Completion of Greenline, the ambitious $316 million linear park proposed for the north bank of the Yarra River, has been effectively killed off after the City of Melbourne reduced the $9 million allocated to it in its draft budget to $400,000.

The council’s draft budget, announced on Tuesday, revealed savings from putting off major capital expenditures including Greenline, which has been “reprofiled” until further funding commitments are received.

Part of the Greenline has been completed, but the rest has been shelved.City of Melbourne

Greenline was the signature project of former lord mayor Sally Capp, but the plan for a four-kilometre elevated pathway modelled on New York’s High Line long struggled to attract enough state and federal funding to cover its $316 million price tag.

The full path from Birrarung Marr to Bolte Bridge is not funded. Only small parts of Greenline have been completed, including 450 metres of boardwalks and native plants on the banks of the Yarra at Birrarung Marr, which opened this year at a cost of $30 million.

Last year, the council’s budget redirected $14.6 million allocated to Greenline into paying for other projects, including a community hub in North Melbourne and a library in Southbank.

However, when asked whether Greenline was still going ahead, Lord Mayor Nick Reece insisted it was, despite the lack of money allocated to it for the second consecutive year.

“The recent transformation of Birrarung Marr has been an overwhelming success – making the vision of Greenline clearer than ever,” he said.

Reece said the $400,000 in the draft budget was an investment in the next stage of the project and other parts of the river were under “active consideration”.

“We’ve always said Greenline is a city-shaping project that relies on strong partnerships to bring to life, and we’ll keep pursuing new funding and partnership opportunities as they arise,” he said.

One council insider who did not want to be identified because of the impact on their career said Greenline had turned into a “special project”.

An artist’s impression of how the shelved Greenline might have looked near Flinders Street Station.

“The term they use in Canberra is ‘project to nowhere’, and it is just literally left in limbo,” they said. “If they are going to end it, just make the call. If we’ve got other businesses and people out there thinking Greenline is still going to happen, they might rent space along the Yarra thinking Greenline will be finished, and I think that’s just wrong. That’s fraud.”

Last year councillor Philip Le Liu put forward a motion to shelve Greenline and to only return to it in stages once each of its stages was fully funded, describing the project as it stood as “disingenuous”. However, his motion was defeated.

“I tried to clarify and get more transparency on it so we can decide on next steps and future planning,” he said. “Based on the figures in the budget, the future of the project speaks for itself.”

Le Liu said that if the City of Melbourne had confirmed commitment from other stakeholders, Greenline could be a good idea, but given the council had other unfinished and complex projects such as the Queen Victoria Market to deliver, it was not the right time or environment to be undertaking Greenline.

Committee for Melbourne chief executive Scott Veenker said scaling back Greenline’s funding was the right call and reflective of the realities of the current economic environment.

“Right now, every dollar needs to go towards projects that keep Melbourne’s economy ticking and businesses thriving,” he said.

When asked whether it was disappointing to see the funding pulled from Greenline, Capp said she engaged regularly with the council about Greenline and had a level of comfort from that.

“Of course I would love to see the project accelerated because I can see the benefits it delivers to the city, but everyone has to be pragmatic,” she said. “I believe it will happen.”

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