Other problems faced by the network in the first decade of the 21st century included inefficient operations which had developed during years of low patronage, and a loss of corporate memory, caused in part by the privatisation of rail services in the late 1990s, which limited the flexibility of planners in dealing with the burgeoning passenger numbers.

Currie's plan also envisaged extensive improvements to the Melbourne tram network, including upgrading lines along St Kilda Road and Chapel Street to light rail standards.

[13] In 2006, the state government considered a plan to construct a combined road and rail tunnel beneath the Yarra River to provide an alternative to the West Gate Bridge, but the idea was deemed unfeasible.

[15] Later that year, it emerged that train operator Connex and coordinating authority Metlink were among stakeholders encouraging the government to consider a proposal similar to Currie's, but extended to Footscray in the city's west.

The state budget in early May revealed that none of the $50 million in planning money allocated the previous year had been spent, with new premier Denis Napthine deferring the project in favour of the East West Link.

[28] In February the following year, the state government announced that it was considering alternative alignments for the tunnel, because of concerns that cut and cover construction in Swanston Street would result in a massive disruption to traffic and retail activity for an extended period of time.

[32] However, it was heavily criticised, including by Lord Mayor of Melbourne Robert Doyle, who described the route change as a potential "100-year catastrophe" because of its failure to service the Parkville medical and research precinct.

Furthermore, the government revealed in the days following the budget that it had not produced a business case for its plan, and that the decision had been taken primarily on the basis of a "common sense" need to service its urban redevelopment project at Fishermans Bend.

[33] Other concerns emerged in the months following the budget, with experts publicly questioning whether the Napthine government had committed sufficient funding,[34] and whether the proposed tunnels could be engineered to successfully avoid the main Melbourne sewer.

However, questions remained about the state government's capacity to fund the remainder of the project, and it was reported that no business case had been completed, despite this being Labor's key objection to the Melbourne Rail Link plan when in opposition.

[69] The federal budget released in 2016 did however include $857 million redirected from other infrastructure projects to the tunnel, however, the funds did not represent additional support to Victoria but rather a reallocation of existing contributions.

[70] In June 2016, the John Holland Group was awarded a $324 million contract which includes the excavation of 35 metres (115 ft) deep open shafts adjacent to Swanston Street to enable the underground construction of the two new city stations, and the relocation of up to 100 subterranean utilities.

[71][72] A shortlist of preferred bidders for the project's main contract, the "tunnel and stations" public-private partnership, was released in August, along with further details of the MMRA's recommended engineering solutions.

[81] Meanwhile, a case was lodged in the Supreme Court of Victoria by protest groups in an attempt to force the government and MMRA to reroute the project around the St Kilda Road precinct.

[82] Objections to the tunnel's construction were strengthened in February, when the federal government implemented an emergency heritage protection order for the precinct, preventing the MMRA from removing around 100 trees.

By the time the competition closed at the end of October, more than 50,000 submissions had been made, and the project had gained international attention with author George R. R. Martin commenting on suggestions that the stations be named after locations from his Game of Thrones series of books.

[92][93] The selected names for the stations – North Melbourne, Parkville, State Library, Town Hall and Anzac – were announced in November of that year, with the government deciding on "common sense" options based on geographic location and ease of pronunciation.

Opposition leader Matthew Guy immediately signalled his intention to bring the dispute over the tunnel's design to the 2018 state election, writing to CYP to indicate that he would seek to include a station at South Yarra should his party win government the following year.

[99][100]Despite ongoing legal battles, tree felling in the St Kilda Road precinct began in February 2018, marking the commencement of significant construction in the area and the consortium's commitment to its design solution for the tunnel.

[103][104] In the same month, the state government announced an upgrade of South Yarra station separate from the Metro Tunnel, in order to address the concerns about its lack of connectivity to the project.

[107][108] In June, the state government released modelling demonstrating the project's contribution to improved accessibility in the CBD, with travel time savings from virtually all parts of Greater Melbourne to the Parkville and St Kilda Road areas served by the Metro Tunnel.

[109] In April, June, and July 2019, multiple rail lines in Melbourne's east were shut down for several weeks to allow construction of the tunnel entrances near Kensington and South Yarra.

[119] In May 2020, major traffic changes were put in place near Flinders Street Station in order to improve safety around large trucks entering acoustic sheds as a part of the project.

[145] The day before announcing his retirement then-Premier Daniel Andrews, whose government initiated the project in 2015, rode a test train through the tunnel at full speed, telling local media it was the best moment of his premiership.

[168] This will allow some trams routes to be directed away from Swanston Street towards the western end of the CBD, more evenly balancing services in the central city and reducing reliance on the Elizabeth and Flinders corridors.

It concluded that, when compared to the tunnel, upgrading to HCS would produce inferior outcomes because of its limited capacity benefits and its failure to integrate improvement of the existing network with service to new parts of the central city.

Additionally, the business case noted that by making incremental upgrades to the rail system without substantially altering its structure, the opportunity for more reliable operations as a result of fully segregated lines would be lost.

The Melbourne Metro is expected to relieve this pressure by allowing commuters to catch the train into the Domain Interchange and CBD from either the north-west or south-eastern suburbs, avoiding already congested tram routes.

Concerns existed over expected disruption along the Swanston Street corridor, with former Premier Denis Napthine controversially describing the alignment of the tunnel as akin to the Berlin Wall, which would "tear the city in half for up to two years".

[187] Initiatives to mitigate electromagnetic interference from the tunnels with medical equipment at nearby sites, such as the Royal Melbourne Hospital and the Peter MacCallum Cancer Centre, had also increased costs.