Allan Labor government found to be lacking transparency as $11.66bn major projects blowout revealed

Victoria’s Auditor-General has called out the Allan Labor government over a lack of transparency surrounding its major infrastructure projects, which have blown out in cost by $11.66bn in the past year.

Major Victorian projects have blown out in cost by $11.66b in the past year. Picture: NewsWire/Valeriu Campan

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Victoria’s Auditor-General has called out the Allan Labor government over a lack of transparency surrounding its major infrastructure projects, which have blown out in cost by $11.66bn in the past year.

The state – which is on track to reach net debt of $187.3bn by mid-2028 – now has a total estimated bill of $145.5bn for its major projects, up 8.7 per cent from last year, a report released by the Victorian Auditor-General’s Office on Wednesday revealed.

The scathing report, which examined 113 of the state’s major projects worth $100m or more, concluded that the government was failing to provide transparent reporting on its projects’ performance to the community who funded them, and that the public reporting it did provide was “not meaningful, reliable or comprehensive”.

Victorian Transport Infrastructure Minister Gabrielle Williams slammed the report and disputed the $11.66b cost blowout figure. Picture: Jason Edwards

“It does not allow the community to understand major projects’ performance against expected cost, time, scope and benefits or the impact of any changes,” the report read.

“The public entities in scope do not consistently and transparently report major projects’ performance information in a way that is useful to the parliament or the general public.”

VAGO found that while internal government analysis of project performance was often high-quality and meaningful, the government did not make such information available to the public.

It also found the government was failing to assess the impacts of significant changes on the original cost, time, scope and benefits of projects, and that its project benefits measurement systems were “not mature” and had “unclear roles and responsibilities”. “Entities do not specifically consider the impact of major changes to cost, time and scope on expected project benefits and economic viability,” the report read.

“This means parliament and the community have no way of knowing whether a project’s estimated economic benefit-cost ratio (BCR) or any other project benefits measurement tool used is still valid after a major change.”

Following the report’s release, Victorian Transport Infrastructure Minister Gabrielle Williams raised “serious concerns” about its validity and disputed the $11.66bn cost blowout figure. “Quite frankly, the way that this has been calculated is wrong,” Ms Williams said.

“Included within that figure is increases to project scope across a number of different projects.

“There is a very clear distinction between cost escalations and scope changes that is not represented in this report.”

However Ms Williams – who claimed VAGO’s report was “misleading and out of date” – was unable to say what the government contended the correct cost escalation figure was.

The VAGO report also revealed the government was in the process of negotiating a “pricing reset” with a contractor over $2.5bn worth of early works in its controversial Suburban Rail Loop project.

The new price is needed to factor in items that were unknown at the time the contract was awarded, including “unknown ground conditions and hazards and contamination at some sites, such as properties that were not comprehensively inspected due to access restrictions”.

The VAGO report questioned the government’s approach to measuring the benefits of the Suburban Rail Loop, which the government has priced at $34.5bn for the first stage alone.

“While the Suburban Rail Loop’s business and investment case outlined many medium to long-term benefits, there is no obvious benefits measurement approach in place,” the report stated.

It also pointed to a risk that the early works package, which has been delayed by nine months, could hold up the main works.

Asked about the concerns identified in VAGO’s report, Ms Williams said the first stage of the Suburban Rail Loop remained on time and on budget.

“Usually in the process of early works, certain aspects of scheduling are rearranged,” she said.

“That hasn’t, in this case, changed the completion date.”

Victorian Opposition Leader Brad Battin said VAGO’s report showed the government was “more about secrecy than reality”.

“You can’t continue to have a government that hides every detail from the community, effectively lying to them about what they’re building and how much it’s costing,” Mr Battin said.

“Victorians deserve to know the truth.”

Mr Battin also slammed Ms Williams’ rebuke of Victoria’s Auditor-General.

“How can you continually call out the independent agency that is there to ensure that you are kept to account?”