Perrottet sets aside more than $600 million for second stage of Parramatta light rail

More than $600 million will be set aside for the second stage of Parramatta light rail in this month’s NSW budget despite the government preparing to adjust its signature infrastructure pipeline to focus on smaller items amid warnings of cost blowouts on future megaprojects.

The Herald on Wednesday revealed the government would push ahead with the second stage of the light rail after receiving advice from its independent infrastructure body to delay the project along with several others due to labour shortages and increased building costs.

Premier Dominic Perrottet has revealed the government will allocate $600 million to the Parramatta light rail stage two project in next month’s state budget.Credit: Flavio Brancaleone

Perrottet said the second stage of the light rail project, which will link Camellia to Sydney Olympic Park, was chosen to proceed despite that advice, given the amount of development in the area.

“There’s going to be much greater growth in western Sydney than there is in the Northern Beaches,” Perrottet told the Herald’s Infrastructure Summit on Wednesday.

However, the government will put several other major infrastructure projects on ice, including the Beaches Link and the second stage of the M6 in Sydney’s south.

An Infrastructure NSW report said while the government should continue its $27 billion annual infrastructure spend, it needed to sink the cash into smaller projects that provided higher returns and less risk.

Perrottet said the government was set to focus on more “diverse” infrastructure, including parks and upgraded local roads, having spent a decade building multibillion dollar metro rail and motorway projects.

“Talking only about big-picture megaprojects ignores the economically critical and socially fundamental attributes of every strand of the web that we call ‘infrastructure’,” he said.

He insisted the Coalition government would continue to work towards the big builds which have come to define it over the past decade, including the Beaches Link, but conceded the timing needed to be reassessed.

Asked during a Q&A session whether he would like to see more development on the Northern Beaches ahead of the now-delayed Beaches Link being constructed, Perrottet said “for sure”, though suggested Infrastructure Minister and member for Pittwater Rob Stokes may not agree.

Perrottet was initially tight-lipped about the amount of money the government would commit to the second stage, but a social media bungle resulted in the premier’s Twitter account announcing the $600 million figure before the tweet was deleted.

While the premier did not confirm that figure during the press conference, he later tweeted: “I’ve decided to end the suspense … due to popular demand … $602.4m will be committed in the budget to moving ahead with the Parramatta Light Rail Stage 2 megaproject.”

“This tweet will not be deleted,” he wrote.

NSW Transport Minister David Elliott said he expected a local component to the manufacturing of the trams which would be used on the light rail.

While delaying several major projects, Perrottet insisted that the government would continue to invest tens of billions in transport infrastructure at a rate that was more fiscally responsible.

An artist’s impression of the second stage of the light rail line over Parramatta River between Melrose Park and Wentworth Point.Credit: PAYCE

“There will no doubt need to be adjustments in sequencing and prioritisation – the advice from Infrastructure NSW on that front is clear. We need to be adaptable to capacity in the market,” he said.

Perrottet said he would be lobbying the new federal government to be strategic in its immigration policies and target skilled migrants who could fill current the labour shortfalls that were contributing to the megaproject delays.

“This is top of the list in terms of what needs to be addressed. The impact of international borders being closed for two years is now having a substantial impact,” he said.

Stokes said the government had to rethink how it planned, costed and announced big infrastructure projects to give the population confidence they amounted to more than political promises.

“When budgets and delivery programmes reflect well-defined scope, design and risk analysis ... we’re giving the public confidence on considered fiscally responsible decision-making and further consigning the concept of pork barrelling to the scrap,” Stokes told the summit.

Opposition transport spokeswoman Jo Haylen said she had reservations about the government’s latest commitment, given they had made 14 announcements about the project over the past five years with no progress.

“Wentworth Point and Western Sydney residents will be understandably sceptical about this reannouncement given the absence of details and the government’s total failure to deliver,” she said.

Western Sydney Leadership Dialogue Chairman Christopher Brown welcomed the second stage of the light rail project.

“This vital link is great news for the long-suffering residents of Wentworth Point and is a prime project to re-boot public private financing of transport,” he said.

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