Greens MP and transport spokesperson Cate Faehrmann says compensation payments of up to $10 million to the losing bidders for the running of the North West Rail Link sets a dangerous precedent and is evidence that transport cost blow-outs will continue under the O'Farrell government.
"It's incredible that the companies making huge profits on major
infrastructure will be bailed out by the government for their failed
bids. This money should be spent on projects that will reduce
congestion, not on lining the pockets of already wealthy multinational
companies," said Ms Faehrmann.
"Business invests for possible ventures all the time, sometimes things
don't work out, especially if they aren't suitable for the job.
Bidding for major projects is always a risk and the companies factor
this into their final price.
"Despite what the Transport Minister says, these are not exceptional
circumstances. By her actions Minister Berejiklian is actually sending
a signal to business that the project may not be built.
"The Greens initiated Upper House Inquiry into rail costings found
that NSW was already the most expensive state to build rail in
Australia. One of the factors was the very high contingency factor
built in to rail project bids.
"By compensating companies in this way, the government is effectively
making the taxpayer pay twice – once to the losing bidders and again
to the successful bidder as part of their contingency costs built in
to their final price.
"$10 million would go a long way to funding some of the relatively
inexpensive projects which would be of enormous benefit the community,
like the Greenway that's been shelved because of supposed funding
constraints," said Ms Faehrmann.