The cost of building a massive light rail project in Sydney is set to blow out by as much as $600 million above the original estimate, media reports suggest.
The Sydney Morning Herald has reported that the cost of building the twelve kilometer CBD and South East Light Rail project extending from Circular Quay through Surry Hills to Moore Park and then on to Kensington had blown out from initial projections of $1.6 billion to a likely figure of around $2.2 billion – a blowout which had caused considerable consternation within the government.
"People are agog that they have managed to get away with it," a source is quoted as saying, whilst public transport advocates are reportedly concerned the price tag will serve as a distinctive for future governments in building light rail lines.
Transport Minister Gladys Berejiklian did not confirm the final figure but did acknowledge last month when announcing a preferred bidder that the project would cost an unspecified amount more than the original $1.6 billion dollar estimate (despite having denied earlier media reports that this would be the case) and reportedly told the newspaper last week that final costs were being worked out with the Sydney Consortium consisting of Transdev Sydney, Alstom Transport Australia, Acciona Infrastructure Australia and Capella Capital which was the successful preferred bidder .
Whilst Berejiklian put the cost increase down to an increase in estimated capacity (longer and more frequent services are now expected to be able to carry 13,500 people in each direction every hour, up from the original estimate of 9,000) as well as additional support staff for managing road closures, an internal review conducted in mid-2013 by Evans & Peck suggested costs of moving more than 2,000 subterranean services such as cables and pits throughout the city centre so that these could be accessed after a tram line is built on top would be more than the $75 million then budgeted for.
Moreover, the government is also being criticised for having announced the project’s original price tag years before it had completed an analysis of the route’s complexity and before undertaking negotiations with some of the major organisations along the route.
According to the Fairfax report, Transport for New South Wales was still in talks with Royal Randwick Racecourse, for example, about plans to build a stabling yard for trams on land used for parking at the racecourse.
Set to form a central plank of Sydney’s light rail future and take four or five years to build, the new network received planning approval on June 4, with the final contract expected to be awarded by the end of the year and construction expected to start in April next year.