$100m blowout hits Australia’s new embassy in Washington DC

Taxpayers have had to cough up an extra $100m for Australia’s new home in Washington DC, which will boast views of the White House when it opens this year.

EXCLUSIVE

The cost of building Australia’s new embassy in Washington DC has blown out by a massive $100m, with the final price-tag more than 40 per cent higher than taxpayers were promised.

The seven-year project to build the new embassy – which US ambassador Arthur Sinodinos says “embodies the spirit of Australia” – will be completed this year.

But the original $236.9m bill has skyrocketed to at least $337m because of construction cost overruns, supply chain problems during the pandemic and the weak Australian dollar.

The new embassy will boast views of the White House from the site of Australia’s original home in Washington, which opened in 1964 on the famous “Embassy Row”.

In the 2015 budget, the federal government unveiled plans to demolish the old embassy, believing it had fallen into a state of disrepair.

An artist’s impression of Australia's new embassy. Picture: Bates Smart

Instead of buying a new building elsewhere in the US capital, the government chose to keep the $57m block of land and construct a new purpose-built embassy, while relocating its functions during the works to the nearby National Geographic building.

The Department of Foreign Affairs had expected to spend $5m renting the temporary office space and $9m fitting it out, including to bolster security and install IT systems.

Cost escalations totalling $32m had also been factored into the initial budget.

But DFAT would not provide a new breakdown of the spending as it admitted the blowout.

US ambassador Arthur Sinodinos checks out the construction works. Picture: Twitter

“The project has progressed well, but has been impacted by Covid-19 through lost productivity and supply chain issues, adverse foreign exchange for the Australian dollar, significant inflation rates and construction cost increases in the United States,” a DFAT spokeswoman said.

In a statement, she said the parliamentary standing committee on public works had been kept informed of the “challenges, delays, and requirement for additional funding for the project”, with the “total forecast cost” now expected to be $337m.

Australia's new embassy in Washington DC during construction. Picture: Supplied

Former prime minister Kevin Rudd will take over from Mr Sinodinos as Australia’s ambassador this month and will preside over the grand opening of the new embassy later this year, which some diplomats are hoping will feature Anthony Albanese and Joe Biden.

Bates Smart, the Australian architectural firm which designed the new building, hailed its “direct references to the distinctive Australian landscape: its bright and clear natural light and open skies, its warm materiality and its vast scale”.

“The use of these associations will create a civic building and symbol of Australia that is both enduring and welcoming,” it said.

Originally published as $100m blowout hits Australia’s new embassy in Washington DC