SRL East is the state's largest, most expensive and most complex infrastructure project to date and needs strong governance, oversight and delivery arrangements. 

After early issues and frustrations, SRLA has improved how it works with the government and central agencies, DPC and DTF. 

SRLA has a clear commercial strategy and has set up extensive governance and oversight arrangements. While it is working to lower its owner’s costs, this could reduce its ability to oversee contractors and identify emerging risks. 

The draft planning controls proposed for the SRL East precincts should allow a level of redevelopment consistent with supporting the uplifts in population, households and employment needed to deliver the benefits asserted in the SRL Business and Investment Case. However, there are a range of factors that may constrain this development, including structural barriers to lot amalgamation and challenging market conditions in Victoria. 

At June 2026 there is a $5.5 billion gap in approved funding to deliver the project and significant uncertainty that funding targeted from sources other than the state Budget and debt will be fully achieved. 

In addition, public announcements and information on the government's funding strategy for the project lack transparency. The government approved and introduced a levy on all public transport fares in metropolitan Melbourne and regional Victoria as part of the value capture package for the project. 

SRLA has made significant progress in planning the SRL East precincts and procurement for, and early delivery of, the rail infrastructure works. 

However, project delivery on time and on budget is unlikely due to challenges and risks emerging at an early stage of the works including delays, unexpected ground conditions and contamination, higher than expected costs for some works packages and the impacts of government decisions to slow down spending on the project. 

We made 8 recommendations to address our findings. DTF accepted the 3 recommendations directed to it. SRLA did not accept the recommendations directed to it.

What we examined

Our audit followed 3 lines of inquiry: 

1. Is Suburban Rail Loop Authority's (SRLA) precinct planning for Suburban Rail Loop East (SRL East) proceeding as planned and consistent with delivering the benefits asserted in the SRL Business and Investment Case?

2. Are SRLA's precinct planning outputs consistent with realising the project funding streams identified in the SRL Business and Investment Case and related advice to the government?

What we do

Our role

The Auditor-General is an independent officer of the Victorian Parliament who is supported by the Victorian Auditor General's Office (VAGO). 

We provide assurance to Parliament and the Victorian community about how effectively and efficiently public sector agencies provide services and use public money.