Page 2285 - Week 08 - Tuesday, 12 August 2014
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And so on. With regard to the funding, CIE said:
The funding of the Capital Metro has not been made clear, however press reports have emerged suggesting funding may be through a levy on home-owners living within a certain distance of the metro line. While it is prudent that the cost of the metro be borne more by those who obtain a private benefit for it … this presents a risk and source of uncertainty.
These costs are difficult to estimate, and the CIE report makes that point:
… concerns are being expressed in the media about a tendency for costs of light rail programs to exceed expectations. In particular, the ACT government has expressed the difficulty in estimating the cost of the Capital Metro.
Many problems and cost over-runs of major infrastructure projects have been shown to be due in large part to under developed Terms of Reference, inadequate understanding of community expectations and anticipated usage, as well as uncertain or ineffective risk sharing arrangements across governments, head contractors and subcontractors. This makes it difficult to anticipate total costs of a project such as this and any consequent impact for the underlying Budget position.
And they make the point:
The cost of the Capital Metro is subject to a high degree of uncertainty and is a source of risk for the fiscal position of the ACT.
Let me say that again:
The cost of the Capital Metro is subject to a high degree of uncertainty and is a source of risk for the fiscal position of the ACT.
This comes at a time, Madam Deputy Speaker, when the government is over $4 billion in debt, when we see a deficit running at $333 million, and when there is uncertainty in our economic situation.
This government’s track record is not a good one when you talk about the price that they put on a project and then what we actually end up paying. Madam Deputy Speaker, I remind you that, regarding the Cotter Dam, in the lead-up to the 2008 election, I do recall, this government went out and said $120 million, and that blew out to over $400 million.
The GDE—a similar experience—which was going to be $53 million with the original estimates, blew out to over $200 million. Remember the infamous jail? Tens more millions of dollars are being appropriated in this budget for a project that was originally meant to cost $110 million. It blew out to $130 million, then they opened it on the eve of the 2008 election and said, “Right, this is open; it is ready to go.” Minister Corbell said it would be good to go for 25 years. He said that to a committee: “It will be good for 25 years.” And now they are back here with this appropriation bill, saying, “Give us more money.” Is it $54 million?
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