The business cases for two of Victoria’s biggest transport infrastructure projects don’t support sound investment decisions, an audit has found.

The auditor looked at four projects including the multi-billion dollar Suburban Rail Loop (SRL) and Melbourne Airport Rail (MAR), as well as two smaller road upgrades.

Auditor-General Andrew Greaves found the business case presented by agencies to the government for the SRL only analysed part of the program and fell short of Department of Treasury and Finance guidelines.

The MAR business case also didn’t meet DTF guidelines and was too late to inform key government decisions, he found.

The report says failure to apply the Lifecycle and High Value High Risk (LHVHR) guidelines created a risk that the value of the projects was ovestated.

“Business cases for three of the four projects we reviewed do not support fully informed investment decisions,” Mr Greaves says in his report released on sept 21.

“This is because the business causes lacked sufficient analysis of alternative options and the business cases were not finalised until after the government had made significant financial commitments to them.

“Without a comprehensive business case, decision-makers do not know whether the investments they make will maximise benefits to Victorian communities.”

The auditor’s findings come after a report by the Australian Population Research Institute released last month warned the  Suburban Rail Loop was on track to becoming an under-utilised debt bomb.

The report makes six recommendations the Department the of Treasury and Finance, the Department of Transport, the Major Transport Infrastructure Authority and the Suburban Rail Loop Authority.

They include:

• Improving ILHVHR guidelines

• providing the government with a full business case for the entire suburban rail loop program

• providing a please explain on why DTF guidelines weren’t followed

The agencies involved in the business cases have taken umbrage with the auditor general’s assessment, saying the Melbourne Airport Rail project is large and complex, and the Suburban Rail Link involves unprecedented city-shaping works.

As such, it was “inappropriate and misleading” to assess them against guidelines that applied to smaller projects.

The government has said it will continue to ‘refine the cost’ of the SRL, although it has confirmed the first stage, SRL East, is expected to cost up the $34 billlion. The MAR has been estimated at between $8-$13 billion.