Cost blowout if highway upgrade delayed: Mrdak

FAILURE to complete the duplication of the Pacific Hwy by the promised 2016 deadline could cost taxpayers more than $1 billion, a Senate estimates hearing has been told.

Department of Infrastructure and Transport secretary Mike Mrdak told the hearing on Tuesday that extending the 2016 deadline would have "a number of effects".

He said completing the upgrade by 2016 would cost more than $7 billion, but warned a substantial blow-out would arise from any delays.

"As we know, even on conservative estimates, the cost of the project will increase over time as the project is further pushed out," Mr Mrdak said.

"We've done some initial indicative estimates, based on very conservative estimates. We'd estimate that if the completion was pushed out to ... 2020 it would be at least an $800 million additional cost in today's dollars.

"If the completion was pushed out beyond 2020, to say 2024, our estimate would be something of the order of $1.2 to $1.3 billion cost in today's dollars ... to the current estimate of completion."

He also spoke about the "ongoing cost" of delaying the completion date, "both in productivity and safety" caused by the "current condition of the highway".

The Federal and State governments have been bickering since May over how the remaining work should be funded.

Federal Treasurer Wayne Swan announced an additional $3.56 billion for the duplication in the May budget, on the condition the NSW Government matched the amount.

The State Government, claiming the Commonwealth had backed away from an existing 80-20 federal/state funding split, allocated an additional $1.5 billion to the highway duplication in its June budget, leaving a $2 billion shortfall to meet the 2016 deadline.

In an effort to break the impasse federal Nationals Leader Warren Truss last month said a Coalition government would redirect the $2.3billion set aside for the Epping rail link in Sydney to the Pacific Hwy duplication.

But during a visit to Grafton he conceded the 2016 deadline was "shot", hinting at a 2018 target.

Earlier this month State Government Minister Don Page suggested a 2020 deadline was more realistic.

In speaking about the 2016 deadline, promised by both levels of government, Mr Page told APN "we're not going to get there...I think that's pretty obvious".

Like Mr Truss, he blamed the Federal Government for "reneging" on the funding agreement.

Mr Mrdak told the estimates hearing on Tuesday the Federal Government was waiting on "further advice from NSW on their position".

A department officer said "we understand they (NSW) are considering the matter".

"At this stage the Australian Government's position is it will only release additional funding on the basis of 50-50 contribution from both governments," Mr Mrdak said.



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