Before the City Loop was constructed, Flinders Street and Spencer Street (now called
Southern Cross) stations were connected only by the four track
Flinders Street Viaduct beside the
Yarra River. The suburban terminus of Flinders Street had become seriously congested by the 1970s, with a throughput of only ten trains per
platform per hour (roughly 1,700 trains a day) — compared to a maximum of 24 if there was through running. Many trains were
through routed from the southern and eastern suburbs to the north and west, but the flow was imbalanced and a number of trains were required to reverse their direction. The 1940
Victorian Railways Ashworth Improvement Plan recommended a different approach, with additional platforms at the
Flinders Street/
Princes Bridge station complex to be built over two levels, along with a connection to an underground City Railway. The Victorian Railways promoted another route in 1950 as part of the
Operation Phoenix rehabilitation plan, the line running from
Richmond towards
Jolimont station, under the
Fitzroy Gardens and
Lonsdale Street then turning north to
North Melbourne station. A branch line turned north from
William Street, and went through the
Flagstaff Gardens. In 1954 the
Melbourne & Metropolitan Board of Works released their Planning Scheme for Melbourne report, which included the Richmond – North Melbourne Lonsdale Street route. The plan included four stations, being cut to the present three by the elimination of one under Latrobe Street.
Construction , with the
State Library of Victoria in the background.|alt=Construction of Museum station in July 1974, showing cut and cover excavation of La Trobe Street, with the State Library of Victoria in the background. Following the
1969 Melbourne Transportation Plan, the Melbourne Underground Rail Loop Act 1970 was introduced into parliament by Transport Minister
Vernon Wilcox, and the Melbourne Underground Rail Loop Authority (MURLA) was created on 1 January 1971 to oversee the construction and operation of the loop. The
City of Melbourne, the
Melbourne & Metropolitan Board of Works and the
Victorian Railways all made annual contributions to support the operating costs of the authority. .|alt=Construction of Museum station in July 1974 looking towards Coop's Shot Tower.
Tunnelling works under the city streets commenced in June 1972, using a
tunnel boring machine built by Richmond engineering firm
Jaques Limited. as well as conventional boring methods. At North Melbourne, Spencer Street and Jolimont Yard,
cut and cover tunnelling was used to build the access ramps, with the above ground running lines being slewed from time to time as work proceeded. The first completed
tunnel was the
Burnley Loop, with the final
breakthrough made on 8 June 1977 near the Museum station site. A "double sleeper" floating track system was used to solve the problem of ground-transmitted vibration and track noise, and the loop has some of the best-designed and quietest underground stations in the world. Traction power was turned on in October 1980, and the first test train ran on 4 December 1980. In 1965, the cost of the project had been estimated at between £30 and £35 million but, by 1975,
inflation had resulted in it rising to $255,600,000. Two short
documentary films,
Loop and
Action Loop, were commissioned by the MURLA to advertise the new railway to Melburnians, as well as abroad. The City Circle tunnel opened with special services on 6 December 1981, and
Clifton Hill services started using the loop on 31 October 1982. Parliament station opened on 22 January 1983, the Northern tunnel on 7 January 1985 (14 January 1985 with limited services) and Flagstaff station on 27 May 1985. As part of that, signalling infrastructure was altered and operations of the Caulfield loop were changed to run consistently anti-clockwise around the loop all-day, every day. In January 2023, the City Loop and its three stations were closed for two weeks to allow for major safety upgrades to the stations and tunnels. The works will upgrade smoke detection systems, extraction systems, fire detection, fire hydrants, CCTV, and intruder-detection systems. The cost ballooned from an estimated $43 million in 2014 to $469 million in 2023. The north-south tunnels were first recommended by the
Eddington Transport Report in 2008 as a way to increase the central city's rail capacity. The tunnel involved the construction of five new underground stations:
Arden,
Parkville,
State Library,
Town Hall and
Anzac. There are direct underground pedestrian interchanges with City Loop and other metropolitan services at State Library with Melbourne Central station, and at Town Hall with Flinders Street station.
Sandringham line trains will run through to
Williamstown and
Werribee via the
Flinders Street Viaduct. ==Layout==