“Due to the Commonwealth government’s infrastructure investment program strategic review,a further variation of $67 million was approved in November 2023 for Gateway Alliance to conduct demobilisation works pending the outcome of negotiations with Australia Pacific Airports (Melbourne). The works under this contract are expected to be completed by December 2024.”
The state government did not clarify when asked whether “demobilise” meant packing up the site or standing staff down.
“We’ve been in negotiations with the Airport over this project for several years. As we have previously said,these negotiations have been frustrating and have caused delays,” a state government spokesman said.
“The Commonwealth — who own the land the airport sits on — have previously stated they will appoint an independent negotiator to resolve issues with Melbourne Airport.”
Melbourne Airport Rail staff have been redeployed.
Both the state and federal governments have each committed $5 billion towards the Airport Rail link and the Commonwealth recommitted to its funding when it publicly released the infrastructure review on November 16. It has been estimated to cost $13 billion,but neither side has agreed on who will pay if the $10 billion budget is exceeded.
A spokesman for Melbourne Airport said its work ground to a halt on April 30 last year on advice from the state government.
“Melbourne Airport remains ready and willing to discuss the delivery of airport rail and is currently awaiting the appointment of a mediator,” he said.
The airport has also pushed for financial compensation if the station on their land is built above ground. The disagreement over the station and the compensation has ground progress to a halt.
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The financial update released on Friday also showed the expansion to the Thomas Embling Hospital,expected to cost $462.5 million,had also blown out by $334 million and was now delayed by at least six months. The extra beds were a recommendation of the royal commission into Victoria’s mental health system.
The state opposition’s shadow treasurer Brad Rowswell said the figures proved “Labor can’t manage money and Victorians are paying the price”.
“The ongoing mismanagement of major projects is adding to Victoria’s record debt,forcing higher taxes and pushing up prices at a time Victorians can least afford it,” Rowswell said.
Net debt increased by $11.7 billion in the six months between the end of June and December to $126.8 billion. In that period,the state government invested $12 billion in infrastructure alone.
Interest expenses for the entire state of Victoria’s finances,which includes all agencies and financial entities,were forecast to be $6.6 billion in 2023-24,$378 million more than predicted in the May budget.
Victoria’s upcoming May budget is already under strain.The Age this week revealed that eight level crossings that Labor promised to remove by 2027 at the 2022 state election would be delayed.
The Allan government trumpeted the mid-year financial report as showing a strong labour market and growing economy in Victoria. An extra 124,000 Victorians were in work in the 12 months to December 2023,according to the update.
“This year’s budget will continue to deliver the promises we made at the last election and protect the jobs and services that Victorian families rely on,” Treasurer Tim Pallas said in a statement on Friday.
King’s office was contacted on Friday.