Victorian ICT Projects Plagued by $1.25 Billion in Cost Overruns and Delays

Victorian government information, communications, and technology (ICT) projects have incurred over $1.25 billion in cost overruns and significant delays over the past decade.

An analysis of 1,035 completed and 211 current projects revealed that approximately 40% exceeded their initial budgets, and about 61% experienced delays or are projected to finish late. These figures are notably higher than those identified in a 2015 Victorian Auditor-General's Office (VAGO) analysis.

Cost Overruns and Delays Mount

The total cost overruns reached at least $1.26 billion, with $795 million from completed projects and $470 million from ongoing initiatives. Projects experienced an average delay of 10 months for completed initiatives and over 14 months for current projects. While COVID-19 was cited as a contributing factor in $51.8 million of these overruns, the scale of the problem is extensive.

Key examples of significant overruns include:

• The new ticketless public transport system, intended to replace Myki, is $137 million over its initial budget, a 25% increase, with completion now expected mid-next year.
• A Department of Families, Fairness and Housing data sharing project, completed in 2022, cost $91.4 million, a substantial increase from its initial $7.1 million budget.

Expert Observations and Accountability Concerns

Richard Fulford, a senior lecturer at Edith Cowan University, described the budget and time increases as "alarming." Professor Mark Gregory of RMIT University suggested that the data indicates "a lack of accountability" within government departments.

Project Status Reporting Under Scrutiny

The state government's IT Dashboard, established in 2016 following a critical VAGO review, uses a self-reported 'traffic-light' rating system (green, amber, red) to indicate project status. The latest quarter recorded 28 "red" (off-track) projects, the highest number since the system's inception.

However, Dr. Fulford questioned the consistency of these ratings, noting instances where projects with significant delays and budget increases were rated "green" without detailed explanations. Examples of questionable "green" ratings include:

• The Department of Justice and Community Safety's (DJCS) Road Safety Camera Program, which saw a three-year delay and budget increase but was rated "green."
• The DJCS Better Technology Tools Enabling Responsibility (BTTER) program, which is six years late with a nearly tripled budget of $54 million, also received a "green" rating.
• The new ticketless public transport project has consistently been rated "green" despite known budget and timeframe increases and reported contractor disputes.
• A problematic Greater Western Water billing project, which caused issues for thousands of customers, was completed with a "green" rating after an earlier "red" status.

Department spokespersons offered explanations for some of these ratings, stating that updates to the Road Safety Camera Package were due to COVID-19 delays and additional initiatives. They noted BTTER's rollout expanded to more locations, and the ticketless transport technology rollout must account for network changes. Greater Western Water reported its project was rated green upon going live.

Dashboard Limitations and Recommendations for Improvement

Dr. Fulford highlighted a major limitation: the dashboard primarily monitors the setup costs of IT projects, which VAGO's 2015 report indicated represents only 24% of total IT expenditure, with operational costs making up the majority. He further stated that the dashboard does not provide sufficient information on project benefits to determine value for money, describing the benefit categories as "vague."

Professor Gregory also noted the dashboard's omission of contractor details, which he believes hinders accountability. Experts have called for greater transparency and improved oversight:

• Dr. Fulford suggested structural changes, advocating for centralized management of IT projects instead of individual departmental oversight.
• Professor Gregory recommended including contractor information in the dashboard, implementing ongoing external audits, enhancing initial project planning to minimize scope changes, and re-tendering projects if scopes change significantly during development.

Future VAGO audits proposed for 2026-27 will scrutinize additional projects, including a Court Services Victoria (CSV) case management system ($135 million, red/amber since 2021) and a DJCS fines management system (delivered 2020, which saw "red" ratings during development due to vendor performance issues).