seen an accelerating shift away from integrated, evidence-based planning towards politically selected and prioritised projects,” he writes in a submission provided to this masthead.

“The most egregious issue of all is that large projects are chosen for political reasons, announced and funded without the context of an integrated land use and transport plan.”

McDougall, who is aware of the allegations about the development of the MARL now before the royal commission, believes the project is a case study of where Victoria’s planning for and delivery of major transport projects has gone wrong.

“A strategic assessment of options … was used to justify the Sunshine/Albion route, but it was a highly skewed assessment with direct, political interference aimed at ensuring that the Sunshine route was the best,” he writes in his submission. “Faster, shorter and cheaper routes were rejected.”

Two further submissions to the royal commission, both made confidentially by former public servants, question the planning process and decisions taken that resulted in Sunshine being chosen as the route for a new airport line.

Carroll, since becoming Labor leader, has declared the airport rail link his “highest priority” major project. The government has selected a preferred bidder to redevelop Sunshine station, and Carroll last month was alongside Prime Minister Anthony Albanese to announce forward plans to lay down airport rail tracks to a proposed new station in Keilor East, in the middle of his electorate of Niddrie.

Carroll did not address the allegations before the royal commission when questioned by this masthead.

“The premier’s first act was to establish the toughest royal commission into the construction industry to leave no stone unturned,” a spokesman said.

“The terms of reference are broad and expansive. Nothing is off limits. We won’t pre-empt its findings.”

The Victorian Coalition has also backed the MARL. Opposition Leader Jess Wilson has promised to deliver the project, including a new station at Keilor East, if she becomes Victoria’s next premier. Both the Maribyrnong and Sunshine routes run through Keilor East.

Wilson has promised to expand the royal commission’s terms of reference so that it examines whether “any project was conceived, selected, prioritised, expanded, re-scoped, funded or continued, wholly or partly, to confer an industrial, financial, organisational or political benefit” to a trade union or political party.

Read more on the Victorian election:

• The polls: Wilson gains traction as Carroll’s popularity takes a dive
• Suburban Rail Loop: Construction will continue if the Coalition wins
• Empty lecterns: Carroll throws down the gauntlet to Wilson
• ‘Downward spiral’: The issue that’s firing up Victoria’s biggest names