Melbourne F1 grand prix redevelopment costs blow out over asbestos discovery

Updated March 4, 2026 — 5:23pm,

Victorians are on the hook for an extra $115 million to rebuild the Formula 1 pit facilities at Albert Park after asbestos was discovered in the existing building – pushing the total cost of upgrades to $395 million.

The state government agreed to the pit redevelopment in 2023 as part of negotiations with Formula 1 owners Liberty Media to ensure the Grand Prix stays in Melbourne until 2037.

Large trees were felled around the existing pit building last year to prepare for the redevelopment. Joe Armao

Victorian taxpayers also paid $100 million in both 2023 and 2024 to cover the shortfall in revenue from staging the race, raising questions about the state’s value for money from the event.

Demolition of the existing pit building is set to begin shortly after this year’s event finishes on Sunday, followed by two years of work to build new garages, a media centre, community sports facilities and an expansion to the exclusive $6000-a-head Paddock Club.

But a report by the Victorian Auditor-General’s Office released on Wednesday revealed that in June last year, those in charge of the project discovered “the widespread presence of asbestos-containing material … throughout the project site”.

“In August 2025 due to the cost and program impacts of remediation … the managing contractor submitted its WMP offer at $395m which exceeded the Target WMP by $115m,” the report said.

Asked to clarify its report – which was based on a survey provided to government agencies – the auditor-general’s office told The Age that “WMP” referred to a “waste management plan”, meaning that the $395 million bill for cleaning up the site was in addition to the cost of the construction works. That was also confirmed by a government spokesperson.

However, after the publication of this story, the auditor-general’s office and the government told The Age that “WMP” in fact referred to “warranted maximum price” – the project’s overall cost, which had increased by $115 million.

The report also warned the asbestos discovery presented “significant budget and program challenges” and will require Victoria to reconsider the cost of the project’s budget.

“The project team is assessing value management options however it is likely that these will result in breaching the AGPC [Australian Grand Prix Corporation] contract with F1 and/or not delivering scope previously announced by government,” it says.

Peter Logan, from the Save Albert Park group, said the additional cost to Victoria was a disgraceful waste of money to host an event that degraded one of Melbourne’s finest assets.

“They just can’t stop, they can never say enough is enough,” he said. “It’s a huge waste of money because the revenue – not even the profits – will be going straight to Liberty Media.”

Logan said the race locked Melburnians out of Albert Park for three weeks, with another four months of heavy trucks and machinery on site to prepare for and then pack down the event.

“Albert Park is key to Melbourne’s identity as a place with beautiful parks. It’s like Central Park to New York. [But] it’s just disappearing,” he said.

Several large trees were cut down near the existing pit facilities last year to prepare for the redevelopment.

The Australian Grand Prix Corporation – which is chaired by former Andrews government major events minister Martin Pakula – referred questions to the state government. The state government was contacted for comment.

Opposition major events spokesman David Southwick accused the government of keeping the overrun secret despite knowing about it since last year.

“The Grand Prix is a proud event on our state’s calendar, but under [Premier] Jacinta Allan, Victorian taxpayers are the ones being taken for a ride,” he said.

The auditor general’s report on Wednesday also raises concerns that Victorians are being kept in the dark about cost blowouts and delays in the state’s $212.7 billion infrastructure program.

It found that budget papers and other government documents do not “always give complete information on major projects’ progress and significant variations to cost, time, scope and benefits”.

The criticism comes as the Allan government is already under intense pressure over mismanagement of the Big Build, including the criminal infiltration and corruption in the CFMEU and broader industry.

The Age on Wednesday revealed a secret Victorian ombudsman briefing warned that the Victorian Infrastructure Delivery Authority, which oversees the Big Build, is exposed to corruption because it fails to keep adequate records about how it spends taxpayer dollars.

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CORRECTION

An earlier version of this story incorrectly stated the cost of the Albert Park pit building redevelopment had increased by $395 million. The cost has increased by $115 million.