A review of the former Liberal Government’s Torrens to Darlington motorway design has revealed it would have cost South Australian taxpayers around $15 billion – not the $9.948 billion total claimed before the last state election.
The Liberals’ 2021 Final Business Case stated a total project estimate of $9.948 billion, which formed the basis of funding commitments by the South Australian and Commonwealth Governments.
The State Labor Government has now concluded a thorough review of the plans it inherited and will this week reveal an updated and improved North South corridor design that will provide the final piece of the biggest transport infrastructure project in South Australia’s history.
The Project Review has identified that the cost for the previous project scope included in the 2021 business case was significantly understated and underscoped.
The former Liberal government’s 2021 Reference Design would have cost $14.3 billion to realise as presented. However, their estimate did not include any allowances for broader network upgrades that are considered essential to the project to ensure that the River Torrens to Darlington motorway operates effectively once the project is complete.
Incorporating those essential network upgrades into the 2021 design would have cost around an additional $850 million – for an overall total of $15.15 billion.
The review has now also determined that the 2021 Business Case plan underestimated the number of properties required for compulsory acquisition in order to realise the proposed project.
The number of acquisitions announced by the former government was presented as 393, when the review has now revealed the true extent of full and partial acquisitions required to deliver the Liberal plan would be 412.
The State Government’s review included a financial audit of the final design costings by independent firm PwC, which also provided detailed cost estimates for two alternative roadway solutions as a benchmark comparison.
These included an ‘Open Motorway’ option – a combination of below-grade ‘open’ motorway and above-ground structures, and an ‘At-Grade’ Motorway option – considered by industry as the lowest-cost ‘budget’ solution to delivering the required transport and traffic outcomes.
The review estimated the total cost of an Open Motorway solution based on a ‘P90’ estimate that factored in escalation rates and contingency amounts (90 per cent probability of the project being delivered within the cost estimate) to be $14.5 billion.
The At-Grade option had a P90 cost estimate of $12.8 billion.
However, the audit pointed out that both options would involve significantly higher levels of property acquisition along the road corridor than a design solution that retained tunnels as a major element of the thoroughfare.
The Open Motorway option would require a total of 813 property acquisitions, while an At-Grade solution would require 867, including Thebarton Theatre, St Anthony’s church and the Hilton and West Thebarton hotels.
The Government also asked PwC to provide advice on how much of the proposed River Torrens to Darlington project could be completed if the $9.9 billion budget identified by the former Liberal government was maintained.
The solution proposed to deliver only the southern tunnel section of the original 2021 reference design, with integration to South Road “at or around Richmond Road or James Congdon Drive”.
Under this model, South Road would have been retained in its current configuration between the River Torrens and Richmond Rd, with various intersection upgrades incorporated into the design.
However, even this curtailed solution was considered to have a P90 cost estimate of $10.9 billion – a billion dollars over the Liberals’ proposed budget.
The Government has decided that it is not feasible for this project to continue without a commitment to see it through to its conclusion, unlocking the benefits of the entire 78 kilometres of the North South Corridor well into the future.
Quotes attributable to Minister for Infrastructure and Transport Tom Koutsantonis
It is vital we do this crucial project right first-time, and for the long term.
The Liberals’ plan for this project was flawed, both from a design perspective and from its grossly under-estimated costs.
Delivering a project of this magnitude required a rigorous financial assessment, and it is clear from the State Labor Government’s thorough review that the project scope included in the 2021 Business Case was simply unable to be delivered for $9.9 billion.
The review was also independently audited by PWC and tested against alternative design options – each of which would cost taxpayers billions of dollars more than the original pricetag assigned to this project by the former Liberal government.
However, these options were determined to be vastly inferior from a design perspective to the preferred tunnel project design – and would cause significant disruption and ongoing dislocation for residents of the western suburbs.
Similarly, a piecemeal approach to save money in the short term would simply kick the can down the road, prolonging the uncertainty for western suburbs residents and commuters.
This project is too important to risk on an ill-considered or second-rate solution - we only have one chance to do this right, and that is why we have taken the time to ensure we have the right option, correctly costed.
Today we can confirm that the Malinauskas Labor Government will be proceeding with a tunnels design solution between the River Torrens and Darlington, and the project remains on track for full completion by 2031.