Pipe cost hits $138m after new blow-out

Jessica Benton
A new blow-out in the cost of a pipeline connecting Geelong to Melbourne’s water supplies will hit the hip pockets of the region’s taxpayers, the state Opposition warned yesterday.
Senior Liberals’ MP Louise Asher said the blow-out proved State Government was “incapable of managing major water infrastructure projects”.
The pipeline would now cost $137.8 million, she said.
The Government will contribute $20 million to the project, with Barwon Water to pay the rest. Barwon Water will recoup its share of the cost through higher water bills for customers.
The Government initially costed the project at $80 million before the first blow-out raised the cost to $120 million.
Ms Asher said the Opposition discovered the latest increase in a budget information paper on public sector asset investment.
The cost of the pipeline had now almost doubled since the Government announced the controversial project less than two yeas ago, she said.
Ms Asher expected more blow-outs before the pipeline was complete.
“Every single mistake the State Government makes in failing to control costs is paid for by taxpayers and consumers,” she said.
“The cost of the pipeline has now blown out by almost $60 million over a period of 16 months and the pipeline is not expected to be completed until 2011.
“Unfortunately, a particular feature of Labor is its inability to deliver major projects on time or on budget.”
Ms Asher criticised the state’s mechanism for producing cost estimates.
“It’s up to the Government to announce the full costs,” she said.
“They expected the same standards when we were in office – that’s the way things are done.”
Ms Asher said the Victorian Auditor-General had also labelled the new cost a blow-out in his Planning for Water Infrastructure in Victoria report.
“If the Auditor-General calls it a cost blow-out then that’s good enough for me,” she said
A spokesperson for Water Minister Tim Holding refused the comment. The spokesperson referred the Independent’s questions about the pipeline cost to Barwon Water.
Barwon Water had not returned the Independent’s call for comment before the paper went to print yesterday afternoon.
The pipeline will boost Geelong’s supplies after Melbourne taps into desalinated water from a new plant at Wonthaggi.