Govt to spend $2.7bn on Metronet

The state government has allocated $2.7 billion in the 2024-25 budget to spend on Metronet while the estimated cost for the original commitments has blown out.

In the 2024-25 budget, the state government has allocated $2.7 billion on the broader Metronet program of works with ten projects underway or in planning.

Treasurer Rita Saffioti today revealed the Stage 1 commitments under the Metronet project were now estimated at $6.6 billion.

It is understood the overall Metronet project would cost about $12 billion to deliver.

The state government estimated it would cost $2.9 billion to deliver Metronet, covering nine commitments, when the plan was first announced in 2017.

The commitments to be delivered in the first stage of Metronet were the Thornlie – Cockburn link, the Yanchep rail extension, the Morley-Ellenbrook line, the Byford rail extension, Midland station and multi-storey carpark, crossings at Dennis and Caledonian avenues, and railcar acquisitions.

The state government estimated a $4.8 billion spend on Metronet over the next four years, with the majority of the projects due to be delivered in the 2024-25 financial year.

Over the next four years, $707.4 million has been included to meet cost increases for labour, equipment and materials.

The $707.4 million will also be used to deliver works under the Victoria Park-Canning Levevl Crossing removal project, the state budget paper reads.

The cost increases, described as “unavoidable”, have been funded from the federal government contribution of $453.2 million and additional state funding of $254.2 million.

Ms Saffioti confirmed the state government has an agreement with its federal counterpart for additional funds for Metronet.

The state government also increased its proceeds from borrowings by $1.8 billion, compared to the estimated value in the 2023-24 budget, mainly because of Metronet.

According to the budget papers, the increase was predominantly attributed to increased short-term borrowings to meet the cashflow requirements of the Metronet projects.

Capital appropriation is also forecast to increase by $1.4 billion in the 2024-25 financial year, again to meet the cashflow requirements of various projects under Metronet.

However, the budget paper said the Commonwealth was expected to reimburse the state with $1 billion for works completed in 2022-23 and 2023-24.

“Reflecting later payment of the Commonwealth’s contributions in those years, the Public Transport Authority incurred short-term borrowings,” the budget paper reads.

“The $1 billion in delayed contributions from the Commonwealth will be used to repay these borrowings.”

The state government is projected to spend $4.8 billion in Metronet projects over the forward estimates period, which includes $2.9 billion from the federal government.

Until 2028, $94.8 million will be invested to meet the additional costs in manufacturing 246 new C-series railcars, the budget paper reads.