Almost $200 million in savings from the Regional Rail Link project has been stripped out of public transport to pay for country highway upgrades, sparking protests from Australia's rail industry that it has effectively been punished for being efficient.
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The Abbott government's second budget diverted $187.5 million in savings from the Regional Rail Link towards the duplication of two regional highways; the Western Highway between Ballarat and Stawell and the Princes Highway between Traralgon and Sale.
It was revealed in the Andrews government's 2015-16 budget that savings had driven down the cost of building the Regional Rail Link from $4.1 billion to $3.65 billion.
The rail industry said it was being penalised for helping to deliver the multibillion-dollar regional rail link hundreds of millions of dollars below expectations, with the project's savings given to upgrading roads that were a direct competitor to rail travel.
"Decisions such as these are disincentives for the rail industry and its constructors and suppliers to work efficiently and effectively," Australasian Railway Association interim chairman Bob Herbert said.
Rail projects made up less than 5 per cent of infrastructure spending in the Abbott government's 2015-16 budget.
Mr Herbert said rail funding was "going over the cliff".
"This situation will not improve over the forward estimates without sustained future co-investment in urban rail, with federal funding of urban rail projects going over the cliff from $514 million in 2014-15 to only $17 million in 2018-19," he said.
However, the boon for regional highways was welcomed by the RACV.
It said the duplication projects were much needed in regional Victoria.
Brian Negus, general manager of public policy, said putting the savings into roads was a good outcome for the state, given the Abbott government's well-understood stance against funding public transport.
"The federal government has made it very clear they're not going to contribute towards metropolitan rail systems, so if there's savings, then rather than go back into a general federal government pool, we believe it's very appropriate to make sure the money stays in Victoria," Mr Negus said.
The 48-kilometre Regional Rail Link between west Werribee and Southern Cross station – Victoria's biggest public transport project since the City Loop's construction – is due to open next month.
It was jointly funded by the former Rudd and Brumby governments and mostly built under the former Baillieu/Napthine government.
It was approved after being given priority by Infrastructure Australia, Canberra's funding adviser for large infrastructure projects.
Peter Newman, a former member of the Infrastructure Australia board, said the authority had prioritised certain rail projects because they had good benefit-cost ratios and boosted city economies.
"Dense urbanism is fundamental to the knowledge economy, you've got to bring people together," Professor Newman said.
"The suburbs, the shopping centres, that's not where it happens. That's the consumption economy and that needs trucks and cars and the odd bus, but to make the knowledge economy work you've got to have rail."
