NEW South Wales Auditor-General, Mr Peter Achterstraat, yesterday released his report on government expenditure and transport planning for the implementation of the Barangaroo project.
The controversial $6 billion Barangaroo project, to be undertaken by Lend Lease on 22 hectares of government-owned land at Sydney Harbour foreshore, includes the construction of a hotel, office towers, apartment buildings and retail shops, as well as a new park and public waterfront.
The Auditor-General examined two key issues that it said would contribute to Barangaroo's success: expenditure on the precinct's public domain being at no cost to government; and transport planning solutions for moving the significant number of additional CBD commuters.
The Auditor-General concluded that while there was extensive transport planning and extensive documentation supporting government financial forecasts, considerable risks remain for the implementation of the Barangaroo project.
"The success of Barangaroo depends very much on people being able to get there and leave with ease," said Mr Achterstraat.
"Wynyard station is nearing capacity and will need to handle many more commuters. Transport solutions for the CBD need to be started and completed on time", he added.
Sixty three per cent of Barangaroo commuters are expected to come by rail in the morning peak. Wynyard station will need to handle a predicted increase of 3,900 Barangaroo commuters daily from December 2013, growing to 14,300 in December 2023.
With developer contributions expected to provide for public domain and other government development costs, the report said there were risks developer contributions may not meet the government's forecast, as a significant amount is based on future market values of the developer's buildings.
"Barangaroo's financial forecast has not been comprehensively revised since December 2009. An update is especially important as the project enters its construction phase," Mr Achterstraat said.
The report finds that some public expenditure is not included in the Barangaroo Delivery Authority's financial forecast, including the cost of the Barangaroo Pedestrian Link ($186m), three ferry wharves at Barangaroo ($45m estimate) and the fit-out of the cultural space within the Headland Park (yet to be estimated).
"A lot needs to be done before the Barangaroo precinct is successfully completed", added Mr Achterstraat.
The audit concluded that while there has been extensive planning in support of the government financial forecast and transport solutions for Barangaroo, there are three key risks that could limit Barangaroo's success:
- Developer contributions to government being different to those forecast;
- The cost of public domain constructed by government being greater than estimated; and
- Planned, and necessary, transport solutions not started and completed on time by government.
NSW Planning and Infrastructure Minister, Brad Hazzard, welcomed the Auditor General's report on Barangaroo, saying it highlighted issues the previous Labor government failed to address in government.
The Minister recently announced a 'short-sharp review' of the Barangaroo project, and said the report confirms that such a review is needed.
"I will be working with my colleagues, including Transport Minister, Gladys Berejiklian to address the issues necessary to make the outcome of Barangaroo the very best," Mr Hazzard said.
"In addition to its current review, this government has already increased consultation with Lend Lease and other interested groups on the way forward."