Budget and timetable review of New MetroRail project

12/04/06

The State Government today announced the outcomes of its review of the timetable and budget for the New MetroRail project.

Planning and Infrastructure Minister Alannah MacTiernan said under the new timetable, passenger services were expected to begin on the Southern Suburbs Railway in July 2007.

"The revised timetable is based on the latest information from the contractors and advice from the Government's project team," Ms MacTiernan said.

"The city tunnel end of the project is still behind schedule and it is unlikely that the Leighton-Kumagai Joint Venture partners will be able to finish before April 2007.

"The extra time needed to complete the second tunnel will delay the date at which train services can begin."

The Minister said the New MetroRail project team had achieved some savings in time by reviewing the train commissioning process.

They had also been working with the relevant contractors to minimise unnecessary delays in the interface of the city and rail contract packages.

"The July timetable is still well ahead of the original target of December 2007 which the Government set in 2002, when it announced the final route," Ms MacTiernan said.

The 2006 timetable was set at the suggestion of the contractors when tenders were awarded.

The Minister said the Government would also increase the contingency sum in the budget by $49.801 million - lifting the total cost of the project to $1,613 billion.

"This represents a three per cent increase in the budget - a relatively modest amount in the current heated construction climate," she said.

Ms MacTiernan said the work of the New MetroRail project team to keep a tight rein on the budget could be appreciated when considering what was happening elsewhere in the construction industry.

"The decision to set aside this additional amount in contingencies is based on expert technical and legal advice," she said.

The review took account of the extent to which the existing contingencies had been committed for contract variations and claims agreed so far, and the likelihood of future variations and valid claims affecting the final project cost.

"The amount provided for the additional contingency is consistent with the advice we have received that the project will not ultimately be liable to pay the majority of the claims that have been recently, and very publicly, lodged against it," the Minister said.

Ms MacTiernan said that in looking after the interests of taxpayers, the State would not pay claims where there was no contractual entitlement to such money.

"We are not changing the risk allocation that was agreed to when the contracts were signed. That would not be fair to taxpayers or to the unsuccessful bidders," she said.

The Minister reiterated that decisions about the project budget and timing have to be made based on the best information available at the time.

"Given the project is now about 65 per cent complete, the likelihood of further changes to the timetable and budget are less likely," she said.

"Significant milestones have been achieved, including the first stage of tunnelling, the start of track-laying and the completion of major bridge work."

A further review of the budget and timetable will be carried out ahead of the mid-year Budget review and again in next year's Budget.