Victorian Premier Jacinta Allan says a delivery date for Melbourne's Airport Rail Link remains unknown as 'incredibly frustrating' negotiations over the finer details of the project continue.

The future of the project had been under a cloud while a federal government review into infrastructure projects took place.

In the review, which was released on Thursday, it was revealed the Commonwealth is scrapping 82 "high risk" projects, including 12 in Victoria.

Among projects being axed is the Geelong fast rail, the Baxter rail extension at Frankston, freeway upgrades and the Shepparton bypass.

However, the Airport Rail Link remains one of the federal government's infrastructure priorities and it says it is committed to delivering funding for it.

 

The Victorian government's plans for the Melbourne Airport Rail Link include an above-ground station at the terminal.(Supplied: Victorian Government)

Ms Allan welcomed the announcement but said negotiations with Melbourne Airport over the location of the rail line and station had been "frustrating".

"For three years we have been attempting to negotiate with the airport on how we can best deliver the rail line and the station," she said. 

"Those negotiations have been incredibly frustrating and … the stalling tactics from the airport have caused delay to that project."

Ms Allan said in order for the project to be a success the state government, Commonwealth government and the airport all needed to work together.

A Melbourne Airport spokesperson said its preference "has always been, and remains, for an underground station".

"The airport station must be fit for purpose and futureproof, to ensure that passengers are well served and so that neither the airport precinct or rail line are constrained as Melbourne continues to grow," it said.

"Melbourne Airport remains ready to work with the state and federal governments to develop and deliver this project for Victoria."

Design disputes with the airport

The previous Coalition government pledged $5 billion in 2018 to help build the rail link from Melbourne Airport to the CBD, which has been debated and planned for decades.

The Victorian government promised in 2018 to match the $5 billion commitment and said construction on the rail link could begin within five years. 

 

The Victorian government's plan for the Melbourne Airport Rail Link, which has a targeted completion date of 2029.(Victorian government)

Early works on the project had begun but were paused while the infrastructure funding review was carried out.

Meanwhile, the Victorian government has been dealing with cost blowouts on major projects like the Metro Tunnel and the West Gate Tunnel.

The state and federal governments are also locked in a dispute with Melbourne Airport, which wants the rail link to include an underground station at the terminal.

The current design features an elevated rail line and above-ground station at the airport.

Ms Allan said the airport was on land leased from the federal government and the Commonwealth needed to step in to resolve issues.

"The airport is a very different project … Victorian planning powers don't reach into the airport footprint," she said.

"So we do need to have the federal government work through their planning processes in order to get the approvals in place for both the rail line and the station built on airport land."

 

Melbourne Airport said its preference is for an underground station. (Supplied)

The project currently has a targeted completion date of 2029 but Ms Allan said it needed the Commonwealth powers and the cooperation of the airport before it could "reset" the delivery date.

The premier said the delayed project could incur cost blowouts and the state government would be seeking further contribution from the federal government. 

Dozens of projects could be scrapped

The federal government's response to the review of infrastructure funding suggests 82 "high risk" projects could be dumped.

The government argued the existing 10-year pipeline of 274 projects could not be delivered within the current $120 billion budget allocation.

Reviewers Clare Gardiner-Barnes, Mike Mrdak AO and Reece Waldock AM found many projects lacked merit and were at high risk of further delay.

"There are projects that do not demonstrate merit, lack any national strategic rationale and do not meet the Australian government's national investment priorities," the review reads.

"In many cases these projects are also at high risk of further cost pressures and/or delays."

Opposition Leader John Pesutto said many of the axed projects were needed, and said the premier's focus on the Suburban Rail Loop was sucking resources from other more worthy infrastructure investments.

"That project is starving the life out of so many other projects around our state, and it will affect the state's ability to deliver important services, whether it's in health, education, child protection or road maintenance,'' Mr Pesutto said.

Ms Allan called on the money from axed projects to remain in the state. 

"It is our clear expectation that all our funding allocated to those projects remains here in Victoria," she said.