Costings debate for $3bn Metronet pledge

The planned first stage of Labor's Metronet package with railway lines to Ellenbrook, Yanchep and Byford, and an additional line linking Cockburn and Thornlie, will have a price tag of $3 billion, according to costings announced today.

Further moves will include the removal of level crossings in four suburbs, a new station at Karnup and a replacement station at Midland.

The package would be rolled out over six years under the Labor plan, with the details ticked off by Curtin University professor David Gilchrist and University of Notre Dame adjunct professor Michael Wood.

The most expensive piece of the puzzle is a railway line to Ellenbrook, which would cost $863 million, running in a spur off the Midland line near Bayswater.

That number is escalated from a previous estimate by the Department of Treasury, although it was not clear if that figure would include land acquisition costs.

Extensions of the Armadale line to Byford ($291 million) and of the Butler line to Yanchep ($386 million) were additionally based on Treasury costings.

A further item was the purchasing of 78 railcars for $410 million, although that price is assuming Labor’s plan to build 50 per cent of railcars locally would not increase the cost.

The biggest slice of the funding will come from consolidated revenue, around $1 billion, while land sales were forecast to raise $667 million.

Included in the costings was a reallocation of $415 million of Commonwealth funding for the Perth Freight Link, and $267 million from developer contributions at the use of value capture.

That would mean integrating residential and commercial developments with new train stations.

Treasurer Mike Nahan poured cold water on the analysis, however, and said the majority of the funding mechanisms would be rejected by Treasury.

Taking out the reallocation of federal freight link funding, land sales and the revenue from value capture would lead a hole of at least $1.3 billion, Dr Nahan said.

He questioned why Labor had not submitted the costings to Treasury, and said the independent consultants who had undertaken the analysis were closely associated with the Labor Party.

“(Labor) have admitted they will borrow $1 billion of that $3 billion,” Dr Nahan said.

“But three other sources are fake.

“They’ve reallocated some $600 million from the Perth Freight Link to Metronet, that is the Commonwealth contribution.

“That will not arrive. They know it, Treasury knows it.”

Additionally, the Commonwealth funding for the Freight Link differed from previous East-West Link funding given to Victoria, Dr Nahan said.

The federal government had threatened to withdraw that portion if the contract was cancelled, but had backed down.

But Dr Nahan said that had been because a payment had already been made, which the Victoria state government refused to hand back.

No payment had yet been received by WA, he said.

Dr Nahan said the state government also had a record land sales program under way, with revenue generally below target because the market for land was currently weak.

All of the cash from that program had been booked as revenue too, he said.

With regard to value capture, he said Treasury had advised they would not book that revenue because it is so uncertain.