The Allan government has announced an $837 million cost blowout on Victoria’s long-awaited Metro Tunnel project.

The now $13.48 billion project aims to connect Melbourne’s east and west through the creation of an end-to-end rail line and five new underground train stations.

Transport Infrastructure Minister Danny Pearson today called a snap media conference where he blamed rising building, material and labour costs and unprecedented global events for driving up the cost.

Transport Infrastructure Minister Danny Pearson blamed rising building, material and labour costs for the blowout. (Nine)

“The reality (is), since 2017, nobody could have predicted a once-in-100-year pandemic, nobody could have predicted conflict in Gaza and in Ukraine and nobody could have predicted interest rate spikes,” Pearson said.

”It is just costing more to build anything, anywhere in the world, and we are now facing similar challenges here in Melbourne as a result.”

The project was initially costed at $10.9 billion when it was announced in 2016 and has since undergone several cost blowouts.

Anzac Station is one of five new stations being constructed as part of the Metro Tunnel project. (Joe Armao)

Pearson said up to $745 million of the additional taxpayer funds would go toward the project’s construction partner Cross Yarra Partnership, which will be chipping in a similar amount.

“We want to make sure the authority have all the resources it needs to get on and deliver this project,” Pearson said.

Upon completion of the project, new tunnels on the Sunbury, Cranbourne and Pakenham lines will run through five new CBD stations – Arden, Parkville, State Library, Town Hall and Anzac.

Passengers will be able to travel all the way from Sunbury to Cranbourne or Pakenham without changing trains.

Pearson said the project was going through a “testing and trialling stage”.

MELBOURNE, AUSTRALIA - OCTOBER 11  Generic image of metro trains at Southern Cross station on October 11, 2022 in Melbourne, Australia. (Photo by Darrian Traynor)
After the completion of the project, passengers will be able to travel all the way from Sunbury to Cranbourne or Pakenham without changing trains. (Darrian Traynor)

“We are so close. We are three stations down, two to go and this project will be completed in 2025, 12 months ahead of schedule,” Pearson said.

“The Victorian economy is incredibly strong and incredibly vibrant because of these investments we’re making.

“We are absolutely committed to delivering this project because Melbourne needs the Metro Tunnel.

“It is as simple as that.” 

Pearson did not divulge how far into 2025 the project would be completed.

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