Cost of cancelling rail line would include billions in compensation

In addition, they would typically be entitled to the cost of removing temporary works – such as tunnel boring machines in the case of Metro West – and other expenses reasonably incurred before a project was cancelled.

Locke also warned delaying the project would only lead to an increase in the project’s cost, a point echoed by the peak body for contractors.

A giant shed at the site for a Metro West station at Burwood.

A giant shed at the site for a Metro West station at Burwood.Credit: Louise Kennerley

Australian Constructors Association chief executive Jon Davies warned any canning of the Metro West project would “absolutely undermine” confidence in the construction sector.

“There is no better time to deliver this but now. It is not going to get cheaper if they wait longer,” he said.

Sydney Metro declined to reveal the cost of terminating contracts for the project, citing commercial confidentiality. A spokesperson for the agency said three tunnelling contracts had been signed at a total value of $5.75 billion, while more than $3 billion had been spent to date on property acquisitions.

The Labor government has indicated that the completion of the metro rail line will be delayed beyond a planned 2030 opening, while early agency briefings it received after it won the March election put the estimated cost of the project at $25.32 billion.

However, internal Sydney Metro documents completed in mid-2020 – before construction costs skyrocketed during the pandemic – warned that the bill risked ballooning to almost $27 billion. The documents, which were obtained by the Herald, also show Sydney Metro considered an opening date for the line as late as 2034 due to a funding crunch.

Other internal documents have also estimated Metro West will churn through up to $5 million a day.

Transport Minister Jo Haylen pulled out of speaking at a business function on Thursday to attend a cabinet meeting.


The doubts cast on Metro West come as multiple federal and state reviews into planned infrastructure, as well as delays to the completion of projects.

In NSW, the multibillion-dollar Beaches Link motorway has been put on hold indefinitely while the second stage of the Parramatta light rail line is running about five years later than planned. The Victorian government also recently delayed by up to four years construction of a rail link to Melbourne Airport.

Infrastructure Partnerships Australia chief executive Adrian Dwyer said suggestions of contracts not proceeding, delays and potential reductions in the country’s infrastructure pipeline was creating caution and uncertainty in the sector.

“Over the next 20 years or 30 years Sydney will go from a big-small city to a big city and big cities need turn-up-and-go metro services,” he said. “That needs to be delivered to support that population.”

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Justin Scaccy

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