MCG blowout hits $40 million

Contract claims could blow the MCG redevelopment budget by tens of millions of dollars.

As the landmark project enters its final months, construction giant Grocon and the Bracks Government are at loggerheads over the price of progress.

The publicly stated budget for rebuilding the northern half of the 'G is $434 million.

Project sources told the Herald Sun that Grocon's contract was closer to $410 million.

But the builder has lodged claims of about $40 million for extra resources it says it had to commit to ensure the stadium would be ready for the Commonwealth Games in March.

Grocon argues that issues beyond its control, including union disputes and design changes, would otherwise have added months to the January 31 completion deadline.

"Grocon is saying that they took the decision to escalate work to get back on track for the Games, and it's only fair they get paid for that," a source said.

Court action remains an option if talks fail.

The Government has already paid $77 million towards the cost of rebuilding the MCG -- the centrepiece Commonwealth Games project.

In addition, it is legally bound to pay any costs above $450 million.

Blowouts below $450 million fall to the Melbourne Cricket Club and its members, who are already paying the lion's share.

The Bracks Government has agreed to indemnify the MCC if the club cannot raise enough cash to meet its commitments.

The Government's $77 million is part of its official $697 million Games budget.

Given that galloping security costs have already made a mockery of the latter figure, the Government is anxious to contain spending and is pushing the MCG project team to resist Grocon's claims.

Commonwealth Games Minister Justin Madden said the Government was confident it would not have to increase its MCG contribution.

The January 31 completion deadline is just six weeks out from the Commonwealth Games opening ceremony.

MCG Trust chairman John Wylie, the government-appointed chairman of the project steering committee, and MCC chief executive Stephen Gough, the project director, said the $434 million budget and works schedule were both on target.

"We and Grocon have continued to meet on this project for over 3 1/2 years," he said.

"There is nothing that is outside the normal contract discussions, and they will continue."

Grocon chief Daniel Grollo would not comment.

Work began to transform the MCG after the 2002 AFL Grand Final.

The Olympic Stand is the final stage, following replacement of the Ponsford Stand and MCC Members Pavilion.

Mr Gough said capacity for the 2005 Grand Final was on track for 95,000, continuing the record of meeting targets.

"It's tracking very well -- in some parts it's ahead of schedule," he said.

"Probably one of the greatest things is we've continued to operate the stadium with a (home-and-away) capacity of around 70,000 and continued to build it to reach the ultimate target of completion for the Games," he said.

"From that point of view, all of the little issues that affect any project have been well met by both parties."

A $20 million rubber athletics track will be laid after the Grand Final.

The Commonwealth Games organising committee takes over the MCG on February 14.

On February 18, the 'G will host an athletics test event.

The Melbourne 2006 opening ceremony is on March 15 -- just 210 days away.