State Treasurer warns: North-South Corridor may require billions in extra funding

SA will struggle to complete the North-South Corridor on time unless the federal government helps cover a potential $4bn blowout to the project’s eye-watering budget.

South Australia will struggle to build the final stage of the North-South Corridor on time unless the federal government helps cover a potential blowout in the project’s eye-watering budget, state Treasurer Stephen Mullighan has warned.

Ahead of Labor’s first federal budget next week, Mr Mullighan has revealed the state is not prepared to shoulder an increased cost to the Torrens to Darlington project alone.

The Advertiser understands the project could cost about $14bn – up from the original estimate of $9.9bn.

The federal government would not confirm whether it would maintain its 50:50 funding deal with South Australia should the project’s price tag balloon beyond the $9.9bn estimate.

“It’s extremely difficult for a jurisdiction like South Australia to be biting off the financial commitment that we are already up for – that (50 per cent) of the $9.9bn,” Mr Mullighan said.

“If we don’t have a Commonwealth funding partner if the project becomes even larger, that’s going to make it very, very challenging to deliver.”

State Treasurer Stephen Mullighan has warned SA would struggle to deliver the Torrens to Darlington project if the federal government does not help cover a potential cost blowout. Picture: Sarah Reed / Getty Images

Adding to a planned $3.2bn Women’s and Children’s Hospital, Mr Mullighan said “there’s not endless capacity to absorb high-cost projects or a greater funding share (for the Torrens to Darlington section)”.

The state government has not yet completed its review of the Torrens to Darlington reference design, meaning the federal government is unlikely to make any substantial funding changes in next week’s budget.

“If there needs to be any change, it will be something that’s contemplated in next year’s federal and state budgets (in May and June),” Mr Mullighan said.

Under the Coalition’s March budget, the federal government had allocated $2.3bn up to the end of the 2025-26 financial year.

The start of construction has been pushed back from 2024 to 2025, with the project’s completion also delayed a year to 2032.

“If there are cost impacts, it won’t necessarily be something that has to be consumed in the next two or three years, which means we’ve got time to work out with the Commonwealth how we’re going to tackle it,” Mr Mullighan said.

Torrens to Darlington North-South Corridor design image. Picture: Supplied

Liberal SA senator Simon Birmingham said Labor was “taking South Australians on an unnecessary slow ride”.

“By putting the final stages of the North-South Corridor in the slow lane, Labor is now piling up extra costs, creating huge uncertainty for all those affected and leaving SA freight and commuters literally stuck in inefficient bottlenecks,” he said.

A spokesman for federal Infrastructure and Transport Minister Catherine King said the government would “consider any proposal for additional funding in line with usual budget processes”.

Federal Treasurer Jim Chalmers has previously said next week’s budget will contain “difficult decisions” and “confirm the stark deterioration” of economies around the world.

PwC analysis shows at least $44bn must be cut from the budget annually to reach a surplus in 12 years and zero debt by 2050.

Major changes to the Torrens to Darlington design were revealed on a draft Transport Department website that was uncovered by The Advertiser this week.