Transurban announce West Gate project will not finish until at least 2023

The completion date for the trouble plagued West Gate Tunnel project has been delayed by a year – and even that’s not guaranteed.

Transurban has again pushed back the completion date of the problem-plagued West Gate Tunnel project, saying 2023 is no longer achievable.

The latest delay on the project, which is facing billions in cost blowouts, was revealed as the toll road giant posted another net loss as COVID-19 evaporated traffic flow.

The West Gate Tunnel project, which will eventually link the West Gate Freeway to CityLink via a new toll road, was originally slated to be finished by 2022.

That date was last year pushed back to 2023 by Transurban amid a standoff about how to deal with contaminated soil from the site.

On Thursday, Transurban chief executive Scott Charlton said the project would likely be delayed beyond 2023 as well.

West Gate Tunnel Project’s end date has been pushed back by a year Picture: Ian Currie

“We are progressing towards tunnelling commencement, however at this stage disposal sites participating in the D&C (design and construction) subcontractor led tender process would not be ready to accept tunnelling spoil soon enough to enable a 2023 completion,” Mr Charlton said.

“We remain committed to working with project parties to deliver this much needed project for the Victorian community as soon as possible.”

Mr Charlton said there were significant blowouts on the project but could not speculate on the total cost until they had found a resolution to the dispute.

“You’re looking at substantial cost overruns,” he said.

“Whatever it will be, it will be wrong until we get the spoil site and can see the end game.”

Mr Charlton said there was a “role for everyone to play” in resolving the dispute, including the government.

“I’m not going to point blame at anyone other than to say that we’re very unhappy about the situation, it is not where we want to be,” he said.

“All we’re doing is trying as best we can to resolve the situation.”

When asked about community groups who do not want the tunnel spoil taken to landfill in their suburb, Mr Charlton said PFAS levels would be low and managed properly.

“It’s really up to the Environment Protection Authority, the planning department and the licenced landfill to determine that responsibility,” he said.

Transurban is caught up in a messy legal fight with the project’s builders, John Holland and CIMIC, about who should foot the bill for cost overruns.

The Melbourne-based toll road giant slumped to a net loss of $448m for the six months to December as traffic volumes plunged by close to 18 per cent compared to the same period a year earlier.

Toll revenue from Melbourne’s CityLink dropped 39 per cent to $259m as traffic flow plunged by 47.1 per cent amid the city’s strict lockdown.

Mr Charlton said traffic volumes were picking up in Melbourne and had almost returned to normal in Sydney.

“Pleasingly, traffic in Melbourne improved significantly through the half, with traffic in December down 19 per cent, compared to 66 per cent in August,” he said.

“In markets where restrictions have lifted, for example Brisbane and Sydney, we have seen traffic largely recover to pre COVID-19 levels, however it will remain sensitive to government responses and economic conditions.”

West Gate Tunnel Project works along Footscray Rd. Picture: Ian Currie

In a note to investors, Transurban flagged ongoing legal action as it looks to resolve some of the tensions that have plagued the project.

The consortium building the project, CPB and John Holland, have told the company they want to tear up their contract because of the toxic soil saga that has delayed work and led to cost overruns.

It’s understood they would then seek to negotiate a new contract that would factor in massive cost blowouts.

But Transurban have refused to accept their agreement is invalid and have been locked in Supreme Court legal proceedings and mediation for months.

They have also sought to bring the state government into negotiations by claiming that they have a role to play in settling variations.

The Andrews Government has insisted the dispute is a matter between Transurban and the builders and that they will hold the tolling company to their contract.

“Legal and commercial avenues for resolution of commercial matters and claims are being pursued,” a slide from Transurban’s investor presentation reads.

“Transurban remains committed to working with the D&C subcontractor and the State to resolve the challenges on the project.”

A 2024 completion date will add further cost blowouts to the West Gate Tunnel, with hundreds of staff laid off over the last 12 months as work has slowed down and parts of the project have been completed.

TRANSURBAN ‘FAILED’ VICTORIANS: GOVERNMENT

The Victorian Government have delivered a slap down to till giant Transurban saying they have “failed” the Victorian people.

Transport Minister Jacinta Allan shamed the company on Thursday after the company revealed further project delays.

“They have a contract that it has been signed with the Victorian Government, and the Victorian community to deliver this vitally important project, they have failed on their commitment to the Victorian community. And that is something we take very, very seriously,” she said.

“Transurban have had the best part of three years to get these soil issues resolved.”

Ms Allan denied there were issues with the state’s environment watchdog that had been a factor in the delay and also rejected the assertion that the project was a “quick fix” after they spent more than $1.3 billion paying for the cancelled East West Link contract.

However, she did renew a threat against the multinational company hinting “all options were on the table” to fix the issue.

This includes revisiting the controversial CityLink toll deed awarded to Transurban as part of the West Gate Tunnel Project.

The 10-year extension is worth hundreds of millions of dollars and was designed Transurban to partially recoup the cost of building the $6.7 billion project, which is now believed to have had costs blow outs of $3 billion.

Originally published as Transurban announce West Gate project will not finish until at least 2023