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Sydney’s much-hyped City and Southwest Metro is to blow out by as much as $3 billion and could cost up to $15.5 billion, the NSW Government concedes.
Transport Minister Andrew Constance has blamed market forces for the blowout, and said the in-demand infrastructure sector had led to increased costs from major contractors.
'The contractors market has shifted and that's put pressure on," he said.
"This is an eight to nine year build, no one predicted the heat in the market and we're sorry that's happened.
"This is a major build for our state, the biggest transport project in the nation's history, and we delivered the first stage of this a billion dollars under budget."
The City and Southwest Metro will link Chatswood with the CBD and Bankstown, and was originally slated to cost between $11.5 billion and $12.5 billion.
The metro is now expected to cost about $15.5 billion but Mr Constance has admitted the final cost will not be known until it opens in 2024.
Opposition Leader Jodi McKay questioned whether market forces are to blame for the cost increase.
"This is due to mismanagement," she said.
"The Government knew about this blowout when it went to the election and it didn't tell the community.
"Those market pressures simply cannot account for a $3 billion blowout."
The Government said it was committed to delivering the City and Southwest Metro, as well as the promised Metro West and Metro Greater West lines.
The Metro Northwest, which opened last May, was $1 billion under budget.
But the revised cost is likely to have serious repercussions for the Government's signature $93 billion infrastructure program.
In December, the Government revised its forecast budget surplus down from $1.016 billion to $700 million.
The bushfire crisis, the prolonged drought and the Coronavirus outbreak are all likely to further impact the projected surplus.
It is likely the State Government will consider privatising more public assets in order to pay for its infrastructure commitments.
But the planned sale of NSW Forestry Corporation was put on ice yesterday when the Government revealed the bushfire crisis had devastated the state's softwood plantations.
The City and Southwest Metro is not the first Government project to blow its budget.
Premier Gladys Berejiklian was forced to defend the controversial rebuild of the Sydney Football Stadium, after it was revealed the cost had blown out by $99 million to a total of $828 million.
And the final bill for Sydney's troubled light rail ballooned to $2.9 billion — $1.3 billion more than the Government had originally budgeted.
This article first appeared on www.abc.net.au
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