Why the cost of so many major infrastructure projects blows out

A new report reveals the cost of major infrastructure projects are blowing out because Australian governments don’t question claims from construction companies.

The report from the Grattan Institute found governments fail to negotiate good deals on road and rail projects.

Transport and cities program director Marion Terrill says “governments just aren’t driving a hard enough bargain for taxpayers”.

She says governments are too focused on starting projects.

“Transport projects are very politicised and governments put more emphasis on getting them started in their term of government than they do on driving a hard bargain,” Ms Terrill told Ross and Russel.

“They’re rushing projects to market which aren’t fully specified and they don’t understand the risks, instead of focusing on getting us high-quality infrastructure at the cheapest long-term price.”

Ms Terrill is calling for an expert panel set up by the Auditor-General to examine projects for legitimacy when construction firms want to renegotiate.

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