A multibillion-dollar upgrade of the Dandenong railway line is in disarray after the Napthine government said on Friday it would not sign contracts with the consortium delivering the project until next year.
The government's admission that it could not commit to the project before November's election puts in doubt a string of promised improvements to Melbourne's busiest railway corridor, including 25 new "high-capacity" trains, four level crossing removals, three rebuilt stations and new signalling technology. It would deliver capacity for 2 million extra passenger journeys a year on a line that suffers chronic overcrowding.
Labor has refused to commit to the project, arguing there is too much secrecy and uncertainty about how it would be delivered.
The government and the consortium had originally sought to sign contracts for the $2 billion-$2.5 billion project by September 30, but Public Transport Minister Terry Mulder said he was not yet confident enough that every part of the project would deliver value for money for taxpayers.
Instead, the government has made an agreement with the consortium on the requirements it must meet before contracts are signed.
"We want the best design, the best delivery timeframe and the best value for money and we won't settle for anything less," Mr Mulder said in a media release.
"We expect that we will be in a position to sign contracts in mid-2015, subject to the evaluation processes demonstrating the project represents value for money."
The release was published on the government's website but, unusually, was not distributed widely to journalists.
The Cranbourne-Pakenham rail upgrade is an unsolicited proposal that was pitched by Metro, Melbourne's railway operator, in what would be the biggest public-private partnership for a public transport project in Australia's history.
The consortium, which includes Metro's Hong Kong parent company MTR, construction giant John Holland and UGL Rail Services, hopes to receive up to $5.2 billion in availability payments between 2019 and 2034.
The rush to sign off on the project by the end of September, just seven months after the government's surprise announcement in March, has been rocked by doubts about whether it featured enough local manufacturing and whether the proposed signalling upgrade was technically feasible.
Jill Hennessy, Labor's public transport spokeswoman, said the government's agreement sounded "like a PR exercise for a project that's falling apart".
"The public is being hoodwinked into thinking it's an imminent project when it's nothing of the sort," Ms Hennessy said.
Labor would not commit to any element of the project.
"We are committed to removing 50 level crossings and building Melbourne Metro," she said.
The consortium issued its own statement on Friday that it "will ensure it meets the requirements to deliver the Cranbourne-Pakenham rail corridor project".
Public Transport Users Association president Tony Morton said control of the project should be taken out of the consortium's hands and given to Public Transport Victoria.
"The project will be good for commuters if it's delivered properly but we have our doubts that it will be," Dr Morton said.