Victorians bear more cost blowouts to public projects

Victorians face growing budget overruns in more than 100 government school and public transport upgrades, office refurbishments and rectification works costing millions more.

The state government updated its guide on cost escalations in January 2023 to address the volatility in construction project input costs, according to a Department of Treasury and Finance briefing note obtained by the opposition under Freedom of Information.

The guide, released on Thursday, was developed in response to ongoing blowouts across infrastructure projects in Victoria but a government spokesman has said it was not extended beyond December 2023.

Among the increases, which have seen costs balloon by hundreds of millions of dollars, is a $6.3 million blowout for the design and construction of a new glasshouse to replace three dilapidated ones in Horsham.

The Ballarat railway station upgrade blew out more than $4.3 million, an extra $1.5 million was required for security upgrades at Horsham Magistrates Court and more than $1.4 million to upgrade the outdoor facade of a government building in Geelong.

Victorian Premier Jacinta Allan
Premier Jacinta Allan defended Victoria's program of infrastructure projects. (Joel Carrett/AAP PHOTOS)

Minor works on the deputy premier's office saw costs escalate by $176,000 while an extra $100,000 was needed for a refurbishment of the police commissioner's office and $636,000 on emergency and exit lighting upgrades at government offices.

The brief also identified that the government's major infrastructure pipeline contributed to the increases in costs.

Opposition finance spokeswoman Jess Wilson warned financial mismanagement had consequences for which Victorians are now paying the price.

"This new blowout guide is an admission Labor cannot manage money and has lost control of delivery of projects of all sizes," she said.

Premier Jacinta Allan said the documentation was responding to the COVID-19 pandemic affecting supply chains and constructive costs.

"That is why some advice needed to be provided to delivery agencies through that period of time," she told reporters on Thursday.

"What we have here in Victoria is a huge program of works and the vast majority of those works are on time and in budget."

Ms Allan said painting was completed on the deputy premier's office in 2023 and was not aware if other works were done.