The public sector, including the then top transport bureaucrat, was marginalised as consultants took charge of the early development of Melbourne’s Suburban Rail Loop, the state’s ombudsman says.

Ombudsman Deborah Glass says the DEDJTR’s top bureaucrat at the time, Richard Bolt, was among those kept out of the loop on the  multi-billion dollar orbital rail line which remained “shrouded in secrecy” until just before the 2018 state poll when it was announced as an election promise.

“Those within government who were excluded from the project – including the State’s then transport and economic development Secretary – were left wondering why specialist departmental knowledge was left untapped, and whether, if fully tested, the funds devoted to the SRL might instead have gone to better uses,” Ms Glass says in a report tabled this week.

The comments are contained in a wide ranging report on the erosion of independence in the public service, which found evidence of creeping and pervasive politicisation in the VPS.

“We found ongoing marginalisation of the traditional public sector – a more subtle form of politicisation – in the early development of the Suburban Rail Loop,” Ms Glass said.

Ms Glass also said Mr Bolt had “observed government over-reliance on external sources of advice weakened the public sector, and the more this happened, ‘the more politicised it has effectively become”.

Role of ministerial staffer

The SRL, which has been described as the ‘biggest transformation of public transport in Australian history’, involves the construction of a new orbital rail connecting Melbourne’s major train lines,  new underground train stations and construction of  three ‘super-hubs’.

The SLR is described as the brainchild of a former Ministerial staffer identified as ‘Executive S’ who was appointed to a corporate strategy role within infrastructure agency, Places Victoria in 2016.

Executive S was a long-standing ALP member and was involved in costing recent ALP state and federal election policy commitments. He told the Ombudsman he was not an office holder and had only attended one branch meeting in ten years.

The report doesn’t suggest any wrongdoing by Executive S.

Timeline:

Dec 2016 – Executive S appointed to Places Vic Board

April 2017 – Exec S engages PWC to assess SRL concept

April 2017 – PWC delivers a preliminary assessment

Oct 2017 – DPC commissions Development Victoria to prepare a Strategic Business Case by January 2018

April 2018  – Cabinet considers and endorses 2018 Strategic Business Case

Aug 2018 – DEDJTR Secretary is informed of project

Aug 2018 – SRL proposal is publicly announced with a pre-election commitment of $300 million to develop a full business case, design and preconstruction works

Nov 2018 – Government is re-elected at the state election

Excessive secrecy

Ms Glass says the investigation found no single authoritative assessment of the cost of the  SRLK.

However, it says a strategic assessment for the SRL East, North and Airport sections in 2018 was up to $63 billion. Separate advice from the Parliamentary Budget Office in 2022 estimated that building and operating two of three segments would cost more than $200 billion by mid 2084.

Since the idea was hatched in 2017, it remained secret for 17 months while being farmed out to consultants for evaluation, with 11 public sector employees signing confidentiality deeds.

“It was subject to excessive secrecy and ‘proved up’ by consultants rather than developed by public servants,” Ms Glass says.

The stated reason for the secrecy was to mitigate against land speculation.

But Ms Glass says this doesn’t stack up, because no land was acquired before the public announcement.

The lack of proper public sector scrutiny over projects of such scale, before they are announced, poses “obvious risks to public funds”, she says.

Ms Glass says since its announcement, the SRL’s projected cost has increased exponentially and will dominate Victorian infrastructure spending for generations.