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The next stage of the Suburban Land Agency’s industrial park in Hume is set to cost ACT taxpayers twice as much as expected, after a near $5 million blowout in the project’s price. The cost of civil engineering and landscape construction work at New West stage 2B has been revised from $5.76 million to more than $10 million, according to the agency’s 2019-20 annual report. The report does not explain the reasons for the increase and the agency did not respond to questions about it from The Canberra Times. It is the latest in a series of cost blowouts on agency projects and consultancy contracts reported in recent years, totaling millions of dollars. Civil construction work on Denman Prospect’s first stage cost almost $21 million, more than $2.17 million above the original estimated price, while the Gungahlin town centre east project came in $1.36 million above the initial contract price. The agency paid a combined $1.5 million more than expected on contracts for planning and engineering work in Taylor, and $1.2 million above the original estimate price for similar work at Lawson. The cost blowouts are detailed in the agency’s two most recent annual annual reports. The 2019-20 report, published in late December, shed more light on the agency’s financial struggles as it battled a subdued property market and then the COVID-19 crisis. It reported just $200 million in revenue from land sales – $234 million, or 54 per cent, short of its target. Decreased revenue meant a lower return to the ACT government, which received just $101 million in 2018-9 from the agency. The Canberra Times earlier this year reported the Suburban Land Agency’s “dire” financial predicament forced it request a $50 million lifeline from the ACT government amid the height of uncertainty about the coronavirus pandemic. Chief Minister Andrew Barr’s cabinet ultimately agreed to a $30 million loan, but the agency hasn’t yet needed to access the emergency funds after a recent uptick in sales improved its financial position. Some 250 blocks in the new Molonglo Valley suburb of Whitlam were sold in October alone, with the agency crediting ACT government stamp duty concessions and the Commonwealth HomeBuilder scheme for re-igniting buyer activity in the national capital. The agency released more residential land to market in 2019-20 than originally forecast, including an additional 90 affordable housing blocks. However, it failed to meet its target for mixed use and commercial land. While chief executive John Dietz described the agency’s financial outlook as “positive”, the annual report acknowledged that extent of the implications of the COVID-19 pandemic for current and future land releases remained uncertain. “It is likely to depend on the scale, length and overall economic impact of the COVID-19 outbreak,” it said.
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The next stage of the Suburban Land Agency’s industrial park in Hume is set to cost ACT taxpayers twice as much as expected, after a near $5 million blowout in the project’s price.
The cost of civil engineering and landscape construction work at New West stage 2B has been revised from $5.76 million to more than $10 million, according to the agency’s 2019-20 annual report.
The report does not explain the reasons for the increase and the agency did not respond to questions about it from The Canberra Times.
It is the latest in a series of cost blowouts on agency projects and consultancy contracts reported in recent years, totaling millions of dollars.
Civil construction work on Denman Prospect’s first stage cost almost $21 million, more than $2.17 million above the original estimated price, while the Gungahlin town centre east project came in $1.36 million above the initial contract price.
The agency paid a combined $1.5 million more than expected on contracts for planning and engineering work in Taylor, and $1.2 million above the original estimate price for similar work at Lawson.
The cost blowouts are detailed in the agency’s two most recent annual annual reports.
The 2019-20 report, published in late December, shed more light on the agency’s financial struggles as it battled a subdued property market and then the COVID-19 crisis.
It reported just $200 million in revenue from land sales – $234 million, or 54 per cent, short of its target. Decreased revenue meant a lower return to the ACT government, which received just $101 million in 2018-9 from the agency.
Chief Minister Andrew Barr’s cabinet ultimately agreed to a $30 million loan, but the agency hasn’t yet needed to access the emergency funds after a recent uptick in sales improved its financial position.
The agency released more residential land to market in 2019-20 than originally forecast, including an additional 90 affordable housing blocks. However, it failed to meet its target for mixed use and commercial land.
While chief executive John Dietz described the agency’s financial outlook as “positive”, the annual report acknowledged that extent of the implications of the COVID-19 pandemic for current and future land releases remained uncertain.
“It is likely to depend on the scale, length and overall economic impact of the COVID-19 outbreak,” it said.
