1 00:00:00,080 --> 00:00:03,519 S1: Now another casualty of the war, if I can use 2 00:00:03,520 --> 00:00:07,600 S1: that phrase, is the big bills. Now, the big bill 3 00:00:07,600 --> 00:00:10,520 S1: is what we call the massive infrastructure program that the 4 00:00:10,520 --> 00:00:14,040 S1: state government is involved with here in Victoria. Now we've 5 00:00:14,040 --> 00:00:16,000 S1: got the North East link, which is still being built. 6 00:00:16,000 --> 00:00:19,160 S1: It's around about, I would argue, about two thirds done. 7 00:00:19,680 --> 00:00:22,080 S1: The West Gate Tunnel has already opened, although it's not 8 00:00:22,079 --> 00:00:25,560 S1: really being used all that much. Um, and then we've 9 00:00:25,560 --> 00:00:29,040 S1: got the suburban rail loop now trying to get a 10 00:00:29,080 --> 00:00:32,600 S1: handle on the cost of the suburban rail loop right now. It's, it's, 11 00:00:32,640 --> 00:00:35,680 S1: it's like trying to grab smoke. It's really difficult. The 12 00:00:35,680 --> 00:00:40,120 S1: last cost estimate was done in 2021 during the pandemic, 13 00:00:40,280 --> 00:00:42,959 S1: and it estimated that stage one Cheltenham to Box Hill 14 00:00:42,960 --> 00:00:46,800 S1: would cost $34.5 billion, and that cost is roughly split 15 00:00:46,800 --> 00:00:49,800 S1: three ways. State government, a third federal government, a third, 16 00:00:49,800 --> 00:00:52,959 S1: and so-called value capture a third. Now, the problem is, 17 00:00:52,960 --> 00:00:57,360 S1: since 2021, prior to the Iran crisis, building costs on 18 00:00:57,360 --> 00:01:00,680 S1: big projects were estimated overall to have gone up 20%. 19 00:01:01,040 --> 00:01:04,280 S1: So I assume that that applies to the suburban rail loop. 20 00:01:04,319 --> 00:01:08,190 S1: You go from 34.5 billion billion to 41.5 billion. So 21 00:01:08,190 --> 00:01:12,470 S1: that's a rise of $7 billion today. Big projects have 22 00:01:12,470 --> 00:01:15,229 S1: been warned by builders that there is another round of 23 00:01:15,230 --> 00:01:17,830 S1: cost increases. It's because diesel has gone up. The cost 24 00:01:17,830 --> 00:01:21,470 S1: of plastic piping has gone up. So many construction materials 25 00:01:21,470 --> 00:01:24,070 S1: have got more expensive in price. So I'm going to 26 00:01:24,069 --> 00:01:27,150 S1: be conservative and say since the start of the Iraq war, 27 00:01:27,470 --> 00:01:29,790 S1: you can add another 10% to the cost of any 28 00:01:29,790 --> 00:01:33,350 S1: big infrastructure project. That means, and these are my numbers, 29 00:01:33,350 --> 00:01:35,670 S1: not the government's, because the government refuses to give us 30 00:01:35,670 --> 00:01:37,990 S1: the numbers on this. But my estimate is that the 31 00:01:37,990 --> 00:01:41,030 S1: suburban Rail loop stage one, Cheltenham to Box Hill will 32 00:01:41,030 --> 00:01:46,750 S1: now cost $45.5 billion. That's assuming nothing else goes wrong. 33 00:01:46,950 --> 00:01:50,670 S1: There's no weird soil, there's no contamination. Nothing else goes wrong. 34 00:01:51,030 --> 00:01:54,790 S1: So a project is on the books at $34.5 billion, 35 00:01:54,830 --> 00:02:01,150 S1: will now cost $45.5 billion, $11 billion more. Now, where 36 00:02:01,150 --> 00:02:04,310 S1: is this money coming from? The government won't say who 37 00:02:04,310 --> 00:02:07,190 S1: is going to put the money in. The government won't say. 38 00:02:07,710 --> 00:02:11,350 S1: Does the business case still stack up when it costs 39 00:02:11,350 --> 00:02:15,570 S1: an extra $11 billion. Remember, I'm being conservative here. The 40 00:02:15,570 --> 00:02:19,130 S1: government won't say. Now let's just remind ourselves that the 41 00:02:19,130 --> 00:02:22,010 S1: Commonwealth Games were cancelled for a lot less. You know, 42 00:02:22,050 --> 00:02:24,750 S1: they overran by, well, depending on who you believe, 2 43 00:02:24,750 --> 00:02:27,889 S1: or $3 billion. I remember Jacinta Allan came on this 44 00:02:27,889 --> 00:02:29,930 S1: program a year or so ago and said, oh, it 45 00:02:29,930 --> 00:02:32,050 S1: doesn't make sense. We can't afford it. We have to 46 00:02:32,090 --> 00:02:34,010 S1: cancel them. And of course, what's happened is the fine 47 00:02:34,010 --> 00:02:36,730 S1: that we paid to the Com games organization has now 48 00:02:36,730 --> 00:02:39,329 S1: basically paid for the Glasgow Commonwealth Games, which will start 49 00:02:39,330 --> 00:02:41,850 S1: in a few months time. Okay. That was an overrun 50 00:02:41,889 --> 00:02:44,889 S1: of 2 or 3 billion. This is an overrun of 51 00:02:44,889 --> 00:02:49,530 S1: a minimum of $11 billion. And I'm being conservative with 52 00:02:49,530 --> 00:02:52,810 S1: those numbers. Why the government this is the state government 53 00:02:52,810 --> 00:02:55,290 S1: will not at least talk to us about this. I 54 00:02:55,290 --> 00:02:59,049 S1: just don't know. Alright. Remember, they cancelled the Commonwealth Games, 55 00:02:59,050 --> 00:03:02,410 S1: which were always a sham anyway, over an overrun of 56 00:03:02,450 --> 00:03:05,290 S1: two and a half, maybe $3 billion. This is going 57 00:03:05,330 --> 00:03:08,930 S1: to overrun $11 billion. It is turning into like that 58 00:03:08,930 --> 00:03:12,530 S1: movie Field of Dreams, a classic case of build it 59 00:03:12,530 --> 00:03:14,730 S1: and they will come. Doesn't matter how much it costs because, 60 00:03:14,770 --> 00:03:17,529 S1: you know, it's part of our transport future.