“The full cost of each project will be known once each project is completed,” they said of the Rozelle Interchange and Sydney Gateway,adding that all three were running on time.
The projects form part of the Coalition government’s signature $100 billion dollar infrastructure pipeline,which includes the Sydney Metro,WestConnex and the future Western Harbour Tunnel.
While the projects were lauded as the “silver bullet” to aid the state’s economy during the COVID-19 pandemic,the government is now being warned many will experience even more cost and timeline overruns due to rising prices and a workforce shortage.
Grattan Institute transport and cities program director Marion Terrill said mega projects should be considered a “last resort” by governments,rather than a politically advantageous opportunity.
“A lot of projects are committed to in a premature way … often in the context of an election and they don’t really know if they’re a good solution or a good value for money,” Ms Terrill said.
“But they promise them,and then that’s that,they’re going to deliver them no matter what.”
The cost increases were outlined in the latest NSW Report on State Finances,which was approved by the state’s auditor-general.
It identified a jump in contracted expenditure from $8.2 billion in 2019-20 to $9.6 billion in 2020-21 within Transport for NSW that was yet to be recognised in the state’s financial statements.
The report said the increase was “driven by” the M6 Stage One,Rozelle Interchange and Sydney Gateway projects. However,Transport for NSW said in a statement the figure did not reflect the overall budget position.
NSW Labor treasury spokesman Daniel Mookhey said the government needed to provide clarity on the true cost of its mega road projects.
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“These three road projects are gobbling up public funds at a rate of knots. They seem destined to burn a huge hole in the state’s finances,” Mr Mookhey said.
“There is a real risk of NSW having to plunge even further into debt as the government scrambles to pay for these blowouts.”
Ms Terrill said a scramble by state governments across Australia’s east coast had pushed up prices and stretched the workforce.
“You don’t have a lot of labour to draw on,and then you slam the borders shut. So there’s a workforce issue,” she said.
“In the end,if you’ve got too many projects chasing too little expertise and special equipment and so on,you do just bid up the price.”
Ms Terrill said governments needed to be open to pushing back the delivery of some mega projects to get the best price.
The M6 Stage one is expected to open at the end of 2025,the Rozelle Interchange project is set for completion in late 2023 and Sydney Gateway is expected to open in late 2024.
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