Building the first two stages of Victoria's suburban rail loop could set the state back $125 billion, a parliament advisory service says.
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The estimate accounts for the eastern and northern stretches of the project, running from Cheltenham to Melbourne Airport.
On top of the $125 billion, it would cost an estimated $75 billion to operate the first two stages of the project in its first 50 years, according to Victoria's Parliamentary Budget Office.
The office calculated the total $200 million estimate at the request of the Victorian opposition.
Opposition Leader Matthew Guy this week vowed to shelve the loop, instead pouring money for the eastern arm of the project into Victoria's health system.
Shadow Treasurer David Davis on Thursday called the office's findings an "alarming revelation", however he maintained the coalition would shelve rather than scrap the plan despite the projected costs likely blowing out even further if work is delayed.
"Part of the project may at some point be worth building," Mr Davis told reporters.
"We're redirecting money to health, which is needed."
The Victorian government is chronically unable to deliver projects on time or on budget, Mr Davis said.
The budget office's findings go significantly beyond the Victorian government's initial estimates, with costs originally slated at $50 billion for the entire line from Cheltenham to Werribee.
The government has put the cost of the eastern stretch at between $30 billion and $34.5 billion, while the budget office anticipated it would come in around $33 billion.
The parliamentary office pointed to significant economic benefits from the rail loop project, including a benefit-to-cost ratio of 1 to 1.7.
It also noted there was insufficient publicly available information to cost some elements of the eastern and northern stretches.
A Victorian Liberal Nationals government would "prioritise" the state's health system by temporarily shelving the infrastructure, as it was not possible to do both at the same time, Mr Guy said on Wednesday.
With early works already happening, though, the opposition would not rip up signed contracts.
In question time on Wednesday, Premier Daniel Andrews was among four Labor cabinet members to defend the project, saying it did not need to be a choice between one or the other.
"You need to do more than one thing at a time. That, it would seem, is beyond the capability of some," he told parliament, noting the project would become more expensive if put off.
Australian Associated Press
