Price mystery as Metro tunnels into more taxpayer cash

The final price tag of Melbourne's Metro Tunnel remains something of a mystery, even as taxpayers cough up an extra $837 million to pay for the project. 

Transport Infrastructure Minister Danny Pearson announced the latest blow out in a snap press conference on Thursday, taking the current cost to $13.48 billion. 

The project was originally costed at $10.9 billion when it was first announced in the 2016 budget. There have been other cost increases since.

Mr Pearson said there was no way to confirm if the latest blowout would be the tunnel's final price hike. 

"What I would say on that is that I cannot guarantee there won't be a one in 100-year event next year," he said in reference to pandemic-era debt increasing project costs. 

"What I'm saying is that here and now, we've got an investment into this project which will ensure the project has the resources it needs to deliver this project in 2025."

Danny Pearson
Danny Pearson says material and labour costs have increased for the Metro project.

Deputy Opposition Leader David Southwick said the hiked cost was the latest in a string of over-budget transport projects. 

"There's not a project here in Victoria that hasn't blown out," he said.

"Labor just blow taxpayers' money like there's no tomorrow...Victorians would have to ask where is this money coming from?"

Victoria was not alone in dealing with cost overruns, Mr Pearson said.

"We've seen a 22 per cent increase in building and material and labour costs since 2021 and that's had an impact on a number of projects in Australia," he told reporters.

"If you look at the Metro tunnel in Sydney that saw a $9 billion increase in its budget last year. 

"We've seen inland rail more than double to $30 billion and we've seen Snowy Hydro 2.0 more than double to $12 billion - so the reality is it is just costing more anywhere in the world."

The Metro Tunnel will connect the busy Sunbury, Cranbourne and Pakenham lines through a new tunnel under the city. 

Tunnelling workers
The Anzac station is one of five new underground stops for Melbourne's Metro Tunnel.

Five new underground stations at Anzac, Town Hall, State Library, Parkville and Arden are being built as part of the project. 

However, in May, the Allan government abandoned building a major medical precinct at Arden after technical work showed electromagnetic interference from a Metro Tunnel underground station would disrupt sensitive medical equipment.

The Metro Tunnel project is expected to open in 2025 after this first being slated for September 2024, but the exact date is yet to be confirmed.

As well as the extra government funds announced on Thursday, the Cross Yarra Partnerships consortium building the tunnel will tip in a similar amount.

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