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$5.4 billion power struggle over Cross River Rail

Queensland Treasurer Jackie Trad has downplayed the prospect of a budget blowout for the massive Cross River Rail project despite the Government seizing control of construction.

Feb 26, 2020, updated Feb 26, 2020

The Palaszczuk Government believes the 10.2km rail link is vital to addressing both public transport and traffic congestion in Brisbane. Politically, however, it will prove to be either be a Labor legacy or an administrative albatross, dragging down the already debt-laden state budget.

While Trad no longer has carriage of the project, she is responsible for the budget, and today reiterated that it was a $5.4 billion government commitment needing close attention.

Cross River Rail Minister Kate Jones has publicly warned the Pulse consortium and head contractor CPB Group not to “run roughshod over Queenslanders or workers on this job”. Her comments come amid ongoing union tensions and a dispute with the Victorian government over another project she said CPB was trying to “weasel its way out of”.

As the Brisbane project moves the from procurement to construction phase, Jones will have the Cross River Rail Delivery Authority report directly to her, not via a semi-independent board originally put in place to avoid the perception of political interference. That will save an estimated $4 million, however there will be a cost in establishing a new compliance unit to ensure contractors honour their commitments.

The Courier-Mail today speculated the changes came as the project faced a multibillion-dollar budget blowout.

But when Trad was asked on ABC Radio today whether taxpayers should brace for cost overruns, and a budget blowout, the Treasurer said “that has not been the advice given to me”. She said Cabinet backed Jones taking a tighter rein.

“This has been a decision of Minister Jones and Cabinet,” Trad said.

“Kate, in her advice to Cabinet, has said government needs to have stronger controls over this.”

Jones told reporters “it’s my job to keep it to that $5.4 (billion)” contract price.

“We are on time, and on budget, right now, but it is early days,” the Minister said.

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Jones said the changes, which will require a formal ministerial directive, would give her a “much more direct line of sight” over the state’s largest infrastructure project.

“I have a responsibility to the taxpayers of Queensland, and to the Queensland government, and make sure that I am across this project and all of its details,” she told reporters.

The authority’s Matthew Martyn-Jones welcomed the changes and said it also gave them “more unfettered access” to government.

Trad was forced to give up responsibility for the project after failing to declare a conflict of interest involving an investment property likely to benefit from the improved rail access.

A CPB spokesman declined to comment. The chair of the board, former Labor deputy premier Paul Lucas, did not respond to requests for comment.

The project is being undertaken without Commonwealth support – Queensland decided to bear the risk of going it alone – and is due to be completed by 2024. It will expand the inner-city rail network by building twin tunnels under the Brisbane River with four new underground stations at Boggo Road, Woolloongabba, Albert Street and Roma Street, as well as a revamped Exhibition station at Bowen Hills.

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