ORANGE City Council has rejected suggestions the state government could be left holding the bill if the $47 million Macquarie Pipeline goes over budget.
The federal and state governments entered into a national partnership agreement last year to secure the funding contributions of all tiers of government: $20 million from the federal government, $18.2 million from the state and $8.8 million from the council.
According to the implementation plan, the “State bears all risk should the cost of the project exceed the estimated costs”.
Orange Ratepayers Association vice president Cyril Smith said the agreement meant the state government would be held responsible if the budget was blown.
With the approval of the project in the hands of the NSW planning department, Mr Smith said it should be up to them to pay the difference.
“If they’re going to say it’s a good project they should be prepared to back it,” he said.
“Everyone expects that it will go over budget.”
Mr Smith said the ratepayers group had raised the point with Member for Orange Andrew Gee.
But spokesman Nick Redmond said the council would carry the cost if the project cost more than expected, not the state government.
“All the funds go through the state. It’s a trickle down thing. The federal government provides money to the state and the state provides money to the council. The only agreement we’ve got is with the state,” he said.
Conversely, the agreement between the two tiers of government says the “State will not be required to pay a refund to the Commonwealth if the actual cost of the project is less than the agreed estimated cost of the project,” suggesting the state government could retain any money left if the pipeline costs less than $47 million.
Mr Redmond said the council would negotiate with the state government about what to do with any leftover money when the project was finished.
With all 10 companies interested in building the pipeline confident they can do it for $47 million, Mr Redmond says it is unlikely the project will go over budget.
But Mr Smith said the council was overstating their position, with the project unable to be fully costed until all assessments on the final route were completed.
Councillors were expected to agree to call for tenders for the project at last night’s council meeting.
Mr Redmond said the tenders would be the “best test” to prove the project could be done on budget.