We have reached a truly remarkable situation in Victorian affairs where the government and opposition are each looking for a way out of the state’s largest infrastructure project, the Suburban Rail Loop.

Neither Premier Ben Carroll nor Opposition Leader Jess Wilson have said the first stage of the mammoth project won’t be completed. But each is giving serious consideration to dumping it and writing off a grotesque cost to taxpayers.

The question of what to do is a riddle wrapped in a mystery and ensnared in $14.5 billion worth of government contracts, with contracts worth billions more in the works.

A phone book of major construction and engineering companies are tied to the project until 2035 and beyond. As you read this, two huge tunnel boring machines are in the ground in Burwood, ready to start inching their way to Glen Waverley. The other launch site, at Clarinda, resembles an open-cut mine. Thousands of people are working on the SRL.

Yet, nearly a decade after it was conceived in secret, by a room full of consultants and a Labor government looking for something bright and shiny to wow voters with ahead of a state election – Operation Halo, the clever dicks originally called it – both sides of politics know we would be better off had the idea remained just a glint in James MacKenzie’s eye.

MacKenzie, you may remember, was Daniel Andrews’ go-to board director and in his pomp, the chairman of the Suburban Rail Loop Authority, Development Victoria, the Victorian Funds Management Corporation and a swag of other government boards and trusts.

As my colleague Kieran Rooney was busy telling readers before an imploding Labor Party so rudely interrupted, the SRL has never known whether it is a transport project studded by apartment blocks or a housing project with a rail line running beneath. This identity crisis endures because neither way of looking at it presents a compelling case.

The official price tag for SRL East, a twin underground rail tunnel planned to run between Cheltenham and Box Hill, is $34.5 billion.

That figure was calculated in 2021. A truer cost should become apparent next month, when the auditor-general hands down a detailed report into the project’s financing and revenue assumptions.

Opposition Leader Jess Wilson says that if the Coalition is elected in November, she will pause and review the project. Decoded, this means that barring the discovery of a small-scale nuclear device in the fine print of the contracts, she will cancel it.

Ben Carroll, since replacing Jacinta Allan as premier, has not spelled out what he plans to do about the SRL. “This will be a matter for the cabinet,” he said on Wednesday. In the next breath, he added that he valued public money and would not break contracts.

That does not mean they can’t be renegotiated.

In the same interview, Carroll enthused about Melbourne Airport Rail, another long-term project still in the planning stage. You won’t hear Victoria’s new premier talking like that about the SRL because, as he has privately told colleagues, he thinks it’s a lemon.

Carroll, like Wilson, understands the folly of the SRL is not merely the cost and questionable utility of the project but the lost opportunities to address more pressing needs, particularly in neglected parts of Melbourne’s fast-growing outer west and north.

His first step will be to direct the Suburban Rail Loop Authority to prepare for his cabinet a full briefing on what the authority is contractually committed to and what the government would be on the hook for if it cancelled the project. He might also ask Treasury for the value capture and other assumptions which underpin the project’s finances.

These details are known to only a handful of ministers. Carroll, despite serving as Allan’s deputy premier for the past three years, is not one of them. Within the confidential surrounds of the cabinet room, it is past time for the SRL’s authority to open its books.

It would be beyond crazy for any state government to cancel a project on which it has already spent billions of dollars. The $2.5 billion of early works are complete and paid for. The two consortiums chosen to do $5.3 billion of tunnelling are well and truly dug in. We don’t know how much of this they have already been paid.

Whatever the bottom line, spending those billions on an abandoned rail tunnel would be a scandalous waste of public money. The alternative is a classic sunk-cost fallacy – tip another $40 billion or $50 billion into a project that doesn’t stack up to justify money already spent. And that would only deliver SRL East – the first of three proposed stages.

This is Carroll’s conundrum, and potentially Wilson’s, in the coming months.

If the SRL is not built, it will be to Melbourne what the monorail was to Springfield, the cartoon hometown of The Simpsons. The money wasted would reduce to a rounding error the entire cost of not hosting this year’s Commonwealth Games.

While some of the land acquired by the government could be sold to developers, the Burwood launch site should be kept untouched, with tunnel boring machines at the ready, as an exhibit to remind future generations of what happens when governments treat the state’s finances like a campaign bauble.

Such a tribute would remove any need to erect a statue of Daniel Andrews outside Treasury Place, a more modest construction project that Carroll says he has no interest in. Families could visit in SRL-branded hard hats and hi-vis vests, and gaze in awe at this wonder of the Andrews-Allan years.

A whopping great hole in the ground.

Chip Le Grand is state political editor.

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