Canberra Metro to lose millions each month light rail is delayed
Canberra Metro stands to lose between $2.8 million and $4.7 million each month Canberra’s light rail project is delayed, money it will never recoup because of the way the contract is designed, ACT government officials say.
The Gungahlin to Civic rail line is scheduled to be completed in December, and both the government and the consortium has maintained they will meet that deadline despite reports of missed milestones.
However in Estimates this week, government officials said even if the tram is delayed, it is not the territory that will lose out.
Under-Treasurer David Nicol said the territory’s $375 million capital contribution to the project would not be paid until operations began.
“It’s quite a significant incentive for the consortium to start operations as soon as is safe for them to do so,” he said.
Availability payments each month to a total of $47 million for the first year will also be delayed until commencement.
The exact monthly payments are commercial in confidence, but they range between $2.8 million and $4.7 million a month, a government spokeswoman said.
Capital Works director of infrastructure, finance and reform David Asteraki said if completion was delayed, the consortium would never see that money.
“The end date of the contract is fixed relative to the due date for construction completion rather than actual date of construction completion so if they’re late we don’t pay those availability payments but those payments are lost forever because there’s no catch up at the end so it’s a very powerful incentive,” Mr Asteraki said.
Source: The Canberra Times