Taxpayers fork out billions for major project budget blowouts

Cost blowouts of almost $6 billion have hit 42 major projects in Victoria, including train station car parks and rail upgrades. These are the biggest budget blunders.

Forty two of Victoria’s big builds have seen cost blowouts totalling $6bn. Picture: NCA NewsWire

Almost $6 billion has been added to the budgets of 42 major projects in Victoria, the state’s auditor-general has revealed.

The massive overrun bill, for infrastructure ranging from prisons and hospitals to roads and bridges, does not include the looming budget blackhole at the troubled West Gate Tunnel project.

The Andrews Government has dismissed the audit “riddled with errors”, while the state opposition has slammed the waste as money that can’t be spent on helping families and businesses through the Covid-19 crisis.

In the audit report, tabled at state parliament on Wednesday, $99bn worth of major projects were assessed.

Scope changes blew out costs of 42 projects by $5.95bn, and reduced costs for 27 projects by $1.04bn — leaving a total impact for taxpayers of just over $4.9bn.

Department of Transport’s commuter car park program had the greatest percentage cost increase — 224 per cent — taking the total estimated investment to $486m, which the government said was due to a significant project expansion.

The Commonwealth has also been plagued by cost blowouts on its commuter car park scheme, which was savaged recently by the federal auditor-general.

In response to the state audit, the Andrews Government said it was a “snapshot in time” and not an accurate representation of how costs shifted on big builds.

“This VAGO report is littered with errors and does not provide an accurate picture of the record level of transport infrastructure investment the Government is currently delivering right across Victoria,” a spokeswoman said.

“The majority of Victoria’s 165 Big Build projects are on time and on budget – and they transform how Victorian’s travel while supporting more than 50,000 jobs.”

Shadow Treasurer David Davis said Victoria needed to follow in the footsteps of New South Wales by re-establishing a parliamentary committee with oversight of major projects.

A Department of Transport commuter car park program had the greatest percentage cost blowout. Picture: NCA NewsWire

“Labor just can’t manage major projects, as this report makes clear, and instead of being upfront with Victorians, Labor chooses to hide the true extent of its infrastructure mismanagement and cost blowouts,” he said.

“Infrastructure investment is important for all Victorians, but projects must be properly scoped and costs must be controlled.”

“Money is being squandered; money that could have supported families and businesses through the Covid crisis and the Covid recovery.”

Although there were no definitive figures for the trouble plagued West Gate Tunnel, the auditor-general found that project was likely to be more than 20 per cent over its approved budget and 6 months behind schedule.

Recently, project proponent Transurban told investors the overruns would be at least $3.3bn, and that its commitment to a two year delay — meaning the toll road would open in 2024 — couldn’t be guaranteed due to ongoing disputes about costs with builder John Holland and CPB.

The Western Highway duplication, between Ballarat and Stawell, was also at risk of increased costs that couldn’t be defined in the audit.

Other projects to have been hit by massive budget increase were the Chisholm Rd prison project, the Joan Kirner Women’s & Children’s Hospital Sunshine, and several regional rail upgrades.