Mysterious Price Increase in Metro Tunnel Project Leads to More Taxpayer Funding
The final price tag of Melbourne’s Metro Tunnel remains somewhat of a mystery, even as taxpayers are hit with an extra $837 million (US$576 million) to cover the project.
Transport Infrastructure Minister Danny Pearson disclosed the latest increase in a sudden press conference on Sep. 26, pushing the total cost to $13.48 billion (US$9.28 billion).
Originally estimated at $10.9 billion (US$7.5 billion) when first announced in the 2016 budget, the project has since experienced additional cost escalations.
Pearson admitted uncertainty about whether this latest spike would be the final rise in the tunnel’s cost.
“I cannot guarantee there won’t be unexpected events next year,” he mentioned, alluding to potential cost impacts like those seen during the pandemic.
“What I can say is that we have committed to providing the necessary resources to ensure the project is completed by 2025.”
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Deputy Opposition Leader David Southwick criticized the increased cost as part of a pattern of transportation projects going over budget.
“Every project here in Victoria has exceeded its allocated budget,” he remarked.
“The Labor government is careless with taxpayers’ money, leaving Victorians to question the source of these funds.”
Pearson noted that Victoria is not the only state dealing with budget overruns.
“Since 2021, there has been a 22 percent rise in construction, material, and labor costs, affecting multiple projects across Australia,” he informed the press.
“Sydney’s Metro tunnel saw a $9 billion (US$6.2 billion) budget increase last year.
“Inland rail costs have more than doubled to $30 billion (US$20.65 billion), and Snowy Hydro 2.0 costs have also more than doubled to $12 billion (US$8.26 billion)—confirming that costs are escalating globally.”
The Metro Tunnel will link the busy Sunbury, Cranbourne, and Pakenham lines through a new underground passageway beneath the city.
Construction of five new underground stations at Anzac, Town Hall, State Library, Parkville, and Arden is underway as part of the initiative.
However, technical complications led to the abandonment of a major medical precinct at Arden by the Allan government in May due to potential electromagnetic interference from the Metro Tunnel station disrupting sensitive medical equipment.
The Metro Tunnel project is anticipated to be operational in 2025, pushed back from the original target of September 2024, with the precise opening date still pending confirmation.
In addition to the government’s extra funding announcement on Sep. 26, the Cross Yarra Partnerships consortium involved in the tunnel’s construction will contribute a similar amount.
