Overhead power lines at the south end of Anzac Parade needed to be placed underground, which could be carried out only by power company Ausgrid. However, Mr Noonan said Acciona and other parties involved in the project were still trying to complete the line in December 2019 by mitigating the impact of having to shift the overhead wires. Loading Acciona is suing the government for $1.1 billion for allegedly failing to reveal that it had not secured the agreement of Ausgrid on how crucial cables under the route should be handled. Mr Noonan said Acciona now expected the cost of constructing the line from Circular Quay to Randwick and Kingsford in the city's south east to be about $1.8 billion, up from its original estimate of about $870 million. So far, the company has spent about $1.45 billion.

While the government insists the cost to the state of the project, which includes building the line and operating trams, will be $2.1 billion, the final bill to NSW taxpayers will not be known until the outcome of Acciona's legal action against Transport for NSW. Acciona claims changes to Ausgrid's guidelines for dealing with utilities under the route of the line shortly after the public-private partnership contract was signed in 2015 had resulted in it warning of a 865-day delay – or two years and four months – to construction. Acciona Australia managing director Bede Noonan fronts the parliamentary inquiry into the light rail project. Credit:Mick Tsikas “The changes that were delivered by Ausgrid were a complete game-changer for the project. It was debilitating for the project,” he said. He apologised for the delays and disruption to businesses and residents, which he blamed on the underground utilities and about 60 scope changes to the project.

Mr Noonan said the utilities risks were “vastly misunderstood by the government”, and Acciona began warning Transport for NSW of the risk of delays to construction in March 2015, just a month after financial close on the contract. Later, in May 2015, it warned formally of the risk of delays. Loading Acciona has provided about 40 monthly updates on the state of the project to transport officials since construction began in 2015, about half of which Mr Noonan confirmed warned of delay risks. “We had not withheld any information from the government in relation to time in any shape or form,” he told the inquiry on Thursday. The changes to the scope of the project included upgrading a levee beside Alison Road at Moore Park to a dam and changing tram stops beside the Queen Victoria Building in Sydney's CBD. The majority of the scope changes were at the direction of the government, Mr Noonan said.

Acciona estimates the cost of the scope changes at about $426 million, and the company has since made about $95 million in claims under the Security of Payments Act for costs against ALTRAC, the consortium responsible for the overall delivery of the project. Mr Noonan outlined the extreme difficulties posed by underground utilities and storm-water drains in confined zones, and having to deal with regulatory authorities. In one example, a pit for utilities on George Street had to be enlarged from 4 metres to 10 metres. “It's [why] you see sections of George Street sitting idle for three months, frustrating everybody,” he said. Transport for NSW deputy secretary Stephen Troughton said the cost of the project to the state was still $2.1 billion but conceded that the final price tag would not be known until the legal action pursued by Acciona was resolved. “What it costs [Acciona] and what they are entitled to are far, far different things. It’s not about what they have spent, it’s what they are entitled to,” he told the inquiry.

But Labor leader Luke Foley said he would launch a judicial inquiry into the project if his party won the state election in March, claiming the public had been “repeatedly lied to” about the delays and cost. Under questioning from the Opposition, Mr Troughton repeatedly said the transport agency was sticking to a completion date of March 2020 despite the official notice from the builder of May 2020. Construction delays, cost blowouts and legal action have dogged the light rail project. Credit:Louise Kennerley “Their program of May 2020 has been rejected by Transport for NSW. At the moment I am sticking by March 2020,” he said. “We are working with them to understand what is achievable [in reaching an earlier opening date].” He declined to say whether he had issued a default notice to the ALTRAC consortium for the problems that have dogged the project, saying such a matter was commercial in confidence.