Any Victorian watching the Australian
Open men’s final on Sunday night couldn’t have missed the avalanche of
expensive taxpayer funded ads extolling the virtues of the Bracks
government and the “world class performances” it presides over.

They
even had Melbourne Airport CEO Chris Barlow openly praising the unions
for their part in widening the runway, which isn’t exactly the most
complex major project in the world.

Sadly, there is a huge
difference between the line taken in these blatantly political election
year ads and the reality, because Victoria’s status as the blowout
capital of Australia was confirmed once again yesterday.

Perth-based
Iluka is facing a $105 million claim by Downer-EDI’s Roche Mining
division over blowouts in producing the $200 million Douglas mineral
sands project in north-west Victoria. As usual in the state with the
most bloody-minded building unions, a company is facing a 50% cost
blowout. As The Australian noted in its story today, “Roche has also suffered from industrial disputes.”

This
is just the latest in a long line of blowouts that have hit the
Victorian budget and undermined Victoria’s overall economic performance
as The Age’s Paul Austin duly noted on 19 January when trotting out all the gloomy figures provided by the state opposition.

For the record, here are some other examples of how difficult it is to deliver a major project in Victoria:

Regional rail projects: $80 million to $750 million
Commonwealth Games: $397 million to $700 million and counting
Spencer Street: $200 million blowout for private consortium
Synchrotron: $100 million to $220 million
Federation Square: $100 million to $462 million
MCG redevelopment: blowout of more than $100 million
Yolla gas field: Origin’s $400 million Bass Strait project is late and way over budget with court action against Clough

We’ll expand this into a more comprehensive list that covers the past 30 years so send any other examples to [email protected].
For instance, Mainline collapsed in 1974 after union bloody-mindedness
contributed to costs blowing out at Collins Place (from about $80
million to $250 million). And the promised $1.6 billion Crown Casino
ended up costing about $2.2 billion as well.

Peter Fray

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