Delay to derail $12.8b cost of Metro Tunnel: auditor

Callum Godde | June 20, 2024

Victorian taxpayers will have to fork out more cash to finish Melbourne’s long-awaited metro rail tunnel, the state’s auditor says.

In a report tabled in state parliament on Thursday, Victorian Auditor-General Andrew Greaves revealed there is insufficient contingency funding remaining to finish the mega project.

It will mean the Metro Tunnel costs the state more than its current budget, he said.

The tunnel was originally costed at $10.9 billion when announced in 2016 but has blown out to $12.8 billion.

“Rail Projects Victoria’s February 2024 forecast still shows the project’s total cost will be $12.8 billion, which matches the current (total estimated investment),” the Victorian Auditor-General’s Office report said.

“But in March 2024 RPV confirmed the project will not meet its contracted completion date, which will add costs.

“RPV told us it will update its forecast after negotiating additional costs with the contractors based on its revised internal project schedule.”

The Metro Tunnel will connect the busy Sunbury, Cranbourne and Pakenham lines through a new tunnel under the city.

The project had been contracted to be completed by September 2024 but RPV’s revised internal project schedule shows it will now finished in June 2025, a nine-month delay.

Department of Transport and Planning secretary Paul Younis said the department and Victorian Health Building Authority did not agree the project had been delayed.

“In 2018, the government approved a completion date for the project of end 2025, which was a year ahead of the original 2026 completion date envisaged by the Metro Tunnel project business case,” he said.

“While delivery program and milestones have shifted throughout the course of the project, the project is on track to being operational by the end of 2025, in line with the government’s commitment.”