Delays, blowouts and stuff-ups: Victoria’s project problem is bigger than Allan

“Over budget, over time, under benefits, over and over again” – it’s a phenomenon that Bent Flyvbjerg, professor at the University of Oxford, describes as the iron law of megaprojects.

It’s as if Flyvbjerg, who has spent years researching how often infrastructure projects are completed on time and on budget, was predicting Melbourne’s future when he conjured up this term a decade ago.

Jacinta Allan at the Metro Tunnel project site in Parkville in April.Credit: Eddie Jim

The West Gate Tunnel – a project dreamt up by CityLink owner Transurban – is years late and more than $4 billion overbudget.

The Metro Tunnel isn’t as tardy – it’s expected within six months of its due date – but the rail project has already blown out from $10.9 billion to at least $14 billion, and the trains are interfering with cancer scanning equipment.

The rail line to Melbourne Airport is on ice for four years and facing a $3 billion shortfall. Meanwhile, the North East Link, Victoria’s largest road project, has blown out by more than $10 billion and is now estimated to cost $26.1 billion.

And the state government has only managed to secure $2.2 billion from Canberra for its Suburban Rail Loop – a 90-kilometre orbital rail loop stretching from Cheltenham to Werribee – with the state spending the past two years dodging requests for more detailed plans.

By comparison, news last week that a new platform at Deer Park is 10 metres too short to accommodate promised nine-car trains seems trivial.

As Flyvbjerg points out, Victoria is not alone in its infrastructure woes. Nor can it be accused of ruling in a state of inertia, as was the case for the Baillieu-Napthine governments before it. That administration’s most memorable achievement was allowing a rogue staffer to plot the demise of chief commissioner Simon Overland.

Perhaps that’s why, for so long, the Andrews and Allan governments have escaped any electoral consequences for overseeing mounting delays and cost blowouts on its infrastructure pipeline.

But with the bills piling up, taxpayers – as the investors – are right to start asking why we aren’t getting any bang for our borrowed bucks (not to mention the mounting debt).

According to Flyvbjerg, the Oxford professor who has dedicated his life to assessing such things, 91.5 per cent of megaprojects don’t deliver on time and budget.

But brighter sparks than I have crunched the numbers and found that delivering major infrastructure projects in Australia is almost always more expensive than comparable projects in other countries (even after you adjust for purchasing power and exchange rates).

The reasons for this include our labour and industrial relations settings (primarily the remit of the federal government), lower productivity rates due to workforce shortages and stricter safety, and environmental rules.

The state government has also blamed “unforeseen global circumstances”, including the COVID-19 pandemic, the war in Ukraine, the rising cost of materials and inflation for some of the recent cost blowouts and delays.

All mitigating factors, but hardly an acceptable excuse for all the unresolved issues with Victoria’s current pipeline of work. Projects no one forced the government to take on.

Take this week’s revelation that trains in Melbourne’s Metro Tunnel will have to run slower near the new Parkville station to limit interference with sensitive cancer and medical scanning equipment.

This was something planners started warning the government about in 2015. A decade on it is still unresolved.

In a similar vein, in 2021 the government announced a plan to run longer nine-car trains on the Melton and Wyndham Vale corridor to boost capacity by up to 50 per cent. The only problem was, no one seems to have told the station designers.

Two years on, Deer Park station was rebuilt, as part of the Level Crossing Removal Project, but they left 10 metres off, meaning they are too short for nine-car trains.

Hardly a problem that can be blamed on Putin’s invasion of the Ukraine or global shortages of steel and cement.

Experts believe many of these costly mistakes aren’t inevitable. And with some simple changes, some of the blowouts and delays could be reined in.

For example, the Grattan Institute suggests state governments ensure all board appointments for mega-projects are limited to experts with a track record of delivering major infrastructure. Even if such a rule wouldn’t bode well for the Suburban Rail Loop Authority Board.

Similarly, the think tank recommends introducing new laws to beef up the powers of the state’s infrastructure body to ensure it has a greater say in approving projects before funds are committed. It also argues that requiring governments to publicly release post-completion reviews for major projects would also ensure we don’t repeat out mistakes.

Until then, the government is taking a punt that once voters are driving on new roads or using new stations (right before the next election) the cost and delays will all be forgiven.

Annika Smethurst is state political editor.

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