ACT light rail stage two cost and timing could blow out, economist warns

Adrian Hart, associate director with BIS Oxford economics, told an inland rail conference on Wednesday that rail construction, including light rail, had nearly doubled in the past three years, to $7.4 billion and would near-double again over the coming four years, to $13.5 billion.

"It's a massive mountain of work. You've got all these projects just stacking up on top of each other other," he said. "We've only reached base camp on this mountain of work.

"The peak is still a long way off. It's about five years away - but geez, it goes up really quickly to reach that peak."

With the Gungahlin leg of Canberra's rail project finished this year, the ACT government wants to start the second leg as early as next year.

In July, it split stage two so it can push ahead with a mini-leg of 1.7 kilometres from the city to Commonwealth Park and West Basin, before it confronts the bigger planning hurdles near Parliament House. No detailed costings have been released for the two legs of stage two, but the engineering challenges are much bigger than stage one, including the problems of straddling Parkes Way, crossing the lake and travelling wire free. It has yet to go to tender.

Mr Hart said governments faced the risk of cost blow-outs as they competed for rail expertise. And he said more work was needed to understand cost increases in rail projects, and the impact of the mountain of work on costs.

"Canberra's buying into an investment program as everyone else is in rail and everybody is scrambling for those resources," he said.

"If you wanted to think of a time when it was going to be hardest to get best value for your dollar in construction, now would be the time.

"I'm not saying they shouldn't invest now, but I'm just saying it's a big challenge."

BIS Oxford Economics estimates an extra 70,000 people nationwide are needed to build the transport projects planned, peaking in 2024. Another 12,000 are needed to operate and maintain the train lines.

They include another 16,400 building labourers, 7800 electrotechnology and telecommunications workers, and 1400 drivers.

Mr Hart said that meant "an incredible boost to skills" and training in the transport sector to deliver the projects.

Without it, the projects would be delayed and costs rise. He pointed to the crisis that has hit apartment building, which has struggled in a boom, and said rail also faced risks to quality and safety unless high-skilled people could be found.

Mr Hart spoke at a conference on the $10 billion inland rail project in Toowoomba on Wednesday. The Melbourne to Brisbane line passes well west of Canberra, running from Parkes to Junee.