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The NSW Auditor-General has criticised the government's handling of the CBD Light Rail.Credit:Louise Kennerley

It also found Transport for NSW failed to regularly provide financial reports to a project control group set up to specifically monitor the cost compared to funding allocation.

The project has been highly embarrassing for the Berejiklian government due to cost blowouts,lengthy delays to construction,legal battles and prolonged disruption to businesses and residents along the route from the CBD to Sydney's south-east.

The government in November said the cost of the 12 kilometre line had risen to at least $2.9 billion.

But in her latest report the Auditor-General found the government omitted $36 million in pre-contract award costs,$60 million in small business assistance and almost $60 million in additional financing.

“Transport for NSW has not consistently and accurately updated[light rail] project costs,limiting the transparency of reporting to the public,” Auditor-General Margaret Crawford said in her report.

The report also found the government failed to update public information about the true cost for several months in 2019,stating light rail cost $2.1 billion when a revised budget had already confirmed the figure was close to $2.8 billion at the time.

And even when the government updated the public on the increased cost in November,it omitted other associated costs,the report found.

A crucial factor underpinning the cost-benefit analysis rested on savings recouped by the government through reduced bus service costs.

But while the government in 2013 predicted the light rail would save close to $50 million per year through reductions to bus services,by 2019 that estimate had dropped to the “significantly lower” figure of $8 million.

Commuters try the light rail for the first time from Randwick to Circular Quay in Sydney in December 2019.Credit:Dominic Lorrimer

Transport for NSW chief operations officer Howard Collins said the government believed it had complied with all guidelines,and contested the Auditor-General's overall costing.

“We still believe it is under that $3 billion mark and some of those costs that the Auditor-General has raised actually is outside the context of the project,"he said.

Opposition transport spokesman Chris Minns said TfNSW and the Berejiklian government could not be trusted when it came to the cost of the project.

“Who are you going to believe? The guys that delivered you a $1.6 billion light rail for $3.1 billion or the Auditor-General?” Mr Minns said.

The Auditor-General recommended TfNSW publicly report the final project cost,as well as average weekly journey times by the end of this month.

The report also said while a project benefit plan required 97 per cent of journey times to be between 38 and 39 minutes,by early March 97 per cent of trips were around 51 minutes.

However,recent scheduling of the light rail suggests the trip is now closer to 38 minutes.

In November 2016 the Auditor-General published a performance audit warning the government would deliver the light rail at a “higher cost with lower benefits” than the approved business case.

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