Cost Overruns in Sydney Metro Rail Project

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Sydney Metro may be subject to a wide-ranging review after this public transport project costing $ 21 billion was found to be over budget. The “Premier of New South Wales or NSW”, namely, “Chris Minns” took charge of this Metro train network program after the previous government failed to deliver on time and on budget commitments and has demonstrated that this kind of situation has aroused due to cost overruns as well as significant time delays (Hussain et al. 2024). This metro project has been reviewed by the team therefore to find out the solutions and assessing this project to the right team, need help in assignment help Sydney . The premier has further stated that they don’t intend to give blame on others as their key objective is to identify the solutions. In this regard, it should be noted that the initial estimates of Sydney Metro West was $ 12 billion, but it has increased by almost $25.32 billion. At the initial stage, it was decided to extend the metro line to the south-west section and the total cost of the whole city along with that region was $9 billion which has extended to $20.50 billion at present time (theguardian.com, 2024). This has further been delayed in opening the western line by five years. This kind of scenario has affected both the economy as well as transport business across Australia negatively.

Figure 1: Proposal of West and State Metro Rail

(Source: smh.com.au, 2024)

In accordance with the above discussion it can be found out that the independent review which has been commissioned by the Australian government may look at delivery models as well as project governance along with the impact of the passengers and report on how to “resuscitate” the infrastructure pipeline of the state transport (Love et al. 2020). In this regard, “Mike Mrdak”, an “experienced transport public servant”, and “Amanda Yeates”, an “ex-deputy director general of the transport department”, will lead this review. This kind of scenario easily shows that Australia is spending and investing more on their infrastructure compared to the other countries spend on similar projects. In fact, different reports show that in Australia, there are 74% of major and technically complex projects which have already failed due to over-time or overrun of the budgets. In this regard, assignment help Perth and  can be found out that “Sydney Metro rail” had been at first budgeted at $13 billion and has now already exceeded $25 billion because of cost overruns (smh.com.au, 2024). Hence, the key question of the market researchers within Australia is the key reason for this kind of trend of overspending or wasteful spending in these tax-payer funded projects under different situations. Hence, the key reasons behind this overspending are as discussed below, such as,

  • Costs of Labour and Industrial Relations: Compared to other developed nations, Australia has high labour costs. It can be four out from different reports that the costs are almost 45% of the construction costs which is higher in this context.
  • Lower Productivity: The workers and employees within Australia might be paid more than workers of other developed countries, but it can be seen that they are less educated, skilled and engaged (Hussain et al. 2023). It can be found out that the workplaces across Australia are inefficient and they have lack of trust between industry players as well as the employees. In accordance with this scenario it can be found out that the construction costs within Australia have increased by more than 25% since 2014, which is mirroring the declining construction productivity of Australia which has fallen by 8.5 per cent over 15 years.
  • Strict Work Standards and Regulations: Though safety is utmost important but strict standards and regulations in terms of maintaining work safety and environmental protection within the construction industry in Australia always inflates the costs (Gharehbaghi, Tee & McManus, 2023). Therefore maintaining compliance with these regulations as well as standards might create more complexities and high costs of these infrastructure projects.
  • Complex Design: Safety, sustainability and resilience requirements make different construction projects within Australia more complex and expensive. This is because it should be noted that environmental, sustainability as well as the resilience considerations can increase costs. This can therefore further negatively impact the labour and employees to understand the overall requirements which resulted in delay in the projects in this context.
  • Poor Project Management: The project management process within Australia often consists of inefficient planning, delays and limited scope which further results into the financial chaos in this context (Walsh & Walker, 2021). This can sometimes influence the workers to delay in their construction business.
  • Offload of Risks: In Australia, project costs are often inflated. This is due to a lack of understanding of how to mitigate risk early on in a life cycle of the construction project. This is often due to the type of contract lawyers present to the industry with the aim of decreasing the upfront costs and shifting most of the risk to the contractors.

Thus, assignment help Canberra and based on the above discussion it can be stated that as this particular project has faced several issues and challenges the urgent independent review regarding this whole metro project will be appropriated. However despite having different types of challenges as well as cost blowouts this project in relation to their west side has bagged two key tunneling contracts in November 2022 which is the positive news in this context (Lin et al. 2024). It has been found that the tunneling process has been progressing at present time. The transport minister of Australia, “Jo Haylen” has stated that the government had “received an interim report” from “Mrdak & Yeates” which further “looks at the immediate implications” for the City & South West Metros for their upcoming budget. In accordance with this, it can be stated that the Australian government will therefore announce the interim report by early August, with the “section on Metro West” to be released in October (Sroka, 2021). The first budget of labour would be delivered on September 19 which is three months later compared to the originally planned, for presenting the new government a better understanding of the condition of finance within the state.

Reference list

Gharehbaghi, K., Tee, K. F., & McManus, K. (2023). Challenges in Determining the Scope of Rail Megaprojects: Responding to Ever-Increasing Infrastructure Demand. CivilEng4(2), 538-550. https://www.mdpi.com/2673-4109/4/2/31/pdf

Hussain, O. A., Moehler, R. C., Walsh, S. D., & Ahiaga-Dagbui, D. D. (2024). Minimizing Cost Overrun in Rail Projects through 5D-BIM: A Conceptual Governance Framework. Buildings14(2), 478. https://www.mdpi.com/2075-5309/14/2/478/pdf

Hussain, O. A., Moehler, R. C., Walsh, S. D., & Ahiaga-Dagbui, D. D. (2023). Minimizing Cost Overrun in Rail Projects through 5D-BIM: A Systematic Literature Review. Infrastructures8(5), 93. https://www.mdpi.com/2412-3811/8/5/93/pdf

Lin, D., Zhou, Z., Weng, M., Broere, W., & Cui, J. (2024). Metro systems: Construction, operation and impacts. Tunnelling and Underground Space Technology143, 105373. https://www.sciencedirect.com/science/article/pii/S0886779823003930

Love, P. E., Ika, L. A., Matthews, J., & Fang, W. (2020). Curbing poor-quality in large-scale transport infrastructure projects. IEEE transactions on engineering management69(6), 3171-3183. https://www.researchgate.net/profile/Lavagnon-Ika/publication/344866928_Curbing_Poor-Quality_in_Large-Scale_Transport_Infrastructure_Projects/links/617fe25eeef53e51e1156384/Curbing-Poor-Quality-in-Large-Scale-Transport-Infrastructure-Projects.pdf

smh.com.au, (2024), Metro West could face significant delays after multibillion-dollar cost blowout, Retrieved from: https://www.smh.com.au/politics/nsw/metro-west-could-face-significant-delays-after-multibillion-dollar-cost-blowout-20230724-p5dqtv.html [Retrieved on 24.02.2024]

Sroka, R. (2021). Mega-events and rapid transit: evaluating the Canada line 10 Years after Vancouver 2010. Public Works Management & Policy26(3), 220-238. https://journals.sagepub.com/doi/pdf/10.1177/1087724X211003099

theguardian.com, (2024), NSW government launches Sydney Metro review amid $21bn cost blowout, Retrieved from: https://www.theguardian.com/australia-news/2023/apr/13/nsw-government-launches-sydney-metro-review-amid-21bn-cost-blowout [Retrieved on 24.02.2024] Walsh, A., & Walker, P. A. (2021). Re-evaluating megaproject cost overruns: Putting changes into perspective. International Journal of Innovation and Economic Development6(6). https://salford-repository.worktribe.com/preview/1486991/2-updated.pdf

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