A fresh breakdown of the benefits of light rail's next stage should be made public, the auditor-general has found, after an earlier analysis failed to show how the line would be a catalyst for urban development, a key expected upside to the project.
An audit of a 2019 business case for stage 2A of light rail, a planned 1.7 kilometre link between the city centre with Commonwealth Park, found the case relied too heavily on so-called "transformational projects" around the transport corridor.
An updated business case should take into account Canberra passenger data and post-COVID expectations for commuting, the audit suggested.
Auditor-General Michael Harris said if those projects were not completed as expected, the "timing and quantification of the expected benefits" were at risk.
The audit also found Major Projects Canberra, the agency which prepared the business case, did not request supporting information from its consultants that showed what assumptions and calculations had been made to assess the costs and benefits of the project.
"The lack of documented methodology and processes for quality assurance of the cost benefit analysis, combined with the absence of spreadsheets demonstrating the calculations or an economic model, impairs Major Projects Canberra's ability to demonstrate the accuracy and appropriateness of the economic appraisal of light rail stage 2A," the audit found.
The audit report identified interdependent projects as development at West Basin on the Acton waterfront, raising London Circuit to the level of Commonwealth Avenue, and a National Capital Authority proposal to reconfigure Kings and Commonwealth Avenues as grand boulevards.
"Any failure to implement these projects on a timely basis will have a negative impact on the expected benefits of light rail stage 2A," Mr Harris said.
The audit said that a significant portion of the benefits attributed to the light rail stage relied on the project accelerating development at the Acton waterfront on Lake Burley Griffin at West Basin, but the business case and economic appraisal report failed to show how the project would do so.
"Should the Acton Waterfront not be developed as fast as is hoped, then the expected benefits of light rail stage 2A and the timing of those benefits are at risk," the audit, released on Friday, found.
"As city shaping benefits and wider economic benefits comprise the majority of the benefits associated with the project, any risks to the accelerated development of the Acton Waterfront will have a significant impact."
The audit recommended Major Projects Canberra review and update the economic analysis of the light rail project, including assessing the assumptions which the economic analysis were based on, and make the updated analysis public.
Major Projects Canberra should also explicitly identify the development costs and benefits of the project, including the land use and "city shaping benefits" to be derived from the project and how those were linked to the Acton waterfront development. the audit recommended.
The audit said the requirement for the project to be wire-free had been confirmed since the business case was prepared, and Major Projects Canberra should update the capital costs of building a wire-free light and retrofitting the existing light rail vehicle fleet to operate wire-free.
The 2019 business case had said the light rail project would "facilitate urban renewal and assist the ACT government in achieving its land use and development objective, in the first instance in the Acton waterfront, City Hill and City West, and then to Woden, supporting revitalisation along the corridor and particularly in the Woden Town Centre".
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Cabinet approved the business case in September 2019, which prompted the ACT government to begin contract negotiations for the project.
The ACT government had received the Auditor-General's report on Friday and would consider the detailed findings closely, a spokesman said.
"The report focuses on Stage 2A of light rail. Whilst the Stage 2A extension provides some benefits, the ACT Government's intention is to maximise the benefits for the city in extending the line from Gungahlin to Woden," the spokesman said.
"Stage 2 of light rail will be Canberra's biggest-ever infrastructure project, delivering major long-term benefits. We recognise the importance of delivering this project in a way that realises economic, environmental and social benefits for the Canberra community."
Work on the light rail project will begin this weekend, with utilities relocation works forcing the closure of part of London Circuit, between Constitution Avenue and Edinburgh Avenue, until Tuesday.
A construction site compound has also been established in the car park on the corner of London Circuit and Constitution Avenue.
Commuters were warned in July they would face years of disruptions and delays during the project, with Commonwealth Avenue to face a capacity reduction of nearly 80 per cent during the construction period.
The ACT government in April awarded a $90 million contract to design the light rail route between the city and Woden to multinational infrastructure consultants AECOM.
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