Work on stage two of Canberra's light rail system could begin next year and include three new stops in the city and raising London Circuit, the ACT government says.
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Chief Minister Andrew Barr and Transport Minister Chris Steel said Cabinet had approved the business case for the 1.7km light rail stage 2A from Alinga Street station to Commonwealth Park.
Commercial negotiations with Canberra Metro have now formally begun.
The expected cost of the project will be withheld until commercial contracts have been finalised, with a redacted business case to be released on Tuesday.
The government says it expects to sign contracts by mid next year.
The new section of the route is expected add about six minutes journey time each way.
The stage 2A extension of the current network will add three new stops at City West, City South and Commonwealth Park.
London Circuit will also be raised to the same level as Commonwealth Avenue, which the government says will provide a southern gateway for the CBD.
The ministers said it would enable better walking, cycling and public transport links between the CBD and the Acton waterfront.
Work on the stage was expected to begin any time from late next year to early 2021, depending on the approval process with the federal government.
The line would not be ready to take passengers until about 2024.
"The stage 2A route through London Circuit West and Commonwealth Avenue provides access to residential areas, business precincts, the ANU, the Canberra Visitors Centre, entertainment and retail areas, through to the designated transport corridor to Woden," Mr Steel said.
"This provides a once in a lifetime opportunity to connect London Circuit with Commonwealth Avenue at the same level, providing an access point for a light rail line but also to provide better connections for walkers and cyclists through the waterfront."
Mr Steel foreshadowed significant disruption to commuters and businesses during the construction stage.
He said consultation with businesses around the city west precinct had already begun.
Stage 2B would link Commonwealth Park to the Woden Town Centre once approvals were granted.
The government is predicting stage 2A will add an extra 2500-3000 passengers a day within the first operating year. It also expects the City West stop to be one of the most popular stops on the system.
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