Big Build: where the numbers actually come from" style="width:100%;height:auto;display:block;margin:0 0 1.6em 0;border-radius:4px;" loading="eager" fetchpriority="high" srcset="https://vicpolicenews.com.au/wp-content/uploads/2026/05/big-build-cost-blowouts-1024x683.jpg 1024w, https://vicpolicenews.com.au/wp-content/uploads/2026/05/big-build-cost-blowouts-300x200.jpg 300w, https://vicpolicenews.com.au/wp-content/uploads/2026/05/big-build-cost-blowouts-768x512.jpg 768w, https://vicpolicenews.com.au/wp-content/uploads/2026/05/big-build-cost-blowouts-1536x1024.jpg 1536w, https://vicpolicenews.com.au/wp-content/uploads/2026/05/big-build-cost-blowouts.jpg 1600w" sizes="(max-width: 780px) 100vw, 780px" />
Numbers are the heart of any infrastructure story. On the Victorian Big Build, the numbers move. They start in business cases, get anchored in budget papers, then drift over the project’s life. The drift is rarely covered in a single document; it is instead spread across Auditor-General reports, Parliamentary Budget Office assessments, and ministerial statements. Our newsroom’s chief courts reporter, Eliza Hartman, has spent the last year reading those documents end-to-end. This piece sets out where the cost figures actually come from.
What follows is not a complete catalogue. It is a guide to the published material that matters most, and to the governance mechanisms that determine when and how a cost figure changes.
Metro Tunnel
The Metro Tunnel project’s original 2016 business case carried a headline figure of $10.9 billion. The Victorian Auditor-General’s Office reviewed the project in 2021 and identified upward pressure on that figure across several risk categories, including station fit-out, systems integration and the contingency drawdown rate.
By the time the project approached its operational date, the public figures had moved north of $13 billion, and subsequent ministerial announcements have referenced figures higher again. The Auditor-General’s report did not allege impropriety. It described a pattern in which scope additions were absorbed into contingency rather than itemised, and in which the public-private partnership risk-sharing arrangements had been re-cut after financial close in ways that shifted residual cost back to the state.
West Gate Tunnel
The West Gate Tunnel project began as an unsolicited proposal from the toll-road operator Transurban. The original cost estimate sat around $5.5 billion. The Auditor-General’s 2020 report on the project described, at length, a multi-billion-dollar variation arising from contaminated soil disposal — soil that had been on the project site for decades and that the Auditor-General considered had been foreseeable at the contracting stage.
The contract structure for West Gate Tunnel allocated some risks to the private operator and some to the state. The dispute over contaminated soil reached commercial-in-confidence settlement, with the public cost ultimately approaching $10 billion. The Auditor-General was unable to publish the full cost-allocation detail because of contract confidentiality clauses, a limitation the office described as restricting its scrutiny.
North East Link
North East Link was originally costed in business-case material at around $15.8 billion. Subsequent budget papers have moved that figure upward, with the most recent published estimates approaching $26 billion. The Auditor-General’s reports on North East Link have focused on the early-works contracts let before the main tunnelling contract was finalised, and on the way scope was scoped before a complete business case was on the table.
The pattern is the same as on Metro Tunnel and West Gate Tunnel: a published headline figure, signed-off Project Definition Plans, scope and risk movements that emerge in audit reports years later, and a final figure that is materially larger than the one used to win political approval at the front end.
Suburban Rail Loop
The Suburban Rail Loop, particularly its first stage from Cheltenham to Box Hill known as SRL East, has attracted the most pointed external critique. The Parliamentary Budget Office, an independent office of the Victorian Parliament, published a costing assessment that questioned the methodology used in the project’s business case. The Parliamentary Budget Office identified several optimistic assumptions, particularly in benefit-cost ratio calculations and value-capture revenue.
The Victorian Auditor-General has separately reviewed the project’s business case and made similar observations. The Commonwealth Government, which is contributing to the project, has at various points placed conditions on its contribution that reference the same concerns.
The state-government response has been that the SRL East project is a multi-decade investment whose benefits will only be realised over a horizon longer than a typical business case. That position is defensible as a matter of public-economic argument. It does not, however, satisfy the Auditor-General’s and Parliamentary Budget Office’s specific critiques of the assumptions in the business case.
The role of Project Definition Plans
A Project Definition Plan, or PDP, is the document that locks scope, schedule and budget for a major project. PDPs are signed off at ministerial level. Once a PDP is approved, the figure in the public budget papers is anchored to it.
The mechanism that creates the cost-drift problem is that PDPs can be varied. Variations can flow from genuine scope changes, from risk events, or from ministerial direction. Variations are not always reported back through the same scrutiny that approved the original PDP. The Auditor-General has, across several reports, recommended a more transparent variation-tracking regime. That recommendation has not yet been fully implemented.
Ministerial direction and transparency
Under the Project Development and Construction Management Act and associated frameworks, the responsible minister has discretion to direct that work on a major project proceed in particular ways. Ministerial direction is not, of itself, improper. It is part of the executive’s role.
The transparency question is whether ministerial directions that have material cost consequences are being recorded and reported in a way that lets the parliament and the public see them. The Auditor-General’s reports have noted instances in which directions of consequence were not visible in the documentation provided to audit. The Open Courts Act and freedom-of-information frameworks do not always reach into the contracting space where these decisions sit.
What other states do differently
Other Australian states use slightly different governance models. New South Wales runs Infrastructure NSW as a statutory advisory body that publishes business cases and scope documents earlier in the project life-cycle. Queensland uses a similar arrangement through Building Queensland. Both models attract their own criticism, but both publish more material at the business-case stage than Victoria typically does.
The Commonwealth’s own Infrastructure Australia process, which assesses projects seeking federal funding, requires a published business case at a defined methodology. The Commonwealth has, on more than one occasion, declined to fund Victorian projects until business-case material met that standard.
None of those alternatives is perfect. What they collectively suggest is that the Victorian model — in which the most consequential numbers are set inside government and only become public after the fact — is at the more opaque end of the Australian spectrum.
Why this is an integrity story
Cost blow-outs are not, on their own, evidence of corruption. Big projects are hard. Optimism in business cases is a known phenomenon and is documented in Australian and international research literature. What turns cost blow-outs into an integrity story is the combination of large numbers, weak public visibility of how those numbers move, and an operating culture — described by IBAC across Watts, Daintree and Sandon — in which procurement and ministerial-office discretion have been found wanting.
Our newsroom watches the published reports. We do not allege wrongdoing where none has been found. We do report what the Auditor-General and the Parliamentary Budget Office have actually said, and we will keep reading the next ones as they are published.
If you have information that ought to be in a statutory body’s hands, the Victorian Auditor-General’s Office, the Independent Broad-based Anti-corruption Commission, and the National Anti-Corruption Commission all publish guidance on how to make a disclosure under formal protection.
