A major Melbourne rail project is feared to have blown out by $300 million and may be a year behind schedule.
A mediator has been called in to manage the pending stoush between the state government and the consortium building the $11 billion Melbourne Metro Tunnel, the Herald Sun reports on Tuesday.
The consortium’s first claim is between $200 million and $300 million for extra costs incurred on the project, with scope for the total blowout to edge near $3 billion.
The rail project is planned to be finished in 2025, with the new North Melbourne, Parkville, State Library, Town Hall and Anzac stations to take three busy train lines out of the congested City Loop.
But the Herald Sun states the earliest the project could be finished is 2026.
“Rail Projects Victoria actively works with contractors on all of our projects to ensure they are delivered on time and on budget. Metro Tunnel is no different,” a government spokesperson said in a statement to AAP.
It comes after revelations in June that early construction works on the tunnel have cost $150 million more than first planned.
The initial construction-focused works were expected to cost $476.6 million, but that forecast has been revised to $625.5 million, Auditor-General Andrew Greaves said.
Money was saved in land acquisitions, reducing the total overspend to $95.8 million. The increase was due to the added scope of the project, a shorter time frame, and issues at the State Library Station site.
The auditor-general’s report also raised concerns about the capacity to handle further blowouts in costing.
Opposition transport infrastructure spokesman David Davis told 3AW it was time the government “came clean … about these cost overruns”.