NSW light rail farce deepens

By Leith van Onselen

Back in October, we reported how secret NSW Government documents had been released 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.

We 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, whose costs had also blown-out by over $500 million due to an incomplete business case, and was thoroughly rubbished in a damning NSW Auditor-General assessment. It was also revealed at the time that because of Sydney’s manic immigration-fuelled population growth, the light rail project will have 1,000 more people wanting to use it than its capacity when it finally opens in 2019.

And earlier this month, we reported that Sydney’s light rail farce had intensified, with the Spanish subcontractor building the eastern suburbs light rail project – Acciona – demanding an extra $1.2 billion from the NSW Government.

Today, ABC News reports that the consortium delivering the CBD light rail project, ALTRAC, has now told the NSW Government it is working towards a completion date of March 2020 — a full year behind schedule:

The project, which extends from Circular Quay to Randwick, has been a visible scar on the CBD.

Mr Constance said the delays were completely unacceptable.

“We must see them deliver in 2019, we must see them deliver to contract,” he said.

What was supposed to be a marquee transport project for the Berejiklian Government has become a major headache…

“We will ensure as best as possible that they ramp up their activity — they are on a ‘go slow’, anyone walking the city can quite clearly see,” Mr Constance said.

“They have construction zones where there is no workforce on the ground doing the work”…

The company has alleged it was made to believe electricity provider Ausgrid had reviewed and accepted the treatments of its utilities, but it had not.

What is interesting about all this is that Sydney CBD’s light rail disaster was predicted by infrastructure chiefs six years ago. Also from The ABC:

In 2012, Paul Broad, then chief executive of Infrastructure NSW, warned the Government about the problems of building a light rail in Sydney.

“If you add light rail to George Street today, you will not fix a problem, you will create a problem,” he told the ABC.

“You’ll walk as fast as a tram down George Street.”

An Infrastructure NSW report — released in October 2012 by Mr Broad and then chairman of Infrastructure NSW, former NSW premier Nick Greiner — alerted the Government to potential financial disruptions and lengthy delays.

Six years on and Greiner and Broad can now finally say “I told you so”.

Long delays. A massive cost blow-out. This project is shaping up as a millstone for Premier Gladys Berejiklian in the lead-up to the next state election, which comes on top of the football stadiums fiasco.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith is an economist and has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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