Media release
FROM THE OFFICE OF THE SECRETARY
20 November 2014
RELEASE OF COSTING OF ELECTION COMMITMENT
Pursuant to section 6.45 of the 2014 Guidelines on the Caretaker Conventions the Department of
Treasury and Finance (DTF) today released the costing of the following election commitment of the
Australian Greens, Victoria:
Greens 002 – 50 new trams to fix overcrowding
The election policy costing was completed in accordance with DTF’s Guidelines for managing
requests from a political party for costing of its own policies (the policy costing guidelines) available
at: www.dtf.vic.gov.au/election2014.
The completed costing is attached to this media release.
David Martine
Secretary
Department of Treasury and Finance
Consistent with the DTF policy costing guidelines, the contact for Parties requesting DTF costings is:
Mr Ismo Rama
Telephone: 9651 5368
Email: ismo.rama@dtf.vic.gov.au
For media inquiries please contact: Mr Bruce Atherton
Telephone: 0404 097 654
Email: bruce.atherton@dtf.vic.gov.au
Department of Treasury and Finance
1 Treasury Place Melbourne Victoria 3002
Ph: +61 3 9651 5111 Fax: +61 3 9651 2062
Website: dtf.vic.gov.au
Election 2014 – Policy costing
Title: 50 new trams to fix overcrowding
Party making the request
Name of policy
Description of policy
Date of public release of policy
Date of receipt of request
Additional information requested
(including date)
Additional information received
(including date)
Costing methodology used:
 scope of initiative;
 costing techniques;
 policy parameters;
 statistical data used; and
 behavioural assumptions used (as
appropriate).
Greens
50 new trams to fix overcrowding
The Greens will buy an additional 50 trams on top of the 50 already
ordered. We will take up the tram contract’s existing option to fast-track
the trams on order. The Greens’ plan to double the number of trams
being built will expand capacity and cost an estimated $350 million,
including extending the maintenance contract. There may be additional
costs for associated infrastructure.
19 May 2014
13 November 2014
N/A
N/A
DTF has assessed the costing based on pricing in the existing contract.
DTF notes that the Party’s policy envisages accelerated delivery of the
current order. DTF notes that this will involve commercial negotiation
with the manufacturer as the delivery schedule exceeds the current
contract. Therefore DTF has assumed the new order commences as the
existing order finishes and trams are delivered at a rate of 20 per year,
commencing with 5 in 2017-18 and ending with 5 in 2021-22.
In additional to the direct cost of the rolling stock, DTF’s assessment
allows for supporting infrastructure including upgrade of maintenance
facilities, stabling and power needed to support the operation of the
new trams. Infrastructure costs are based on historical averages for past
rolling stock projects, escalated in accordance with historical averages
for infrastructure projects.
DTF has made a separate allowance for technical modifications per unit.
A modest contingency has been applied on all costs for unknown risks,
particularly as the rate of delivery must be negotiated.
The cost of the asset initiative is set out below:
TEI
($ million)
DTF costing of asset initiative
880
DTF comments section
Where relevant, includes separate
identification of revenue, expense, asset
N/A
Title: 50 new trams to fix overcrowding
1
and liability components.
Where appropriate, includes range for
the costing or sensitivity analysis.
Caveats or qualifications to the costing.
Associated material: Copy of request as
received by DTF and any additional
information requested by DTF from
party.
N/A
DTF has not specifically provided for ancillary infrastructure to
accommodate operation of the new trams across the network (e.g.
platform upgrades). However, DTF notes that there is contingency
within the overall cost estimate to address these issues to some extent.
The final impact of these elements will be determined by the fleet
deployment strategy adopted.
N/A
Title: 50 new trams to fix overcrowding
2