McGowan Government slammed in Auditor General report over $600m in project cost blowouts

WA’s Auditor General has uncovered nearly $600 million worth of cost blowouts in selected state government projects — with the completion date for nearly half the works pushed back by a year or more.

For the second time in two years the McGowan Government was also whacked over its lack of transparency over major infrastructure projects, with Auditor General Caroline Spencer again appealing for more regular publicly released progress updates.

The Office of the Auditor General examined 17 major projects and found their combined budgets had ballooned from $5.11 billion when originally approved to $5.67 billion, an increase of 11 per cent.

Of 14 active projects audited, seven had their completion dates extended by a year or more — including the Forrestfield-Airport Link and Geraldton Health Campus redevelopment, neither of which is expected to open until two and a half years beyond its original completion date.

Transport Minister Rita Saffioti has repeatedly resisted providing a revised opening date for the Forrestfield-Airport Link which was meant to begin running by June 30 – at which point it would already be two and a half years late.

“COVID-19 has impacted recent supply of specialist equipment and resources required for commissioning,” the OAG report said.

“At the time of reporting, completion is imminent.”

Ms Saffioti this week told The West Australian the new rail line connecting Perth Airport and the CBD would “absolutely” be running before the end of 2022.

Other projects found to be significantly delayed were the Casuarina Prison expansion and both the extension of Tonkin Highway to South Western Highway and grade separations at Hale, Welshpool and Kelvin Roads.

The biggest cost increases were in the Tonkin Highway works, which have been adjusted to incorporate Metronet works.

However, there also significant cost escalations across a number of lower-valued projects including the Geraldton hospital redevelopment ($50 million), Swan River Crossing bridge ($50 million) and two Common Ground social housing facilities in East Perth and Mandurah ($38 million combined).

“Many projects are now competing with a boom in WA’s building and construction sector, driven by stimulus measures, supply chain disruption and a tight labour market,” Ms Spencer said.

“We note the government has responded to these market pressures by smoothing its pipeline of works through delayed commencement of some projects, particularly in the Transport portfolio.

“It is important the State Government considers predictable events, such as stimulus measures and the impact of closed borders on labour supply, when planning the delivery of its Asset Investment Program to avoid overstimulating industry.”

Ms Spencer highlighted the Office of the Auditor General had released a similar report in 2020 which recommended more frequent public updates on the progress of major projects — something which has not occurred.

“This reporting would satisfy parliamentary and public interest, promote accountability, and build community trust and confidence around the management of the State’s significant investment of public money in major public assets,” she said.

“I note that the Department of Finance regularly reports to Government on the status of major projects and I have recommended this form the basis of regular public reporting.

“It is my intention to continue to periodically report and track a selection of major projects until Government fills the gap.”