Secret documents cast doubt over cost of Sydney’s new airport rail line

The NSW government insists the cost of building a rail line to Sydney’s second airport is on budget despite confidential documents showing it is now expected to be $2 billion more than previously disclosed.

Any surge in the price tag for the airport line in western Sydney risks again drawing into question the government’s justification for the project, which was savaged by the country’s peak infrastructure adviser last year when it warned that the cost would far outweigh the benefits.

The new metro rail line will connect St Marys to Western Sydney Airport, which is under construction at Badgerys Creek.Credit: Western Sydney Airport

The details about the airport line, which is due to open in late 2026, come weeks after the government conceded that the cost of building the City and Southwest rail line under Sydney Harbour and the CBD had blown out by $6 billion.

Warnings about the growing threats to the government’s flagship public transport projects are contained in a trove of previously confidential documents released to the NSW Upper House.

One of the “sensitive” documents by Sydney Metro, the agency overseeing construction of three new rail lines, warns that spending on the projects is expected to reach up to $15 million a day.

The document – dated April this year – reveals there are “over 350 very high and high risks driven by project costs” for the rail projects, which include a new line between central Sydney and Parramatta known as Metro West.

The Herald has previously revealed that the cost of Metro West risks ballooning to $26.6 billion, nearly $3 billion more than earlier internal estimates.

“Cost and time impacts are not well aligned with the size and speed of delivery of Sydney Metro projects,” the risk-assessment document says.

It states that the project budgets for the three new metro rail lines “now range from $13 billion to $26 billion”. The $13 billion refers to the airport line, which in late 2020 the state and then federal Coalition governments estimated would cost “around $11 billion”.

A strategic assessment by Sydney Metro in September last year also rated as “high” the risk of the agency failing to deliver “projects within the approved budget envelope”.

Despite this, Transport Minister David Elliott said he had been advised by Sydney Metro chief executive Peter Regan that the airport rail line project was “tracking to time and budget”, adding that it would be the “spine for communities across western Sydney”.

However, Labor transport spokeswoman Jo Haylen said the public deserved to know why the airport line project had blown out by $2 billion before shovels were in the ground.

“This cost blowout exists in black and white in the government’s own internal documents. The Liberal government needs to be honest with the public about the cost of this project,” she said.

Minutes of meetings for Sydney Metro’s risk committee also show it had concerns two years ago about a budget hit from the COVID-19 pandemic spreading to the airport line and Metro West.

The meeting documents detail fears that other infrastructure projects, and the timing of building the rail lines concurrently, would result in “unintended competition” for construction industry resources.

Sydney Metro said in a statement that the airport line was “tracking to time and budget”, and that the earlier City and Southwest project was at peak construction when many market pressures such as an overheated construction market began to take shape, “meaning their impact was more acute”.

“It is no secret that construction projects across the world are managing supply chain disruption, COVID-19 impacts and an overheated construction market with significant material and labour cost increases,” it said.

The agency said it was working with delivery partners on the airport line and Metro West to “mitigate these impacts”.

Unlike the other metro train lines, the 23-kilometre rail link from St Marys to the airport and Bringelly, where a new city centre is planned, is jointly funded by the NSW and federal governments.

In a highly critical assessment last year, Infrastructure Australia warned that the cost of building the airport rail line outweighed its benefits by $1.8 billion, and found the project’s business case was based on several flawed assumptions.

However, federal Infrastructure Minister Catherine King said the airport line would “benefit western Sydney communities for years to come”, noting that the state government’s advice was that the $11 billion project was “tracking to time and budget”.

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