The previous Coalition government’s signature metro rail line under Sydney Harbour and the central city risks blowing out to $20.5 billion – almost double the original cost – if expected gains from property sales fail to be realised.
Briefing documents provided to the newly elected Labor government reveal the cost of the problem-plagued Metro City and Southwest line relies heavily on gains from selling the rights to build offices, shops and apartments above new stations along the line.
The latest revelations come nine months after the previous Coalition government admitted that the mostly underground rail line had ballooned by $6 billion to $18.5 billion due to an overheated construction market.
However, the briefing documents, sighted by the Herald, reveal the former government did not reveal that it relied on property sales of $1.6 billion to keep the bill to taxpayers at $18.5 billion. They show that without the gains from property sales, the total cost of the line is estimated to hit $20.5 billion.
While those sales could be achieved, the government accused the Coalition of having “kept hidden” the project’s actual cost.
The original cost of the line between Chatswood and Sydenham via the CBD, and onto Bankstown, was estimated at about $12 billion.
Labor has used its first weeks in office to accuse the former government of presiding over a series of blowouts on its signature infrastructure projects.
Earlier this week new documents showed that the cost of building the Western Harbour Tunnel between Rozelle and North Sydney had blown out by $1.4 billion. It also confirmed previous Herald reports revealing blowouts in the Metro West project.
Transport Minister Jo Haylen has indicated possible changes to the wider metro network, saying she would have “more to say” on the three new rail lines under construction, including the Metro West link between the CBD and Parramatta.
Turning a 13-kilometre stretch of rail line between Sydenham and Bankstown into a metro rail line capable of handling driverless trains has been one of the biggest challenges of the City and Southwest project.
The conversion of the 125-year-old line was originally meant to be completed in 2024, when the main section of the metro project from Chatswood to Sydenham is due to open.
The former government conceded last June that the Bankstown line conversion had been delayed by at least 12 months due to the pandemic, industrial action and wet weather.
However, senior Labor government sources claimed that transport officials had warned the conversion of the Bankstown line could cost up to an extra $1 billion to complete, while flagging further possible delays.
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