THE extension of the Gold Coast light rail line is absolutely essential for economic development, Prime Minister Malcolm Turnbull said.

Mr Turnbull has announced a federal grant of $95 million to link the existing line to the main rail line in the state’s southeast in time for the 2018 Commonwealth Games.

He says the project will add billions of dollars of value to the local economy.

“Our cities are the crucibles of innovation, of enterprise - it’s where so much of our GDP was created and it’s vital that they have the right infrastructure, whether it’s telecommunications infrastructure or transport infrastructure like this,” Mr Turnbull said.

“Public transport infrastructure is essential, it is good for you - people that use public transport walk more often don’t they?” Gold Coast Mayor Tom Tate replied: “they do”.

“Tom has become much fitter since he started getting the light rail.” The PM also said people meet new people on public transport, like he met Premier Annastacia Palaszczuk earlier that morning, he chuckled.

With @steveciobo & Monica Brandt, owner of Gold Coast coffee school, as she explains the secret of making coffee pic.twitter.com/ACw0V57Yht — Malcolm Turnbull (@TurnbullMalcolm) October 11, 2015

Ms Palaszczuk said it was refreshing to have a prime minister who was prepared to commit to public transport and who recognised Queensland was a rapidly growing state.

“I intend to work very closely with Malcolm over the coming year to make sure we develop and implement the best for Queensland,” she said.

“This is a new era of co-operation.” Mr Tate said it was great all three levels of government were working together to deliver the project in time for the Commonwealth Games.

“How many ways can you say your appreciation to the premier and the prime minister with their vision to see that the Gold Coast is a premier tourist destination.”

Selfie with my good friend @TurnbullMalcolm on the light rail to Southport pic.twitter.com/vl03e9QtWn — Stuart Robert MP (@stuartrobertmp) October 11, 2015

Premier Annastacia Palaszczuk said the finished business case for the extension would be done by Christmas and confirmed construction could begin in April.

Selfie time for the PM after announcing $95m for Gold Coast light rail extension. @abcnews pic.twitter.com/C0yrStDAnO — Andree Withey (@andreewithey) October 11, 2015

EARLIER: Prime Minister Malcolm Turnbull will this morning commit $95 million to the second stage of the light rail.

The funding boost from the Federal Government will allow construction of the tram system link to Helensvale to go ahead by April and operational by the 2018 Commonwealth Games.

Mr Turnbull will make the announcement this morning with Premier Annastacia Palaszczuk after weeks of negotiations.

Mr Turnbull, who this week marks one month as Prime Minister after removing Tony Abbott from the leadership said work would go ahead.

“Construction of Stage 2 of Gold Coast Light Rail will provide the missing link from the Gold Coast to Brisbane,” he said.

“This project is vital for the Commonwealth Games transport task. It connects five competition venues and nine events to accommodation and public transport interchanges.”

It comes just weeks after the Gold Coast City Council committed $55 million of funding.

While the State Government has also committed funds, it has been unable to reveal how much its commitment is because of commercial in confidence restrictions while tenders for the tram system are open.

However, the state funding will come from existing savings with the Department of Transport and Main Roads’ budget, with no new spending required over the forward estimates.

Ms Palaszczuk welcomed the funding commitment and said the business case submitted to the Federal Government had made today’s announcement possible.

“I congratulate the Prime Minister Mr Turnbull for committing funding support to help deliver Stage 2 of Gold Coast Light Rail,” Ms Palaszczuk said.

“Once the Commonwealth was provided with the Business case, the Prime Minister prioritised the decision to fund this infrastructure which will be critical to the success of the Games.

“This funding commitment from all three levels of government is an investment in the success of the Commonwealth Games and the Gold Coast’s future. The new line will connect the Coast to

media_camera Prime Minister Malcolm Turnbull, Premier Annastacia Palaszczuk, Mayor Tom Tate, Federal MP Steven Ciobo and State MP Rob Molhoek riding the G:link on the Gold Coast. Picture: Scott Fletcher.

Brisbane and complement an impressive pipeline of new resorts and attractions already in train.”

Tenders close on December 23 and a contractor for the light rail will be named early in the new year.

Mayor Tom Tate said the funding agreement showed the value of all three tiers of Government working together.

“This announcement is a historic day for our city and will ensure this vital second stage of the light rail completed before the Gold Coast 2018 Commonwealth Games,” Cr Tate said.

“Gold Coast Light Rail patronage continues to exceed expectations, with an average of more than 18,200 trips made on trams each day.”

Originally published as Turnbull announces GC tram funding