The state's Parliamentary Budget Office has calculated the cost-benefit ratio (BCR) for the first two sections of the Suburban Rail Loop (SRL) at between 0.6 and 0.7.
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.
The PBO report, released on Saturday, notes a BCR greater than one indicates a net benefit to society and governments may require a higher BCR to deliver their policy objectives or when choosing between potential projects.
The analysis was calculated at the request of the Victorian opposition, which has vowed to put the brakes on building the first part of the loop and instead redirect cash savings into the health system.
The SRL 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, showed the east and northeast sections of the line could cost up to $50.5 billion.
However, the PBO this month released a report that found building its first two stages could set taxpayers back $125 billion, more than double previous estimates from Labor.
The business case indicated the loop's first two parts had a BCR between one and 1.7.
In its BCR analysis, the PBO used its estimate of the future costs to build and operate SRL East and North, a KPMG economic appraisal and discounted benefits and costs by seven per cent in line with Infrastructure Australia's assessment framework.
It took the KPMG report, prepared in February 2021 for the state government, at face value and updated it to reflect current values.
"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 new BCR breakdown to declare the 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 has repeatedly criticised the opposition's stance, saying good governments must invest in transport and health infrastructure simultaneously.
He and Health Minister Mary-Anne Thomas are scheduled to make a health announcement on Sunday morning.
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