Exactly. The total CRR cost being used by the Government now is not being disclosed in some great move for transparency, it was done purely to create the biggest dollar figure possible to completely erroneously compare to the previous Government’s stated CRR cost.
Great. So they have already been disclosed for and in a level of detail that allows them to be understood and scrutinised. Rather than some vague total cost with unclear scope and parameters.
So the car dealer is responsible for the running costs of the car over its lifetime? Where do you draw the line? Car cleaning? Tolls? It makes no sense.
No, they are telling you how much it will cost to purchase that product they are selling. Much like it works for all products and services…
When I purchase groceries should the supermarket tell me how much it will cost to cook it?
Or for new clothes, the cost of washing and maintaining them?
Discounted cash flows (DCF) is a core finance principle, and is relevant for PPPs.
This is a PPP, not a traditional project. So we cannot ignore that future availability payments stream that the Queensland Government has promised to pay (“operational costs”).
Currently CRR is a mix of public and private financing. Suppose the private financing component of CRR were increased to 100%. Under the approach you’ve suggested @ClevelandLine tunnel would appear to have zero cost. I would suggest that’s the absurd result.
The Auditor-General of Queensland is an independent agency. Even if we were to go with the QAO report’s lower figure of $12.4 billion, that is still a large 2x cost increase on Red Team’s $6.3 billion (year 2023) figure mentioned earlier in this thread.
The $19 billion figure in Ministerial Media Releases probably has a mix of various things that should or shouldn’t be there, but setting that to one side for a moment - the basic cost does seem to be at least $12.4b.
If we are to quote figures different from the independent QAO, then naturally, we’ll have to explain the variation between our figures and theirs. IMO from what I have read, the PPP availability payments over the 25 year duration should be incorporated because these are real cash outflows.
If there are still questions about what the QAO has published, then I would recommend contacting the QAO asking them for more information on how they arrived at their figures and what was included in them.
Independent Check
As an independent check, you could also perhaps use the Sydney Metro as a comparison. This has a construction cost of about ~ $1 billion/km. CRR is 10.2 km line, so you would expect the ballpark figure to land around $10.2 billion. This figure is in close agreement with the QAO core project figure of $12.4 billion.
In the next post, I’ll publish the output when I put this question to ChatGPT.
Query
When assessing what the cost of the cross river rail project is, does it make sense to include or exclude the PPP availability payments that are to be paid over the 25 year period?
The interesting bit from the response:
Strict build-only costs do not represent full real-world costs or budget impacts
Recommendation to present both figures (which is essentially what the QAO has done).
ChatGPT Response:
Short answer: it depends on what question you’re trying to answer.
But for most policy and value-for-money discussions, you should include PPP availability payments (in present-value terms)—while for capital cost discussions, you usually exclude them.
Below is a clean way to think about it, using Cross River Rail as the example.
1. What are PPP availability payments?
Availability payments are:
Regular payments made by the public sector (here, the Queensland Government)
Over ~25–30 years
To the private consortium (e.g. PULSE)
In return for design, construction, financing, maintenance, and asset availability
They are not just “operating costs”—they embed:
Capital repayment
Financing costs
Lifecycle maintenance
Risk premiums
Private return on capital
2. When it does make sense to include availability payments
You should include them (discounted to NPV) when the question is:
“What is the true long-run cost to taxpayers?”
Because:
Availability payments are real cash outflows
They represent the price of procuring the asset via a PPP
Excluding them materially understates fiscal impact
This is the correct framing for:
Value-for-money analysis
Intergenerational equity
Comparisons with public-sector delivery
Budget sustainability discussions
In PPP economics, the Net Present Value (NPV) of availability payments is effectively the economic cost of the project.
3. When it does make sense to exclude availability payments
You can reasonably exclude them when the question is:
“What was the construction / capital cost?”
Here, people are usually referring to:
Tunnels
Stations
Rail systems
Civil works
In that case:
You quote the capital cost at completion
Availability payments are treated as a separate financing/operations stream
This framing is common in:
Engineering discussions
Media headlines
Comparisons with other projects’ build costs
But it is not a full economic cost.
4. The common mistake (and why debates get messy)
A frequent error is:
“Cross River Rail cost $X billion”
while excluding availability payments,
and then
“PPP is cheaper”
That comparison is invalid unless:
Availability payments are included or
A like-for-like public financing model (including debt servicing, maintenance, and risk) is also modelled
In other words:
Capital cost ≠ taxpayer cost
PPP cost ≠ construction cost
5. Best-practice answer (the one Treasury prefers)
The most defensible approach is to report both, clearly labelled:
Measure
Include availability payments?
Purpose
Capital / construction cost
No
Engineering & delivery
NPV of PPP payments
Yes
Fiscal & economic impact
Whole-of-life cost
Yes
Value for money
Budget headline (cash)
Yes
Actual taxpayer outlays
Bottom line
Exclude availability payments → if you are strictly talking about build cost
Include (NPV of) availability payments → if you are talking about what the project really costs taxpayers
If you want, I can:
Walk through a worked example (PPP vs public delivery)
Help you frame a clear one-paragraph explanation for policy or public debate
Or show how this issue played out in other Australian mega-PPPs (Sydney Metro, WestConnex, etc.)
