Victorian Auditor General report scores state’s delivery of key transport projects ‘a fail’

The Andrews government has a ‘tendency to underestimate costs and over-estimate benefits’ when conceptualising and approving major projects, Victoria’s Auditor-General has found.

Work on the West Gate Tunnel in Melbourne. Picture: Alex Coppel

The Andrews government has a “tendency to underestimate costs and over-estimate benefits” when conceptualising and approving major projects, Victoria’s Auditor-General has found.

In an analysis of publicly available information on projects costed at $100m or more, Auditor-General Andrew Greaves warned on Monday the government’s ten­dency to underquote “can have consequences for Victorians, such as delays in ­obtaining needed infrastructure or increased costs”.

Intended to provide an overview of major projects in Victoria that were reported as new or existing from 2014-15, when Labor came to power, until 2019-20, the dashboard analysis is part of the Auditor-General’s major projects performance audit, due to be tabled in parliament later this year.

It comes as the government’s budget is expected to confirm huge cost blowouts and delays in the delivery of its signature infrastructure projects when it is handed down next month.

Following the postponement of last year’s budget due to the coronavirus, and the Department of Treasury and Finance’s decision to omit Budget Paper Four — which details the state’s capital works program — the May 20 budget will represent the first time the government has publicly disclosed the balance sheets for its key projects in two years.

While the government has confirmed the completion of 46 of its planned 75 level crossing removals, it has not said how much money has been spent to date.

The first 50 level crossings were initially expected to cost $5bn to $6bn to remove, but a 2017 Auditor-General’s report found it had blown out to $8.3bn.

Following the government’s promise to remove an additional 25 level crossings ahead of the 2018 election, the full 75 crossing project was costed at $14.8bn — meaning the last 25 crossings will cost an ­average of $260m per crossing to remove, compared with an average of $166m for the first 50.

The government said in December that the cost of its $11bn Metro Rail tunnel had blown out by $2.74bn, with an agreement reached for the consortium building the project to pay half that cost, and taxpayers the other half.

Amid an ongoing dispute over toxic soil on the West Gate Tunnel road project, the expected completion date has twice been delayed by a year and is now 2024, with Transurban chief executive Scott Charlton earlier this year acknowledging “substantial” cost blowouts but declining to comment on whether they amounted to a speculated figure of $3bn, on top of the $6.7bn already budgeted.

Then there are three massive projects on which construction is yet to begin: the North East Link road project, Melbourne Airport Rail, and the Suburban Rail Loop.

In 2016, Premier Daniel Andrews announced a $10bn price tag for North East Link, but this was revised up to $15.8bn just a year later due to the inclusion of a longer tunnel to minimise disruption to homes.

The Victorian and federal governments have each pledged $5bn for Melbourne Airport Rail, and while a price tag of $50bn for the Suburban Rail Loop was floated at a press conference with Transport Infrastructure Minister Jacinta Allan, the government is yet to ­release an official figure, with experts suggesting the real cost could come in at more than $100bn.

A spokeswoman for the government said the majority of its projects were “on time and on budget, supporting thousands of jobs”, adding: “The budget will publish our full infrastructure program.”

Opposition transport infrastructure spokesman David Davis said the Andrews government had “lost control” of many of its major infrastructure projects.

“They have failed to scope projects properly … instead flying by the seat of their pants,” he said.