Last month, the ACT Labor Government signed the $710 million contract to build a 12-kilometre light rail line connecting Gungahlin in the north and Civic, thus locking taxpayers in to paying for the project.
Now, it has been revealed that it would cost ACT taxpayers between $220 million and $280 million to cancel the tram project in the event that the Liberal Party won the upcoming Territory Election – a move that Labor’s Capital Metro Minister Simon Corbell has labelled “reckless and lunatic”. From The Canberra Times:
The actual pay-out figure if the tram was scrapped would be based on how much the tram consortium had spent and committed to spend when the contract was cancelled.
Mr Corbell said the estimate had been calculated by the government, using the formula set out in the termination clause in the contract with the Pacific Partnership-led consortium, which will build and operate the tram…
Mr Corbell attacked the Liberals’ promise to tear up the contract as “mad” and “confirmation of the lunacy of [the Liberal] position”, with ongoing consequences as companies factored in the possibility of cancellation in their prices for future contracts.
If anything, it’s Labor that has been “reckless and lunatic” on the ACT Light Rail Project. Signing the contract only months before the Territory election is due was highly cynical and has similarities to Melbourne’s dodgy East-West Link project, whereby the contracts were signed just prior to an election being announced, before being cancelled by the new Government at great cost to taxpayers.
Given the highly controversial nature of the ACT Light Rail Project, the Labor Government should have instead used the election as a referendum on the issue, and attempted to gain a mandate, rather than locking taxpayers in to what is a very costly project with dubious benefits.
The ACT Auditor-General has already released a damning assessment of ACT Light Rail Project, claiming that the cost-benefit analysis used to support the Project was chock full of erroneous assumptions and spurious benefit inclusions, and is unlikely to provide net benefits to Canberra residents.
This followed damning assessments by the Productivity Commission and the Grattan Institute, which both found that investing in bus rapid transit could have delivered the same benefits but at around half the taxpayer cost.
Territory voters should not forget that the Light Rail Project only came to fruition because Labor lacked the numbers to form government and needed to gain support from the Greens sole MLA, Shane Rattenbury, who held the balance of power. And Light Rail was the ‘price paid’ for the Greens’ support.
Hopefully, the ACT voters will remember this waste and mis-management when they vote in the October Territory election.