My 2c, the Cross River Rail project now sits at $12.4 billion, including at least $2.6 billion in ongoing operations that did not form part of the original capital cost as well as $X billion in private financing, with the total program administered by the Cross River Rail Delivery Authority valued at approximately $19 billion.
I read through the QAO report the other day after it was posted and I think the brevity of it does come with some loss of clarity. It would be quite a task to try and cross reference the individual projects that are in CRRDA’s authority, particularly noting that the QTRIP is currently listing some projects as vaguely CRR additional works, and also listing projects that may or may not be core projects as delivered by CRRDA or delivered through a PPP arrangement. This is on top of Blue Team’s new approach to QTRIP of not actually assigning a budget amount publicly until after procurement is finalised.
It’s important to note how each of the different types of reports that the QAO produces are prepared. In this instance they state:
Data analysis
We analysed the publicly available data from the published capital budgets from 2021–22 to 2025–26 to form insights and make observations.
So the figures they are quoting are not independently financially audited. They’re compiled from what the CRRDA and Government publish.
I’m not saying QAO would accept them if they thought they were completely false but they aren’t audited figures.
I would suggest our response would be along the lines of:
A) We note the CRR figures have changed over the years showing an escalating costs but also recently including additional projects previously separately costed.
B) It isn’t possible for us to verify these. We call for full transparency on the breakdowns of the cost and reasons for changes in detail.
C) The main focus needs to be getting CRR complete and operational and maximising the value of it by sensible improvements to frequency across the network. However many billions the true cost is they mustn’t go to waste!
If anyone asked us, the answer I would want to give is ‘We don’t know, because the reporting has changed without enough transparency to be able to make a fair comparison’. We don’t have to know the answer to know the government is playing political games.
Like CRR don’t governments package in other projects for funding purposes. Similarly how Councils get away with not paying for sewage upgrades and streetscaping.
When they do this it seems to blow out the timeline of the project as they have added mini projects onto the main project. But as a funding model it’s quite smart.
It’s absolutely a political game because they are fudging the numbers to back up their claims of an ‘extreme cost blowout under Labor’. Politics at its worse. Yes, there have been incresses; no, it’s not as bad as they make it out to be.
I would agree with @mocon31. A $12.4 billion for the CRR project seems reasonable based on multiple approaches that give figures that cluster around this ballpark (see below). Note that the initial costing for CRR was around $5.4b.
Given that getting actual granular breakdowns of CRR figures might not be possible, a workaround is to look at comparable AU or NZ city rail tunnel projects and pull out an expected construction value for CRR.
Rough Estimations
Sydney Metro - $1 billion/km x 10.2 km = $10.2 billion
Auckland City Rail Link (CRL) = AUD $1.3 billion/km x 10.2 km = $13.26 billion
Melbourne Metro Tunnel = $1.49 billion/km x 10.2 km = $15.1 billion
Based on this method, a $5-$8b figure for CRR is likely to be a very substantial underestimate of the true cost of CRR. And the QAO core project cost figure of $12.4 billion is sitting within the range given by the comparable Sydney, Melbourne and Auckland rail tunnel projects.
All of these estimates and interpolations are coming far above a $5-$8b figure for CRR.
Conclusions
Does there exist a cost blowout? - Yes.
If there is a blowout, is it large? - Yes. It seems far above the initial project cost estimate of $5.4 billion.
Importantly, it is worth noting that all three reference projects in Sydney, Melbourne, and Auckland also suffered significant cost blowouts. This suggests that project management was only one of many factors that resulted in large cost escalations.
In the end, CRR is going to open a bit late and with higher costs, but the important thing is that it will be finished and we will have it.
Notes
Melbourne Metro Tunnel - $13.48 billion / 9 km = $1.49 billion/km unit cost
Auckland City Rail link (NZ) - $5.5 billion / 3.5 km = NZD $1.57 billion/km unit cost or around AUD $1.3 billion/km
I’d probably caveat that I answered your question with what I think the number should be if pressed on it. The answers that @rowangray and @ClevelandLine gave are better in the first instance, because by now the point shouldn’t be the cost as much as the opaque way that both sides have been presenting, and ensuring that what we get is the best we can get.
If we’re talking about $12~13 billion for a very neutered project that will still require a lot of bad compromises across the entire network…
Yeah nah mate. Good luck trying to make this pass the pub test.
The southern portal is in the wrong place, the northern portal ends up at a station with bad connections (and then to another station that’s even worse!), and both sides of the new Sector 1 will still have major choke points in terms of level crossings, lack of fourth tracks, non-compliant platforms, etc, etc.
I hate to compare, but once you get to experience the Metro Tunnel in Melbourne you realise how well thought out (I do miss a station at South Yarra though) and easy to understand the new project is.
It genuinely hurts to see.
Sure, we’re getting a new tunnel… But one that solves very little.
“What is the true long-run cost to taxpayers?”
“What was the construction / capital cost?”
No