Sydney’s metro rail line under harbour blows out by $6b

The cost of the NSW government’s signature metro rail line under Sydney Harbour and the central city has blown out by $6 billion, which has been blamed on an overheated construction market, the pandemic and surging building costs.

Nine months out from the next state election, it has also emerged that the first stage of the Parramatta light rail line has blown out by $475 million to $2.875 billion, largely due to the cost of remediating highly contaminated land for a tram depot and recent flooding.

Premier Dominic Perrottet and Transport Minister David Elliott tour the City and Southwest tunnels in February.Credit: James Gourley

The budget papers reveal the government has already spent $12.96 billion on the City and Southwest metro rail line, almost two years before it is due to be completed. The government has been forced to inject a further $5.1 billion into the project over the next two years.

That will take the total cost of the rail line between Chatswood and Bankstown via the CBD to $18.5 billion, which is far higher than the original budget of $11.5 billion to $12.5 billion.

The $6 billion overrun is the equivalent of building two CBD and eastern suburbs light rail lines.
The government has also confirmed a 13-kilometre section of the City and Southwest line between Sydenham and Bankstown will open up to 12 months’ later than the rest of the largely underground railway in 2024.

Work on the Bankstown section of the driverless metro rail line has stalled for months amid an industrial dispute between unions and the government. Converting the existing rail line to carry fully automated trains also makes it one of the more challenging parts of the project.

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The latest cost blowouts come after the government was forced to put on ice several planned mega projects, including the Northern Beaches Link motorway and an extension of the M6 toll road in Sydney’s south.

Transport for NSW blamed the blowout in the City and Southwest rail project on an “overheated major project pipeline, reduced risk appetite from contractors, and significant price escalation on materials and labour”.

The agency said the revised cost included $1.7 billion due to the pandemic, which “caused significant disruption” to the workforce, the construction production and the supply chain.

“The additional funding ensures passenger services on the Chatswood to Sydenham section of the project will commence in 2024 as planned, with services to Bankstown commencing within 12 months of the first trains running under the harbour,” it said.

However, the agency warned that the industrial relations dispute between the Electrical Trades Services Union and Sydney Trains had cost the metro rail project more than $50 million, and “additional significant cost and time impacts” would occur if industrial action recommenced.

Despite putting several projects on ice, the government has committed $602 million to start building the second stage of the Parramatta light rail line from Camellia to Olympic Park.

Yet in a sign of the pressures on the project, the cost of the first stage of the light rail line from Westmead to Carlingford via the Parramatta CBD has escalated by $475 million to $2.875 billion.

Transport for NSW said the remediation of heavily polluted land at Camellia, near Parramatta, had “impacted the handover” of the site to a major contractor to begin building a major depot for the trams to be used on the light rail line.

It said the pandemic and significant flooding across the region had also disrupted the project.

Labor transport spokeswoman Jo Haylen said every single dollar wasted on existing projects was money that could not be spent on new public transport desperately needed in rapidly growing areas of western Sydney.

“In real terms, this $6 billion blowout means $6 billion out of the infrastructure pipeline for good,” she said.

“It means that growing communities will have to wait longer before they get new transport services.”

The latest blowouts come after the Herald revealed last year the cost of the biggest part of the metro rail network – the Metro West line between central Sydney and Parramatta – risked ballooning to almost $27 billion, which is nearly $3 billion more than earlier estimates.

The Herald has also previously revealed the cost of the first stage of a new motorway known as the M6 in south Sydney has blown out by $400 million to more than $3 billion.

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