I noted yesterday how secret NSW Government documents were released late last year revealing that the Parramatta Light Rail Project – the centrepiece of the Government’s plans to cement Parramatta as Sydney’s second central business district, as well as facilitate the building thousands of apartments around Sydney Olympic Park – had experienced a massive cost blowout “to more than $3.5 billion – $2.5 billion above what has been budgeted” and the benefits are unlikely to meet the costs.
I also noted how the NSW Government had tried to suppress the release of documents relating to the controversial $2.1 billion CBD and eastern suburbs light rail project, which had also blown-out by over $500 million due to an incomplete business case, and was thoroughly rubbished in a recent damning NSW Auditor-General assessment.
Today, The Australian reports that incoming NSW Transport Minister, Andrew Constance, sought to dump the Parramatta Light Rail Project, which his office described as “a dog of a project”, but was unable to do so due to the huge costs involved in breaking the contract:
Bureaucrats told [Constance] and his senior staff the contract signed by then transport minister Ms Berejiklian was watertight and cancelling it would create “sovereign risk” and be too expensive, The Australian has learnt. Since then Mr Constance has had to make several announcements about the light rail line and praised it.
After the 2015 Coalition election win, Mr Constance was moved by former premier Mike Baird from Treasury to Transport, with Ms Berejiklian made treasurer, ahead of her becoming Premier less than two years later.
According to an account of one early meeting, Transport for NSW secretary Tim Reardon and other senior bureaucrats told Mr Constance there was “sovereign risk” in any attempt to dump the line. “The words he (Mr Reardon) used were ‘the Spanish have tied us up in knots on the contract’,” a source in the meeting said.
“The contract was signed in such a rush, every alteration we want to make is costing us five times as much as it should have.
“There was a view (in Mr Constance’s office) at the time that this was a dog of a project.”
At another meeting, bureaucrats again told Mr Constance and his senior staff the project could not be cancelled…
Yesterday the opposition questioned how the project would be funded, given the state budget allocated only $1bn to the project.
Yesterday, former Head of the Productivity Commission, Gary Banks, attacked the ACT Light Rail Project, claiming “good analysis seems to go out the window with trains”.
Banks’ criticism seems equally apt when it comes to NSW’s farcical light rail projects.
