The cost of Adelaide's long-delayed city tram extension could come in well over budget, according to Infrastructure Minister Stephan Knoll, but it's not clear how much of the bill taxpayers will foot.

But he conceded taxpayers might not actually have to foot any of the additional bill, as the State Government enters negotiations with the construction company responsible for the project.

The one-kilometre tram extension promised by the former Labor government was due to open in March at a cost of $90 million.

But the project has been plagued with signalling issues and delays during testing.

The new Liberal Government has not been willing to set an opening date.

Mr Knoll, who inherited the tram extension project, said his department had now advised him taxpayers could face additional costs of up to $44 million.

"When Labor buried the signalling systems underground, they buried up to $44 million worth of taxpayers' money underground with it," he said.

"The department is still currently working to minimise that cost to taxpayers and to try and make sure that the claims process protects taxpayers in every way possible.

"But this is another Labor mess that this new Marshall Liberal Government has had to clean up."

PHOTO: One of the first trams testing out new tracks on North Terrace in June. (ABC Radio Adelaide: Spence Denny)

The tram works — including new stops outside the Festival Centre, Gawler Place, the University of Adelaide and the old Royal Adelaide Hospital site — were completed by a joint venture of Downer EDI works and South Australian company York Civil.
York Civil went into liquidation in August, leaving its joint-venture partner to complete the project.

The tram contract required subcontractors to fix defects at their own expense.

Mr Knoll said the Government was now working through a claims and variations process with the contractor, but that $44 million was the "upper limit" of claims to which the taxpayer could be exposed.

"We're talking here about spending now potentially up to $124 million to lay one kilometre of track. I don't think that any South Australian thinks that's a good use of money," he said.

Opposition Infrastructure spokesman Tom Koutsantonis said Mr Knoll had released the figure to deflect from other problems in his portfolio.

"All we're getting from the Minister is excuses," he said.

"Quite frankly, if he has a report saying that something went wrong under Labor, release it."

YOUTUBE: A timelapse video of work to install tram tracks at the intersection of North Terrace and King William Street.

Tram opening date 'extremely close'The Minister said the tram extension had now been tested at full-service capacity and that the testing had progressed "extremely well", but he would not put a date on when passengers would be able to ride a tram to the east end of the city.

"We are extremely close to having a start date for the trams," Mr Knoll said.

"We're working through the final kinks and we want to make sure we protect taxpayers, that we get the tramline that South Australians are now paying an exorbitant amount for."

The Minister had previously announced a "set in stone" opening date of July 29, but was forced to backtrack when more problems emerged.