Warning that Sydney’s biggest rail project risks costing $27b and opening late

The NSW government was warned last year that the cost of building its flagship rail line between central Sydney and Parramatta risked ballooning to almost $27 billion – nearly $3 billion more than earlier internal estimates – and opening three years late.

The forecast for Metro West was made about eight months ago, before the government committed to an extra station at Pyrmont, which will add hundreds of millions to the final cost of Australia’s largest transport project.

The Metro West rail line will run underground from central Sydney to Westmead.Credit: Nick Moir

Confidential documents which contain modelling by Sydney Metro reveal for the first time the estimated cost of the project and that the government has been scrambling to find ways to reduce costs.

Sydney Metro, which is delivering the project, estimated the underground rail line would open to passengers in early 2033, three years later than the government has said publicly.

The documents show NSW Treasury has put pressure on Sydney Metro to rein in costs. Early last year, a cash restraint was imposed on the project as Sydney Metro revised the delivery strategy for the rail line, including the cost which it estimated at the time at $26.6 billion. The documents state that this was an increase of nearly $3 billion.

Unlike other new rail lines, the government has not released an expected cost for Metro West, which is the third stage of a metro rail network.

The documents show the estimated cost of underground stations alone for Metro West range from about $640 million for the CBD and $600 million for North Strathfield, to about $390 million for the Bays Precinct at Rozelle and $350 million for Five Dock. The figures include so-called escalation costs.

Transport Minister Andrew Constance said the government would not have the final price for Metro West until the last contract was signed.

“I am not going to comment about an internal working document of the Department which does not reflect a final decision. There are multiple contracts to be signed and any number is speculative in nature until we get that final contract price,” he said.

“This project will be built in 10 years, not 15, and we’ve already started building it.”

Transport Minister Andrew Constance says he will not have a final cost until the last contract for Metro West is signed.Credit: Wolter Peeters

Despite the internal modelling last year, the government said the timeframe for Metro West to open by 2030 had not changed, adding that “agencies are constantly optimising delivery schedules for major projects such as this one”.

But Labor leader Jodi McKay said it was not a surprise that Metro West was running late and massively over budget given the cost blowouts in the government’s other transport projects.

“At the last election, Andrew Constance committed to fast-tracking its delivery. Instead, this government has let it fall another three years behind,” she said.

The Herald revealed last year that the estimated cost of the City and Southwest metro rail project under Sydney Harbour and the central city had blown out by more than $4 billion to $16.8 billion. It followed a doubling in the cost of the Sydney light rail line to more than $3.1 billion.

The Metro West documents show the cost of building the underground line will be significantly greater on a per kilometres basis than the City and Southwest project, and the Northwest rail line from Rouse Hill to Chatswood which opened in 2019.

The bigger bill for Metro West is blamed on factors such as the higher cost of acquiring land along Sydney’s east-west spine and the central city, which will run into billions of dollars.

The documents also show the government intended to build a station at Zetland, south of the CBD, as part of a 30-kilometre line stretching to Westmead.

But Zetland was dropped from the Metro West project by 2019, and the rail line shortened to about 24 kilometres. The last stop at the eastern end will be a station under Hunter Street in Sydney’s CBD, which will require an underground turn-back for trains to be built.

A spokesperson for Mr Constance declined to say why Zetland would not form part of Metro West, but said the initial focus was on relieving pressure on trains to western Sydney.

Plans for a second station in the CBD – most likely near the existing Central railway station – were also dropped by 2019, the documents show.

A spokesman for Sydney Metro said the delivery strategy for the rail line was designed to get the best outcome for NSW taxpayers, and mega projects around the world faced challenges like the supply of raw materials, which were dealt with in project budgets.

A Treasury spokesman said the government was committed to funding Metro West.

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