Independent analysis shows Victorians would recoup as little as 60 cents for every dollar spent on Melbourne's proposed multibillion dollar rail loop, but the premier is disputing the figures.
Victoria's Parliamentary Budget Office has calculated the cost-benefit ratio (BCR) for the first two sections of the Suburban Rail Loop at between 0.6 and 0.7, lower than a previous estimate of 1 to 1.7.
It means that for every dollar spent on the project - a 90-kilometre orbital rail line from Cheltenham to Werribee via Melbourne airport - the state would reap between 60 to 70 cents.
A BCR of greater than one indicates a net benefit to society and governments often need a higher BCR to deliver their policy objectives or when choosing between potential projects.
The numbers were crunched by the government spending watchdog at the request of the Victorian opposition and published on Saturday.
The opposition has vowed to slam the brakes on building the first part of the line from Cheltenham to Box Hill and redirect cash savings into the health system if it wins the November state election.
The rail loop was unveiled by the Andrews Labor government as a major election policy in 2018 and the entire project was initially estimated to cost up to $50 billion.
A 400-page business and investment case, released in August last year, later showed the east and northeast sections could cost up to $50.5 billion.
However, the Parliamentary Budget Office this month released a report that found building its first two stages could set taxpayers back $125 billion.
The business case also indicated the loop's first two parts had a BCR between 1 and 1.7.
In the BCR analysis, the budget office used its $200 million estimate of the future costs to build and operate SRL East and North and took into account a KPMG economic appraisal prepared in February 2021.
"We do not independently estimate benefits, however, we note that quantifying the value of expected social benefits is less certain and inherently more difficult than estimating financial flows, and is, therefore, more subjective," the report said.
Shadow Treasurer David Davis seized on the newly minted BCR breakdown to declare the rail loop project doesn't stack up.
"This November, Victorians have a clear choice. Real solutions to fix the health crisis now, or an overpriced rail line across Melbourne's southern suburbs in 13 years time," he said in a statement on Sunday.
Premier Daniel Andrews didn't agree with the independent assessment, claiming there were "accounting issues" despite the PBO discounting benefits and costs by seven per cent in line with Infrastructure Australia's assessment framework.
"We can have an accounting debate as long as people want," he told reporters.
"The key point is this: get on and get things done. Don't leave it to another government to do what you should do and what the community needs."
