Contractors demand more money to compete Sydney’s light rail project

The contractors building Sydney’s controversial CBD light rail project are after hundreds of millions of dollars more in payments to complete the project, threatening delays or a cost blowout.

Construction of Sydney's $2.1 billion light rail is on track for completion in early 2019 despite several zones along George Street missing completion deadlines.

THE contractors building Sydney’s controversial CBD light rail project are after hundreds of millions more in payments to complete the project, threatening delays or a cost blowout.

Senior government sources have confirmed that the Altrac consortium, involving Spanish firm Acciona and French firm Alstom, have demanded extra money for “variations” to the project, some resulting from the discovery of extra utility connections and wires underground after digging up George Street in the city.

Other variations payments being requested are to do with alterations to the route.

Premier Gladys Berejiklian has already been accused of bungling the project by allowing trams up to 65 metres in length on the route and because of a blowout from $1.6 billion to $2.1 billion when she was transport minister.

Corner of George Street and Bathurst Street where work started more than 18 months ago.

But now contractors are in dispute with the government on several stages of the $2.1 billion project as they look to finish it by the government deadline of just before the 2019 state election.

One source said there was a “lingering threat” over the government in terms of work halting on the project.

A spokesman for Altrac did not deny there was hundreds of millions of dollars in dispute.

“Altrac is continuing construction of the CBD and South East Light Rail, for delivery in early 2019,” the spokesman said.

“This includes ongoing work in George Street, where more than 1km of track has been laid.

“Any commercial arrangements under the SLR [Sydney Light Rail] Deed are commercial in confidence.”

Last November, the opposition’s transport spokeswoman Jodi McKay questioned Transport Minister Andrew Constance about the consortium’s demands in Question Time.

“Is the Minister or his department in receipt of any correspondence from the Spanish infrastructure firm Acciona requesting additional funds to meet the project deadlines for the completion of the CBD and South East Light Rail project?” Ms McKay asked at the time.

Mr Constance dodged the question, saying: “The member for Strathfield should look at what is going on in this city — $73 billion is being spent across the state and the $2.1 billion light rail project is being built in the heart of the central business district [CBD] designed to remove hundreds of buses from CBD streets.

“. . Yes, a contract is in place. We expect it to be delivered to budget on time and we are going to continue to see great infrastructure built across this state.

“Happy Christmas, member for Strathfield.”

The Daily Telegraph has since confirmed that the consortium is after more money from the state government and the two sides have been in dispute.

One government source claimed that the extra payments could be made to the consortium without blowing out the $2.1 billion cost because the government had a contingency reserve available within that price.

The cost blowout has been partly blamed on the extra utility connections and wires found underground after digging up George Street.

Last November, two months before she became premier, Ms Berejiklian was accused of misleading taxpayers by claiming the $500 million light rail cost blowout was the result of “huge wins” in capacity on the project. An Auditor-General’s report released then found the blowout was due to “omissions and mispricing”.

Transport Minister Andrew Constance said yesterday: “Modifications and claims on large infrastructure projects are normal business and are worked through with the contractor on a commercial basis.

“I’ve been advised work continues on George Street and the rest of the line as normal.

“I expect the project to be delivered on time and within budget for light rail to be operating in 2019.”

A Transport for NSW spokesman said: “Transport for NSW and ALTRAC Light Rail are focused on building the CBD and South East Light Rail which is on budget and on time for delivery by early 2019.

“Commercial arrangements with ALTRAC Light Rail are managed with strictest confidentiality under the SLR deed.

“Construction of the light rail has continued to ramp up this year with work underway in 29 of 31 construction zones, including all of George Street, and a total of 6.2km of track has been installed.”