Cost blowouts to force government to make hard decisions on mega projects

A big advantage for the NSW government in building an underground metro rail line beneath Sydney Harbour and the central city was that the project has largely been out of public sight and mind.

The City and Southwest Metro rail line has avoided a community backlash that dogged theCBD light rail line andWestConnex motorway that was caused by,in part,the disruption from construction. Many people have been unaware of the scale and complexity of a mega transport project which has literally been taking place tens of metres below their feet in the CBD for years.

That freedom from close scrutiny is about to end for the government’s flagship rail project.

The City and Southwest rail project risks becoming a financial and political headache for the Perrottet government.

The City and Southwest rail project risks becoming a financial and political headache for the Perrottet government.Ben Rushton

The opening date for the new rail line from Chatswood,under Sydney Harbour and the CBD,and onto Sydenham and Bankstown is just over two years away. That fast-approaching deadline for completion comes as the extent to which the project is running billions of dollars over budget comes into sharper focus.

With the cost of the City and Southwest line and other mega transportprojects surging,the government will soon be forced to make some hard decisions. Firstly,it will have to level with the public about the true cost of these projects. Secondly,it will have to consider delaying construction of some or,at worst,canning the least viable.

The multibillion-dollar Northern Beaches Link road project is regularly cited as the most likely to be delayed or canned,while the need to open an $11 billion metro rail line to the new airport at Badgerys Creek in western Sydney the day that the first passengers begin walking off planes in 2026 is highly questionable. Last year,the country’s peak independent adviser on infrastructure savaged the justification for the airport rail line,calculating that the cost outweighed its benefits by $1.8 billion.

It is clear from recent messaging that the NSW government is laying the groundwork for some uncomfortable decisions.

Premier Dominic Perrottet warned last month that there was “no doubt” that there had been an escalation inconstruction costs for transport projects. Transport Minister David Elliott,who has refused to commit to building thesecond stage of the Parramatta light rail line,put it more bluntly when he said that “not since the building of the Great Pyramids of Giza has a construction contract gone without a variation”.

That could not be truer than for the City and Southwest rail line,which risks becoming a major political and financial headache for the government as the next state election looms on the horizon.

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Matt O'Sullivan is Transport and Infrastructure Editor at The Sydney Morning Herald.

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