METRONET
— CONSTRUCTION COSTS
145. Mr R.S. LOVE to the Minister for Transport:
I refer to Josh Zimmerman's article from last Sunday
that refers to the suite of Metronet projects.
(1) Has the government adjusted its cost expectations
for Metronet to reflect two years of ballooning steel prices, critical
workforce shortages, and a surge in fuel prices placing upward pressure on the
cost of construction?
(2) How much extra does the government expect to spend to
complete the suite of projects?
Ms R. SAFFIOTI
replied:
I thank the member for that question.
(1)–(2)
Of course, today in the second reading debate the member acknowledged just how
much support the federal government is giving to Metronet. In fact, I was
little bit shocked, maybe I should not have been, when I was in my car
listening to an Australian government ad that said, ''The Australian
government is delivering infrastructure across the nation, including Metronet
and the Bunbury Outer Ring Road in Western Australia''! Are they our
ads? No, they are federal government ads. We are delivering a record number of
infrastructure and projects throughout Western Australia including Metronet.
What we do is to keep monitoring the projects. They are all in different stages
of delivery. They have different styles of contracts and some of them have
different levels of contingency too. There are a number of variable factors,
and as I said today, we have had a significant increase in steel prices and
some projects are quite vulnerable to that, particularly if a large component
of that structure is steel. For example, bridges, particularly the steel bridge
that we announced today, have a large percentage of steel components. There are
significant cost pressures. As the Premier said, with rising iron ore prices,
you get the rising royalty revenue, but the offset, whether it is schools, or
anything that is being delivered throughout the state, is that there are cost pressures. But we continually
monitor those. If cost pressures materialise and crystallise, we acknowledge
that through the budget process and through midyear processes. That is what we
have done. We take a very sensible approach with a very open relationship with
contractors, to make sure that we can all work to deliver our projects.