Sydney Metro paying contractors $2300 a day amid cost blowouts

Sydney Metro is paying about $2300 a day for each of the more than 500 people hired as contractors to work on the city’s driverless train projects.

The details about the average rates of $286 an hour for the so-called professional services contractors are contained in a response from Sydney Metro to questions raised during an upper house inquiry into the NSW government’s use of consultants.

Sydney Metro is charged with delivering the country’s largest public transport project.Credit: Janie Barrett

Rates of almost $2300 per day would equate to more than $500,000 annually if contractors remain with Sydney Metro for 12 months. Sydney Metro confirmed that 287 contractors had worked in roles at the agency for more than six years, while 12 years was the longest for one.

The insight into contractor pay comes as the government is due to shortly release a final report from a review it commissioned into Sydney’s $65 billion metro rail projects following major cost blowouts.

Sydney Metro said in its response to the upper house inquiry that it was charged an average hourly rate of $286 for the 520 “integrated team members” it had as at September 19. The contractors are provided by labour hire companies and other professional services firms.

The Herald revealed last month that the contractors had been repeatedly hired on short-term contracts worth more than $500,000 a year for up to a decade. It was also revealed that Sydney Metro allowed contractors who were senior managers to run private companies that recruited people to the agency.

The Sydney Metro projects include a new rail line that runs under the central business district.Credit: Brook Mitchell

Greens MP Abigail Boyd, who chaired the inquiry into consultants, said Sydney Metro’s wide-scale use of contractors highlighted a hollowing out of public sector capability under the previous government.

“This happened under the leadership of Metro’s upper management. Labor needs to do more than sit back and rely on another internal review,” she said.

“Heads should roll over how so much public money was allowed to be spent in this way. It’s just poor financial management.”

Boyd, a former UBS investment banker, said it was clear that there needed to be a blanket ban on consultants and contractors sitting on Sydney Metro’s recruitment and tender panels.

A spokesman for Transport Minister Jo Haylen said Sydney Metro had already begun to assess its contracting arrangements and had tightened its hiring arrangements around contractors.

“Metro’s practices around contracting need to be transparent and we need to make sure that taxpayers are getting value for money,” he said.

In response to specific questions on notice about several contractors, Sydney Metro said records show that interface management acting director James Hayward had been on two labour hire selection panels, while utilities director Paul Rogers had been on one.

It said the records show that Rogers was a member of two tender evaluation panels but that the company he founded, Pro Consultants, was not a tenderer for the services.

The agency also said records indicated that Hayward had been involved in two government recruitment panels, but that in both instances final approvals were made by a delegated government employee.

Following the revelations last month, Sydney Metro started a wide-ranging review of contractor arrangements to scrutinise their “longevity and value for money”.

As an interim measure, any labour hire firms or contractors on deals worth between $50,000 and $250,000 – or variations to them – need to be signed off by two senior Sydney Metro executives. Those worth more than $250,000 require the extra approval of the Sydney Metro chief executive.

A spokesperson for Sydney Metro said there was a well-documented skills shortage in the infrastructure market owing to unprecedented investment in major projects across the east coast of Australia.

“For a number of specialised roles in high demand, these individuals are often only available as professional services contractors,” she said.

Transport for NSW also disclosed to the inquiry its spending on the big-four consulting firms, which show it paid $21.5 million to EY in the year to June, followed by $18.5 million to Deloitte, $11.6 million to KPMG and $11.4 million to PwC.

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