*NSW election: Sydney light rail costs hit $3bn in new deal*
The total cost of the Sydney Light Rail project would increase from $2.1 billion to more than $3bn under a proposed deal negotiated by the NSW Transport Department with contractor Acciona.
Under the negotiated but still pending deal, aimed at ending the court action which has helped cripple the project, civil construction contractor Acciona would be required to finish the light rail track from the city to the southeastern suburbs of Kingsford and Randwick by the end of this year.
/The Australian/ has confirmed that Transport for NSW bosses and Acciona have sat down and negotiated the settlement but the deal will have to wait until a government is elected on Saturday before it can be put and ratified.
It cannot be ratified until it goes through the expenditure review committee of cabinet, which cannot occur during the caretaker period before the election.
One government source said the deal was contingent on the Spanish contractor being able to demonstrate what progress it had made by the time a government was elected, to prove that Acciona could meet the end-of-year deadline.
“If we have the view they can’t do that, then the whole deal’s going to fall over,” the source said.
But if Transport for NSW decided not to proceed with the deal, the government would be faced with going through with court action: Acciona is suing the government, which could lead to further delays and cost blowouts.
The project, which will be finished more than a year late, has rendered the CBD a construction zone for years. It was originally supposed to be finished before the election and its cost was originally put by Premier Gladys Berejiklian, when she was transport minister in the O’Farrell government, at $1.6bn.
Just before the 2015 election, Ms Berejiklian said the project cost was being scaled up to $2.1bn, saying this was because of “huge wins” in the design of the project, but the Auditor-General later found “errors” and “mispricings” had led to the blowout.
In April last year /The Australian /broke the news that Acciona was suing the government for $1.2bn, with the company alleging it was misled by the government over the cost of ripping up Ausgrid electricity wires under George Street and replacing them.
Transport Minister Andrew Constance wrote to the company at the time saying the government was an “angry customer”.
“I was … shocked and dismayed to be informed that Acciona … has threatened legal proceedings against Transport for NSW, based on allegations Transport for NSW made misrepresentations to Acciona about the utilities in the lead-up to the signing of the contracts in December 2014,” Mr Constance wrote.
“We have always said this is a complex project and both Acciona and ALTRAC (the consortium in charge) knew this when they signed up.”
The matter has since gone to court but the company and the government have been in talks about a settlement.
Acciona has accused the government in court of “misleading or deceptive conduct”.
Ms Berejiklian’s office said yesterday: “Any assertion the NSW government has reached an agreement with Acciona is not true.”
The news comes after Ms Berejiklian announced this week that the $8.3bn North West Metro project was set to come in $1bn under budget and would be opened in May.
https://www.theaustralian.com.au/national-affairs/state-politics/nsw-election-sydney-light-rail-costs-hit-3bn-in-new-deal/news-story/b0c254c6b0477e9dc92fe12726ecca54