Auditor-general reveals whopping $11.7bn cost blowout for Victoria’s major projects

A new report by the state’s financial watchdog assessing 110 key projects has uncovered an eye-watering budget blowout in the past year, adding to the woes of the Allan government.

The cost of major projects in Victoria has blown out by almost $11.7 billion in the past year, according to a report by the state’s financial watchdog.

The report assessed 110 projects and found that almost half had changed their budgets during their construction, and the five have had “significant” changes of more than 20 per cent of their total estimated investment.

“There has been a $11.66 billion net overall TEI increase across the major projects in our selection since last year’s review,” it says.

“Of the 10 projects reviewed in our 8 case studies, 5 have had a significant TEI change at some point in their life cycle.”

The cost of major projects has blown out by almost $11.7 billion in the past under the Allan government. Picture: NewsWire

Auditor-General Andrew Greaves savages the reporting of cost and scope changes to parliament and to the community, and that entities are “not systematically assessing significant changes’ impact on a project’s original cost, time, scope or benefits”.

“Public reporting about major projects is not meaningful, reliable or comprehensive,” he says.

This extends to revision of project benefits once scope changes or cost overruns land.

“Major projects are complex and changes to them can significantly impact a project’s originally intended social and economic benefits,” he says.

“Parliament and the community want meaningful information, in an accessible and useful format, about how effective public investment in major projects is and whether original project expectations are being met.”

Transport Infrastructure Minister Gabrielle Williams hit back at the report, questioning its validity. Picture: Jason Edwards

Transport Infrastructure Minister Gabrielle Williams hit back at the report, saying she had “serious concerns about its validity”.

Ms Williams claimed the report used additional scope and benefits — such as adding more level crossings or extra car parks to train stations — and presented it as a cost escalation.

“That is wrong, simply wrong,” she said.

She could not say what the Government thought cost blowouts were worth, but hit out at the Auditor-General for “shoddy methodology”.

“I don’t think it meets the standard that the Victorian people would expect of VAGO that they be professional, accurate and that they uphold certain standards of integrity.”

Originally published as Auditor-general reveals whopping $11.7bn cost blowout for Victoria’s major projects