'More' for Canberra: government sets completion date for next phase of light rail

Construction will start from late-2024 and is expected to take about three years, meaning the 1.7-kilometre extension will open in January 2028, more than 8.5 years after the first stage opened between Gungahlin and the city.

The ACT government on Thursday announced it had signed the contract for the extension from the Alinga Street terminus to Commonwealth Park.

The federal government has contributed an additional $125.5 million to the extension project, on top of $135 million it committed in February 2021.

The original 12-kilometre project had a construction cost of $675 million - $32 million under budget.

Focus will now shift to stage 2B of the project - planned to link Commonwealth Park with Woden - including producing an environmental impact statement that will be released for consultation late next year.

Chief Minister Andrew Barr said the project would be the transport anchor to support further development in Canberra's city centre.

"What Canberra can expect from this transport project and the associated works are new public parks, more housing, more hotels, more restaurants and cafes, and more commercial activity," Mr Barr said.

The government signed the contract with Canberra Metro through a single-select procurement, after a federal infrastructure review confirmed the Commonwealth would continue to support the light rail extension.

"Today's announcement, I think, reflects the quality of that engagement, the detailed examination of construction cost pressures, supply and materials issues that are impacting on the Australian infrastructure market, and have led us to a value-for-money procurement, a 50-50 partnership with the Commonwealth, and a fantastic project," Mr Barr said.

Federal Infrastructure Minister Catherine King said the project represented "great urban design".

Ms King said the project was not under threat in a recent review of Commonwealth infrastructure spending, which cut funding for projects announced around the country.

"What that has allowed us to do is find additional money for important projects like light rail [stage] 2A, and I really thank the ACT government for working with us and making sure we have a sustainable pipeline that is able to be delivered," she said.

There will be three new stops built at Edinburgh Avenue, City South and Commonwealth Avenue on the extension.

Light rail to Commonwealth Park will be delivered wire-free and will include sections of green track where the light rail line sits within a bed of specially selected grass or plants instead of concrete.

This project is jointly funded by the Australian and ACT governments on a 50-50 basis.

Transport Minister Chris Steel said Major Projects Canberra had been working closely to procure the project through Canberra Metro, the existing supplier of light rail services.

"This has taken some time and obviously the approvals for this project had to be sought as well prior to that being concluded, including getting works approval through the National Capital Authority," Mr Steel said.

Mr Steel said some of the approvals for stage 2B were out of the hands of the territory government, deflecting a question of whether work would start on the Woden line before 2030.

Ms King said she expected the ACT would come forward to discuss funding for stage 2B when it had a clearer idea of the costs.

"This is what you're supposed to do with infrastructure. You do the planning work, you work out all of the geotech, you make sure you know what it is you're going to build and how much it's going to cost. You do the environmental approvals, you do the planning approvals and you start to work on the capital in that process," she said.

"And that's exactly what they've done with this stage 2A and what they'll do with 2B. I know as it gets closer to having an understanding of what the costs are for stage 2B, I'm sure they will come to the Commonwealth and we again will talk constructively with them about what we know is a very important project for the ACT.

"Let's do it properly."