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Financial mismanagement by Greiner government puts federal roads program in jeopardy



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221/91

22 May 1991

FINANCIAL MISMANAGEMENT BY GREINER GOVERNMENT PUTS FEDERAL ROADS PROGRAM IN JEOPARDY

The New South Wales Greiner government has been responsible for a massive $150 million blowout in the cost of Federally-funded National Highway and National Arterial road projects since it came to power in 1988.

Federal Land Transport Minister, Bob Brown, said today the Greiner government's incompetence in managing Labor's national road programs had shattered the myth that it was a good economic manager.

'Because of the Liberal-National Party government's incompetence, NSW taxpayers will be forced to fork out tens of millions of dollars to complete Federal road works that should have been completed within budget', Mr Brown said.

'Alternatively, if the NSW government is re-elected and refuses to -accept responsibility for its mismanagement, the Commonwealth will have no option but to defer other proposed National Arterial road projects in NSW to ensure that those already under way are completed.

'This fiasco, brought about by the Greiner government and the NSW Roads and Traffic Authority, cannot be allowed to continue'.

Mr Brown said the blowouts had occurred on proposed works for the Hume Highway at Goulburn, Cullarin Range, Yass and Jugiong, and on National Arterial road projects in Sydney, Newcastle, Bathurst and Lithgow.

'Overall, there has been a blowout of $149.6 million, or 51.8 per cent, on just eight projects since the Commonwealth received original estimates from the Greiner government in early 1989', Mr Brown said.

'The first blowout in cost estimates for projects funded by the Hawke Government occurred soon after the launch on 1 May 1989 of Labor's $4000 million strategy to upgrade Australia's National Highways and National Arterial

roads.

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'This strategy forms part of the Hawke Government's micro-economic reform program to improve transport efficiency and the ability of Australia's industries to compete on domestic and world markets.

'The strategy for NSW was based on estimates provided by Mr Greiner's Roads and Traffic Authority, which assured my Department that its figures were up to date and not subject to significant change.

'Despite these assurances, the estimated cost of four major projects on the Hume Highway increased just a few weeks later by more than $112 million, or some 53 per cent in real terms.

'During subsequent discussions, the NSW government conceded its earlier cost estimates were inadequate and were four years out of date.

'Immediate action was taken to review the estimates and the National Highways program to ensure the high priority projects on the northern section of the Hume could still be completed as planned.

'Consultants also were brought in to review NSW's own estimating procedures, and the NSW Minister for Transport, Mr Baird, provided an assurance that the projects would be completed on time, to standard and within budget.

'However, this basic principle of management seems to have been ignored by NSW as a second blowout in cost estimates has now occurred on major National Arterial projects in Sydney, Newcastle and on the Great Western Highway at Bathurst and near Lithgow.

'The increases in the State's cost estimates for these projects, which are already well under way, varies from 22 per cent to a staggering 123 per cent in real terms —

a total blowout of more than $37 million.

'As I say, this fiasco cannot be allowed to continue.

'The Hawke Government cannot and will not provide any additional Federal funds to NSW to cover the cost increases for this second group of projects, which are National Arterial road works.

'The NSW Government has already received a fair share in Federal road funds, with increases of some 13 per cent in 1989-90 and almost 20 per cent in 1990-91.

'-If the Greiner government is re-elected, it must fund the cost increases for these projects itself1.

Mr Brown said the real losers in the debacle were the road users and industries that looked forward to the achievement of the Hawke Government's national roads program to provide better access to domestic and overseas markets.

'If Mr Greiner is to have any credibility as a leader in micro-economic reform and as a good manager, he must give an unequivocal commitment to fund his government's cost overruns on National Arterial roads', Mr Brown added.

'This would assist in achieving completion of all the announced road projects for the benefit of road users and industry'.

Details of cost blowouts in National Highway and National Arterial road projects are attached.

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Media inquiries: Brian Hill (06) 277 7440

NATIONAL (HUME 1 HIGHWAY PROJECTS

Original New

Estimate Estimate Increase

SM1989 /90 SM1989/90 %

Goulburn Bypass 47.3 76.0 28.7 60.7

Cullarin Range Deviation 84.2 123.0 38.8 46.1

Yass Bypass 50.2 70.0 19.8 39.4

Jugiong Bypass 30.2 55.0 24.8 82.1

211.9 324.0 112.1 52.9

NATIONAL ARTERIAL ROAD PROJECTS

Original Estimate

New Estimate Increase

SM1990/91 SM1990/91 m %

City West Link Road, Sydney - Interchange at Victoria Road/The Crescent 27.4 33.4 6.0 21.9

State Highway 23, Newcastle - Newcastle Road to

Rankin Drive

21.6 29.9 8.3 38.4

Great Western Highway - New bridge over Macquarie River, Bathurst 8.3 18.5 10.2 122.9

- Cox's River Deviation, west of Lithgow 18.0 31.0 13.0 72.2

75.3 112.8 37.5 49.8