A further $180 million of cost overruns have been notched up across two Metronet railway contracts.
About $180 million of cost overruns have been notched up across two Metronet railway contracts.
The biggest was an increase of $101 million for the NEWest Alliance’s deal to build both the Yanchep Railway Extension and the Thornlie to Cockburn Link.
Both projects were awarded under the same delivery contract in 2019, with a price tag of $954 million.
NEWest is led by CPB Contractors and Downer EDI.
But more than 60 contract variations in the 12 months to mid-December have pushed up the contract’s cost, according to publicly available tender data.
The contract, now expected to expire in 2026, will cost north of $1 billion.
The long-proposed Morley-Ellenbrook Line has also been hit by variations, adding $81 million for 12 changes agreed in the year to October.
The builder for that project is the MELconnx Consortium, headed by Laing O'Rourke.
The contract initially had a price tag of $753 million when it was awarded in October 2020.
A spokesperson for Metronet said the rising contract costs were within the project's overall budgets.
“All variations to the Morley-Ellenbrook Line and Thornlie-Cockburn Link/Yanchep Rail Extension contracts have been for adjustments to works through the normal course of the project life cycle,” the spokesperson for Metronet said.
“Due to the commercial-in-confidence nature of these contracts, the specifics of these cannot be disclosed.
“All contract variations have been funded from within the approved budget for each project, as outlined in the 2022-23 Budget Paper No.2 (page 633).”
Both price escalations are just the latest in a series which have hit the state government’s Metronet suite of rail developments in a construction market which has been white hot.In the May budget, the state government’s bill across 18 Metronet projects was to be $9.1 billion, including $6 billion to be spent over four years alone.
The total cost of the Yanchep line was forecast to be $607 million, while the Thornlie to Cockburn connection was expected to be $880 million.
Those figures would include other costs not covered in NEWest’s contract.
Level crossing removals on the Armadale Rail line were forecast to cost $415 million in 2020, but more recent estimates are close to $1.1 billion thanks in part to a decision to elevate the tracks.
Read more in the 16 January 2023 edition of the Business News magazine.
