The state government’s settlement offer would mean the companies building the late and over-budget Metro Tunnel would get additional payments to finish the rail project.
The Allan government has offered the companies building the already-delayed and over-budget Metro Tunnel subway “additional payments” worth up to $888 million, as it tries to ensure passengers can catch a train on the new rail line by the end of 2025., outlines a series of financial incentives to the Cross Yarra Partnership construction consortium to secure the completion of the train line under central Melbourne.
In 2017, the government signed a contract with the Cross Yarra Partnership to build the tunnel for $11 billion. In 2019, the builderswhen the project began to cost far more than expected. Labor negotiated a new financial deal and the tunnel is now set to cost about $14 billion. The document is also an attempt, it says, by the state and its contractors, “on a confidential, without prejudice and good faith basis to reach alignment on project issues”.
Along with the specific construction payments, the letter offers an incentive to get the rail line open by next June.“The state will pay the full $100 million if Day One Train Operation is achieved by the revised date,” it says, and an additional “final acceptance” payment would be made. Under a section titled “public statements”, the letter says that the government and the builders would “agree any public statement that Cross Yarra Partnership consortium members intend to make in relation to these settlement arrangements”.
“ explain why this secret deal was offered, why it has been kept from Victorians and what the true cost of the Metro Tunnel now is,” Pesutto said.Infrastructure expert Marion Terrill, who spent years at think tank the Grattan Institute analysing the trend for enormous cost overruns on mega-projects, said the legal letter attempted to set aside any future legal disputes over the Metro Tunnel.
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