Government bracing for $4bn cost blowout in Torrens to Darlington road project
A multibillion-dollar cost blowout is expected for the trouble plagued North-South Corridor project, casting more doubts over exactly how the upgrade will unfold.
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Government ministers are bracing for a huge $4bn cost blowout in the state’s biggest-ever infrastructure project, the 10.5km North-South road corridor between the River Torrens and Darlington.
A project review commissioned by the Labor government shortly after winning the March state election has not yet finished but The Advertiser has been told the $9.9bn forecast cost has swollen to about $14bn.
The Advertiser also has been told a cost-benefit analysis has returned a ratio of less than one – an industry measurement meaning the costs outweigh the benefits of going ahead.
The $14bn total has not been confirmed but it is understood a blowout of that scale is being anticipated by Cabinet ministers and would be considered unsurprising.
The project is not under threat, despite the widely expected blowout, but the review is considering options that would reduce the cost.
Infrastructure and Transport Minister Tom Koutsantonis said “it would not surprise me if the cost exceeds the expected $9.9bn”.
“For many years, South Australians were led to believe this project was locked, loaded and on track for delivery,” he said.
“Upon coming into government, we learnt there was much more work to be done.”
Mr Koutsantonis said the government would do “everything we can” to ensure the project is delivered in a way which ensures value for taxpayers.
He said he had not yet been presented with the final figure but, across Australia, rising construction costs were pushing up the cost of major infrastructure projects.
“This week’s NSW state budget revealed the price tag for the Sydney Metro City and South West blowing out by about $6bn and the first stage of Parramatta light rail by $475m,” he said.
Major infrastructure projects in WA and Victoria have also reported delays and cost blowouts, he said.
Treasurer Stephen Mullighan, in his June 2 post-Budget press conference, declared the government was concerned about “cost escalation” in the North-South Corridor and $1.44bn new Women’s and Children’s Hospital projects, but stressed “we are absolutely committed to delivering this completion of the North-South Corridor”.
The review, by the Department for Transport and Infrastructure, was ordered by Mr Koutsantonis after Labor took government in March.
He has already revealed the project will be delayed — with work to start in 2024 rather than next year and completion pushed back a year to 2031 — after the review identified an “overly optimistic and unrealistic” timeline had been set.
Opposition transport spokesman Vincent Tarzia maintained the previous Liberal government’s project costings had been “spot on”.
“If true, the outrageous blowout cost of this project is a huge hit for taxpayers, motorists, businesses and those who abandoned their homes when maybe they didn’t have to,” he said.
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Originally published as Government bracing for $4bn cost blowout in Torrens to Darlington road project
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