Costs blow out on Coalition parking projects funded without full scoping

Costs blow out on Coalition parking projects funded without full scoping

The Morrison government paid $42 million up front for four train station car parks in the key Liberal-held seat of Deakin in Melbourne’s east before any of the projects had been properly assessed.

The payment was made to Maroondah Council last year but construction is yet to begin on three of the four, and the estimated cost of delivering them has already blown out by almost $20 million. It is more than a year until most of the projects are likely to be completed.

The existing carpark at Ringwood station, one of several sites chosen for upgrades under the federal government’s controversial congestion fund.Credit:Paul Jeffers

The commuter car parks in Ringwood, Heathmont, Heatherdale and Croydon are in the marginal Liberal electorate held by Assistant Treasurer Michael Sukkar, and are part of a program slammed by federal Auditor-General Grant Hehir for failing to award funds based on merit.

In a scathing report this week, the Australian National Audit Office found that projects under the $4.8 billion federal Urban Congestion Fund program had been green-lighted by Prime Minister Scott Morrison the day before he called the 2019 election, and the money mostly went to Liberal-held or marginal seats.

Mr Sukkar was one of several Coalition MPs at risk of losing his seat at the time. His margin going into the election was more than 5 per cent, but he faced a backlash in Victoria for his role in the political coup against Mr Morrison’s predecessor, Malcolm Turnbull. Mr Sukkar won the seat on a reduced margin.

The Auditor-General revealed that on the eve of the election the government negotiated a deal with Maroondah Council to deliver the projects at a cost of $15 million each. However, the government agreed to pay the council 70 per cent, or $42 million, up front. The payment was made “prior to any of the four projects being fully scoped”, the documents reveal, and the remainder of the costs were to be paid on completion.

Sandbagging Deakin: Scott Morrison with Michael Sukkar during the 2019 election campaign.Credit:Dominic Lorrimer

“The approach taken by the department in establishing delivery timelines and milestone payments did not address the risks,” Mr Hehir said in his report. “Rather, 70 per cent of the total Australian government funding committed to these projects was paid around seven to 10 months in advance of the expected construction start dates.”

The payment plan is the latest example of dubious processes in administration of the Urban Congestion Fund, in which the Coalition promised to build 47 commuter car parks across Australia, including 29 in Victoria that had been announced without consulting the state government.

Some of those proposals were on sites where the state was already building projects of its own, while others, such as a proposal for a new car park at Balaclava Station in East St Kilda, were made even though the Port Phillip Council had earmarked the site for social housing a year earlier.

The decision not to undertake proper assessments has also resulted in budget blowouts. The proposed car park at Ringwood, for example, is now expected to cost taxpayers almost $30 million – double the original price, with $14.7 million of additional funding provided in the latest federal budget. The project is expected to start construction in late 2021 and be finished by mid-2022.

Construction at Heathmont is estimated to start and finish at the same time, but the project has already blown out to almost $19 million, with another $4 million provided in the last budget.

The projects announced in a number of seats in Melbourne’s east and south-eastern suburbs are politically contentious because some came at the expense of road and rail investment in the Labor-dominated north-western suburbs, which infrastructure experts said were more congested and in greater need of upgrades.

Labor MP Andrew Giles referred the fund to the Auditor-General earlier this year amid concerns of widespread pork-barrelling.

“What we’ve seen here is a desperate attempt to save a marginal seat when this money should have been spent to support hard-working commuters on the basis of evidence and need,” Mr Giles said.

“The more we find out about these car rorts, the worse it looks.”

The government has defended the scheme, with Infrastructure Minister Paul Fletcher saying this week that “all infrastructure investment decisions made by the Australian government are made based on an identified need in the community”.

As The Age and The Sydney Morning Herald revealed this week, a fifth proposal in Mr Sukkar’s Deakin electorate, for a commuter car park in Mitcham, was also allocated $15 million by the government simply by issuing a press release along with five other Liberal MPs saying it would happen. But the project on state government land was cancelled in April.

Mr Sukkar declined to comment and the Maroondah Council did not respond to calls.

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