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The Metro Tunnel's builders warned the Andrews government that design changes worth close to a billion dollars at two CBD stations were driving a massive cost blowout to the flagship project.
Confidential government reports leaked to The Age reveal the government pushed back on initial claims made by the constructors – the Cross Yarra Partnership Consortium (CYP) – dismissing the proposed $3.3 billion in extra costs as “overly conservative” and possibly inflated and labelling a projected delay of as much as 18 months “materially overstated”.
Premier Daniel Andrews underground at the State Library station last week.CREDIT:JASON SOUTH
However the secret documents from October last year reveal the government was at that time estimating a six to eight month delay on the $11 billion project. Premier Daniel Andrews and Transport Infrastructure Minister Jacinta Allan have consistently said the project would be built on time, by the end of 2025.
In December last year the dispute between the builders and the government culminated in the consortium switching off the project’s tunnel-boring machines in a public demand for more cash.
Despite initially refusing to bow to the demands for extra money, the state government agreed in June to chip in more than $1 billion under an in-principle agreement struck with the consortium, made up of Lendlease Melbourne Metro, John Holland, Bouygues Construction, John Laing and Capella Capital.
The government has not confirmed the current cost of the project.
An internal review of CYP’s cost forecast by Rail Projects Victoria (RPV) – the state agency overseeing the Metro Tunnel – provides a rare insight into the dispute between the government and the builders.
The documents from October 2019 confirm that CYP was claiming a $3.3 billion blowout and more than a year’s delay – which was roundly rejected by the government – and reveal the key drivers of the project's cost overruns; namely, design changes at State Library station and rising labour costs.
The consortium forecast that the cost of building the station would rise from an initial $480 million to $915 million.
Design changes including height increases in the main station cavern, relocation of passenger lifts, an escalator and fire and station control rooms all drove up costs, along with CYP's decision to redesign the strutting system for the station's access shafts.
This article first appeared on www.theage.com.au
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