Tempers are boiling over between the Victorian government and Melbourne Airport amid a stalemate on a long-awaited rail link to Tullamarine.
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Melbourne Airport Rail was spared the axe last week after a protracted federal infrastructure review into the multi-billion-dollar project.
But rather than sparking traction on the stalled project, it has reignited a stoush over whether the project's airport station should be built above or below ground.
The state Labor government prefers an elevated station, arguing it would cost taxpayers $1 billion less and take two fewer years to build.
But Melbourne Airport cast doubt on the cost claim in its submission to the federal infrastructure review, obtained by The Age newspaper.
Airport executive Jai McDermott suggested an underground tunnel to the airport could be a cheaper option, with costs kept to a minimum by redeploying tunnel boring machines and workers from the North East Link and West Gate Tunnel projects.
Deputy Premier Ben Caroll said the airport's analysis did not stack up, indicating it was not feasible to repurpose boring machines built for other major projects.
"What the Victorian government, for a long time now, has put forward does stack up," he told reporters on Thursday.
"It is a better option, a more feasible option and it benefits more than just those business travellers getting on their flights."
The Victorian and federal governments have previously committed to contributing $5 billion each towards the project, which is expected to cost between $8 billion and $13 billion.
The rail line to connect Melbourne to Tullamarine was originally due to be completed by 2029, with new and redeveloped stations in Melbourne's west.
Mr Carroll claimed the airport had not put any money on the table for the link, despite it previously being part of a consortium that offered up to $7 billion to build an underground station and express tunnels from Sunshine.
"The time for the Airport Rail link was yesterday," the deputy premier said.
"We don't need any more obfuscation, we need to get on and deliver this project."
A Melbourne Airport spokesman said an underground station remained its preference, pointing out the government had previously pushed for an elevated solution on the grounds it could be delivered faster.
"Having opted to delay the project, the state government has demonstrated a willingness to work to a longer timeline and as such, we would encourage the state to work constructively with Melbourne Airport to properly explore an underground option," he said.
The airport also referenced the partial publication of letters sent to then-transport infrastructure minister turned Premier Jacinta Allan in 2021, showing senior executives had questioned the benefits of the project.
"If the state government is serious about this project it should spend less time leaking letters and more time focused on delivering a fit-for-purpose and future-proof airport station for Victorians," the airport spokesman said.
Victorian Opposition Leader John Pesutto accused the government of picking a public fight with the airport.
"What we need right now is the Allan Labor government to sit down with Melbourne Airport and resolve their differences, not escalate the dispute," he said.
Melbourne Airport's land is leased by the Commonwealth to the Australia Pacific Airports Corporation Limited under a 50-year deal.
Federal Infrastructure Minister Catherine King has flagged she will appoint an independent mediator to resolve the stand-off between Victoria and the airport.
A planning application for the Commonwealth-owned land can only be submitted by the airport, she said.
Australian Associated Press
