IFM Investors has pledged AUD 5bn (USD 3.5bn) in a market led proposal (MLP) to build the Melbourne Airport rail link from Southern Cross Station in the city.
The fund manager is leading a consortium called AirRail Melbourne that said on Sunday (16 September) it will begin construction on the new 27km rail line by 2020, two years earlier than currently planned by the Victorian government.
The consortium includes Melbourne Airport and Southern Cross Station, both of which IFM has large stakes in, and Metro Trains Australia comprising Hong Kong’s MTR, John Holland and CIMIC’s UGL Rail.
The federal and Victorian governments have already announced both will contribute up to AUD 5bn each for the rail line, which will in future be extended to the north and south of Melbourne to regional centres in the state including Geelong, Ballarat and Bendigo.
IFM’s AUD 5bn bid would provide custom built fast trains for the line that would run every 10 minutes and allow a travel time from the city to the Airport of less than 20mins. Ticket prices would be less than AUD 20 one way “at today’s prices”.
Apart from taxis, the main form of public transport now from Melbourne’s Tullamarine Airport is via private company SkyBus. This costs about AUD 18, with a bus every 10mins. Depending on traffic, it takes between 30 and 45mins to Southern Cross Station.
The plan also envisages a future high-speed train connection from Melbourne to Sydney could stop at Melbourne Airport.
The proposal would fund a new underground station at Southern Cross Station and the development of a “super hub” at Sunshine between the city and Airport where the government’s proposed AUD 50bn Suburban Rail Loop would connect in future.
Last week the Victorian government separately called for registrations of interest to finance and build the line.
It is understood AirRail Melbourne’s plan will be lodged as a MLP (also called an unsolicited proposal) – a form of PPP that requires the bidder have a unique proposal that no one else could match, avoiding a public auction. In this case, the fact that IFM is an owner of both the Airport and Southern Cross Station is being proposed as one unique aspect of its bid.
IFM has lobbied both the state and federal governments for about two years to fast track the construction of a rail line to the Airport.
It is understood to be behind the preferred route via Sunshine and extensions beyond the Airport and the city to regional areas announced by the Victorian government in November 2017.
In its first 30-year plan released in late 2016, independent government agency, Infrastructure Victoria, said the airport rail line wouldn’t be viable until some time in the next 15 to 30 years given the upgrades to the freeway going to the Airport. It proposed increasing the frequency of the bus services instead in the meantime.