Sydney light rail budget blows out to over $3 billion after NSW Government settles with builder
Sydney’s light rail project is by far the costliest project of its kind in the country after blowing out to $3 billion when the NSW government reached a $576-million settlement with consortium ALTRAC — which is delivering the project — and its Spanish builder Acciona.
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The cost of Sydney’s light rail project has blown out yet again, with the final bill to taxpayers tipped to be more than $3 billion — making it by far the costliest project of its kind in the country.
The latest price hike came after the NSW government reached a $576-million settlement with the consortium ALTRAC — which is delivering the project — and its Spanish builder Acciona.
The costly deal ends a stand-off between Transport for NSW and the two parties, which have agreed to have the first leg of the railway from Randwick to Circular Quay open by December, with the second leg of the line to Kingsford to open in March next year.
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The $576-million settlement brings the running tally of the troubled project to $2.77 billion, a figure that is expected to rise further once the project is completed in 2020. In 2012, the NSW government initially said the 12.7km line could be built for $1.6 billion, but this was upped to $2.1 billion in 2014, before being increased yesterday to the new total of $2.77 billion.
This equates to a staggering $218 million per kilometre — almost a third of the total $675 million spent building the entire Canberra light rail.
The capital’s railway was built for about $56 million per km and the Newcastle light rail cost $136 million per km. But Sydney does come in cheaper than some projects overseas — such as the Line 5 Eglinton in Toronto, which is expected to cost $401 million per kilometre, and the Crossrail in London, which is tipped to cost $272 million per kilometre by the time it is completed in 2021.
However, both of these lines are significantly larger than the Sydney light rail.
A senior rail industry source said project costs can vary greatly due to the relocation work required to move telecommunications, sewer and electricity services for some inner-city developments.
Transport Minister Andrew Constance said the $576 million settlement package resolves $1.5 billion worth of legal claims with ALTRAC and settles court action brought by Acciona, which was separately seeking $1.1 billion for being misled over the project’s complexity.
Mr Constance called the it a “complex” settlement that would ensure passenger services between Randwick and Circular Quay would run this year.
“This is an important … agreement with the builders and operators of the new light rail project, it’s designed to make sure that we reset the relationship in commercial terms with the builders and operators,” he said. “Everybody has skin in the game and everybody has lost skin as a result of this project.”
The $576-million settlement includes $129 million in milestone payments which will only be awarded to the ALTRAC consortium if it hits its operational targets.
Mr Constance said the final cost of the project would not be known until next year, but admitted “further costs” would be incurred.
According to the most recent salary bands, a probationary constable in the NSW Police Force earns $71,814 per year, a registered nurse earns $68,328, and a graduate teacher is paid $68,929 per year.
This means the NSW government could have paid the salaries of about 8000 police, or 8400 registered nurses, or 8350 teachers with the $576 million settlement money.
NSW Labor’s interim Opposition Leader Penny Sharpe said the light rail project has been a disaster.
“When it started Gladys Berejiklian’s pet project was supposed to cost $1.6 billion and it was supposed to be open by now,” she said. “Now we find out it’s upwards of $3 billion, and there is still not a start date for this project.”
Ms Sharpe said the $576-million settlement was a blow to taxpayers and represented a backflip by Transport for NSW in its court proceedings.
“Let’s remember that the Premier and the Minister for Transport have been saying for months now that they were not going to pay a cent (in court), that they had no issue to answer in relation to their conduct and the work of the contractors, and today we find that taxpayers are now in the book for $576 million,” she said. “This project is upwards of $3 billion and likely to be more, this is not what the people of NSW were promised.”
An ALTRAC Light Rail spokeswoman said the group was pleased with the settlement and was starting to increase the amount of tram testing along the railway.
Originally published as Sydney light rail budget blows out to over $3 billion after NSW Government settles with builder
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