Bailey defends $960 million Cross River Rail cost blowout, delays

Transport Minister Mark Bailey on Saturday morning defended the $960 million cost blowout in the state’s flagship transport project, saying it had no implications for future 2032 Olympic and Paralympic Games projects.

Bailey on Friday afternoon released independent advice that the $5.4 billion Cross River Rail project will now cost $6.3 billion and not be completed until “first quarter 2026”, not 2025 as planned.

Transport Minister Mark Bailey defends the 17.5 per cent - $960 million - increase in Brisbane’s now $6.3 billion underground Cross River Rail in April 2023.Credit: Tony Moore

On Saturday, he said he “did not expect” the 17.5 per cent cost increase to be reflected in future Olympic infrastructure projects, now being overseen by the Queensland Government.

“Hopefully, we will not have another global pandemic in the next 10 years,” Bailey said, after itemising material supply lines, cost increases in steel and concrete and the global pandemic behind the project’s blowout.

He said the federal government was trying to reduce inflation, weather was shifting to drier conditions and supply chains were slowly returning to 2019 times.

“All those factors have had impacts collectively, and I expect that all of those things have either faded, or are fading and that will help us with our construction task going forward.”

Bailey said the independent cost report for Cross River Rail examined costs over the previous three years.

“When we bought down the budget in 2017 for Cross River Rail, nobody anticipated we would have a global pandemic that locked down economies across the world,” he said.

He said supply chains became “very wobbly” over the past three years.

He said there was no contracted compensation for the later delivery of trains under the city’s new underground rail network between new stations at Exhibition Grounds and Boggo Road.

Boggo Road’s Cross River Rail station under construction in February 2023. Train services will now not run until first quarter of 2026.Credit: Tony Moore

“It is only a very slight increase in time, we are talking about three months,” Bailey said.

He compared this with Victoria’s Westgate Tunnel which is now almost three years late, where costs increased from $5 billion to $10 billion.

“Three months versus three years. I think people will understand that this is a pretty minor impact,” he said.

He said the seven-month independent advice – obtained by the Cross River Rail Delivery Authority – did not anticipate further blowouts, but would not release the advice.

“Every mega-project has had a few challenges. Anybody who promises to be on time, on budget, with a complicated project given the events in the past three years is an absolute bullshit artist,” Bailey said.

Bailey said Sydney’s Metro project costs were “50 per cent over, $6 billion over,” and Brisbane City Council’s Metro bus project costs – up from $990 million to $1.7 billion – were “80 per cent over”.

“This project is five to six times the size of that project.”

Rising steel and concrete costs, also hit the Council’s coffers at its new Moggill Road overpass project at Indooroopilly, where costs increased from $126 million to $183 million.

Bailey said no federal government money promised in February for the $2.5 billion Brisbane Arena project would be used for $112 million shortfall for land at Roma Street for Cross River Rail.