Rail project costs blow out by $6b amid contractor disputes and design changes

The cost of Sydney’s three metro rail projects has blown out by more than $6 billion due to disputes with contractors, skyrocketing construction expenses and design and scope changes, which the Minns government has attempted to blame on its Coalition predecessors.

As foreshadowed by the Herald, the Minns government has confirmed that its signature rail project, Metro West, is now estimated to cost between $27 and $29 billion to complete by its targeted opening date of 2032. The 24-kilometre line will extend from the Sydney CBD to Westmead.

The government also confirmed reports by this masthead that legal claims made by the private consortium building the metro line to Western Sydney Airport might raise the project’s total price tag by more than $1 billion to more than $12 billion.

The project is already set to open 12 months late in December 2027, a year after the first flights are expected to take off from the new international airport.

Compounding the financial woes, the cost of completing the troubled final stretch between Sydenham and Bankstown of the M1 metro line has blown out the cost of what was formerly known as the Metro City and Southwest project to as much $23 billion, from a previous forecast of $21.6 billion.

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The price tag of the city and south-west sections of the M1 line is now more than double the forecast cost last decade of about $11.5 billion. The opening of the south-west section has been delayed to as late as next September, two years after a 13-kilometre section of heavy rail track was closed to complete the conversion to metro train standards.

The government said on Friday that building three metro rail lines at the same time, instead of consecutively, had placed extra pressure on costs, and led to the projects competing with each other.

As a result, the government is injecting an extra $2.4 billion into the metro projects.