Cost blowout risk hangs over Sydney’s largest metro rail project

Sydney’s Metro West train line is at risk of costing more than its $25.3 billion budget as mega-rail projects across the city face construction pressures, analysis provided to the state government shows.

Under questioning at a parliamentary hearing, Sydney Metro chief executive Peter Regan confirmed that analysis showed the rail line between the Sydney CBD and Parramatta risks costing more than $25.3 billion.

“I’m aware that there is, of course, a range of outcomes on the project, some of which are above and some of which are below the budget,” he said in response to questions from the Coalition at budget estimates.

A tunnel-boring machine on the Metro West underground line between Sydney CBD and Parramatta.Credit: Nick Moir

However, Regan said Metro West was still tracking within its $25.3 billion budget, as was the new metro line to Western Sydney Airport, which was budgeted to cost $11 billion.

“With all of our projects, we look at a full range of outcomes around the likely out-turn [actual] cost of the project. We are still working to the same budget of $25.3 billion [for Metro West],” he said.

Forming the fourth stage of Sydney’s metro network, the 24-kilometre line is the largest rail project in the city and due to be completed by 2032, which is two years later than earlier forecasts.

The final configuration of the line will hinge on a vote on April 3 by Australian Turf Club members on controversial plans to sell Rosehill Racecourse to create 25,000 new homes and an extra metro station.

The risk of a cost overrun on Metro West comes as the completion of a metro rail extension between Sydenham and Bankstown has been delayed, while the 23-kilometre line to Western Sydney Airport is set to open in mid-2027, up to six months later than planned.

Quizzed by the Greens about the airport line, Transport Minister John Graham said the project was under time pressure and “there may well be a delay”, while confirming that the government was “routinely updated about risks”.

Regan said the airport line project had faced a “series of challenges” including industrial action and supply chain problems, which could affect the final completion date.

Tunnels at Clyde, near Parramatta, for the Metro West rail project. Credit: Nick Moir

“We’re working through with the consortium [which is delivering final contracts for the project] whether that date for final completion remains the appropriate one,” he said.

“The program for that project was very tight from the start, and when that contract was originally signed at the back end of 2022 it was done at a time when there were very significant supply chain pressures.”

In a sign of the cost and construction pressures on the rail projects, the government committed an extra $1.1 billion in late 2023 to complete the conversion of the heavy rail line between Sydenham and Bankstown to metro train standards.

It pushed the price tag for the entire M1 line between Chatswood and Bankstown to $21.6 billion, almost double an original forecast of $12 billion when the project was announced last decade.

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