Soaring construction costs have bumped up the price tag for the revamp of the Australian War Memorial by a further $50 million.
It was originally billed as $498 million but the rise in the cost of raw materials and labour has pumped the budget up by 10 per cent.
The Canberra Times has learned that the Coalition government provided the extra funding in March without any publicity.
"Due to the significant and unprecedented market cost variations, the former government provided $50 million in March 2022 to manage these increases. We appreciate this support greatly," Australian War Memorial Director, Matt Anderson, said.
"These significant increases in supply costs are consistent with market movement across the entire construction and development industry. It is important to note, the scope of our works has not changed."
He could not rule out further rises: "The impacts of inflation and shipping continue to put pressure on construction costs. We will continue to do everything we can to value manage the project."
In a process of ongoing tenders for each new stage of work, the going rate for upcoming jobs is likely to have risen - with no likelihood that the rises will stop. Nobody knows when inflation will ease.
The initial work digging out the pit at the back of the Memorial has kept to budget, according to the Memorial's Director, but it's the next stages where costs have risen.
On one outside estimate, reinforced steel has risen in price by 40 per cent since the start of the year. Timber has nearly doubled in price.
Across the construction industry, labour shortages have bumped up wages for skilled workers. In Canberra, competition for workers is greater because there is so much construction.
Fuel prices have soared. In March, a litre of diesel in Canberra cost about $2. Now it's $2.30. There have already been 9,000 truck and trailer loads of earth removed from the site at the back of the Memorial where the Anzac Hall used to be. This means that each load costs 15 per cent more in fuel now than it did three months ago.
On top of that, the pandemic, plus the war in Ukraine and the economic stand-off between Russia and the West, have slowed up supplies of materials, both within Australia and from abroad.
CoreLogic, which monitors the construction industry, reckoned that the spike in prices could last for at least another 18 months.
The expansion of the Memorial was finally approved by the National Capital Authority on November 24, 2021, after much controversy.
During six weeks of public consultation, there was vehement opposition, including by the Australian Institute of Architects which objected strongly to the demolition of the award-winning Anzac Hall.
It said there were 601 submissions to the consultation, all but three of them in opposition.
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That demolition has now been completed, and in place of the hall is a nine metre deep pit and an army of construction workers.
Throughout the consultation and planning, the figure of $498 million - half a billion dollars - was set as the budget.
Labor in opposition backed the project, albeit with qualms about the cost. Two MPs suggested "lower cost options" should be considered. It's not clear what the Labor government would do if more taxpayers' money is sought.
Some extra costs did emerge but they were small compared with the extra $50 million now being added. Another eight million dollars had been spent on the "business case', for example, and this wasn't part of the big figure.
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