Melbourne’s metro tunnel project runs out of reserves


Victorian taxpayers may have to bear the additional cost of the Melbourne metro tunnel as the project has almost exhausted its risk contingent funds.

Victorian Audit Directorate Report The project was expected to spend $ 364 million ($ 252 million) on tunnels and stations, he said.

We also found that the Victoria State Government sought to offset overspending by reducing the scope of some project components and redistributing funds internally.

The project is about three years from its completion date in 2025, but Rail Projects Victoria (RPV), the government agency responsible for managing the state’s major rail projects, has set a $ 740 million risk reserve for tunnels. Spent or allocated 98% of. It cites “a series of unplanned costs and unexpected risk events.”

The audit noted that the lack of additional reserves poses significant budget risk to the RPV, given the complexity and risky work involved.

In addition, according to an audit, RPV will need additional funding to provide the Victoria State Government with the full scope of the project in May and to settle potential reserves in the two fiscal years after 2023. Said. Funds.

Due to a cost overrun, the Victoria State Government agreed to the recommendation to review the project budget and determine additional funding that may be needed.

Project scope variation

Epoch Times Photo
Overview of the metro tunnel under construction in Melbourne, Australia on June 28, 2021. (Asanka Ratnayake / Getty Images)

Meanwhile, audits revealed that 33 range variations occurred during the major construction stages of the metro tunnel, with state costs of $ 55.83 million.

One of the changes was to reduce the 27 km high capacity signaling system (one-third of the initial coverage) to reallocate $ 91 million to other areas.

In another example, the Victoria State Government has approved reducing the scope of some “wider network expansions” to free $ 236 million for various overused areas.

The estimated cost of the tunnel is $ 12.36 billion, but it does not include the additional operating cost of $ 182 million and the COVID-19 claim of $ 41 million.

Victorian Transport Infrastructure Minister Jacinta Alan said the state was affected by COVID-related labor problems and supply chain disruptions.

“This is a project that faces some cost challenges,” she said.

“We can’t just put COVID aside. This is what we are facing, and New South Wales reported on these issues yesterday.”

Meanwhile, opposition transportation infrastructure spokesman Matt Bach allegedly said that the Minister of Transportation Infrastructure had deceived Victoria’s residents by shifting responsibility for overspending the project.

“Workers have repeatedly shown that they can’t manage major projects and are bankrupting our state,” he said.

Aside from financial issues, audits said the tunnel project could damage medical and scientific equipment near two stations at the station due to electromagnetic interference caused by trains.

The Victorian Department of Transport and Rail Projects Victoria has agreed to implement a risk mitigation plan before train testing begins in June 2023.

Construction of the metro tunnel is expected to be completed by 2025, one year earlier than planned.

Alfred buoy


Alfred Bui is a Melbourne-based Australian reporter with a focus on local and business news. He is a former small business owner and holds two master’s degrees in business and business law. Contact him at [email protected].