‘More workers, extra shifts’: Fresh fears of West Gate Tunnel delays, cost blowouts

The West Gate Tunnel has been calling in additional workers and putting on extra shifts to ensure the $10 billion project meets its deadlines – already three years after it was originally meant to be completed – prompting fears of further delays and more cost blowouts.

Transurban insists the project is moving to a new phase, but industry sources say builders are going “flat out” to ensure they meet key milestones and avoid additional costs.

The state government says the West Gate Tunnel – connecting the West Gate Freeway in Yarraville to CityLink in Docklands – is on track to open next year.Credit: Luis Enrique Ascui

It comes as project blowouts continue to hamper the state’s bottom line, with one level crossing in Croydon now more than $100 million over budget.

The Age spoke to four construction industry sources, speaking anonymously to avoid repercussions, who said there had been a significant escalation in the number of workers being sought and called in to work on the West Gate Tunnel.

One source said in some parts of the project, staff were “on top of each other” and that other major projects were struggling to complete sections of work because labour shortages meant there were not enough workers to go around.

They also said this was affecting the tendering of work, with some contractors refusing to take long-term agreements and instead focusing on day labour until activity on worksites had eased.

Another industry source said the project was dragging behind schedule – warning that either the builders or Transurban may need to cost variations on the project before its current expected finish date of 2025.

A government spokesperson said the West Gate Tunnel was on track to open next year and would transform movement across Melbourne’s west, including taking 9000 trucks off local roads.

“The project is on track to be delivered in line with the settlement agreed with Transurban and its builders in 2021, with no further cost increases to government,” they said.

A Transurban spokesperson said the project was scheduled to be completed in late 2025 and significant progress was being made.

One of the tunnels under Yarraville as part of the West Gate Tunnel project.Credit: Jason South

The company says it had moved into its next phase of works with mechanical and electrical installation under way across all sections.

“Crews continue to work around the clock to build Melbourne’s alternative to the West Gate Bridge, so that Melbourne drivers can soon enjoy new connections from the west to Melbourne’s port, CityLink and the CBD,” they said.

The West Gate Tunnel – a $10 billion highway connecting the West Gate Freeway in Yarraville to CityLink in Docklands – was originally scheduled to be completed in 2022.

But the timeline was pushed back by three years after a protracted saga over how best to handle and dispose of soil contaminated by PFAS.

Transurban, the state government and joint builders CPB Contractors and John Holland were also locked in a lengthy negotiation about cost overruns, which ended in December 2021 when all three sides agree to make extra contributions.

The total cost of the project rose from $6.7 billion to $10 billion, with taxpayers covering $1.9 billion of the additional costs.

The Age this year revealed CPB Contractors and John Holland were also suing the engineering firms that designed the project in a bid to recoup losses they claim are from patching up previously undisclosed flaws on the massive project.

Another industry source said it was unlikely the total cost of the project would remain at $10 billion, and that there was a high risk of months of further delays.

But they cautioned this did not mean the state would accept any further taxpayer contribution, with Jacinta Allan in 2021 – when she was transport infrastructure minister – accusing Transurban of failing their “commitment to the Victorian community” when they declared the project behind schedule.

This year, the Allan government noted there had been a 22 per cent increase in construction costs since 2021 because of materials and labour.

Industry sources said this could be demonstrated on the Croydon level crossing removal, which opened in August, but was valued more than $100 million over budget.

The outcome does not mean the entire level crossing removal program will be over budget, with some projects coming in under cost and others still in planning and development.

“The Level Crossing Removal Project is on budget and remains one year ahead of schedule to remove 110 boom gates by 2030,” a state government spokesperson said.

In a release to the ASX last week, Transurban revealed it had changed its senior leadership to help with the infrastructure pipeline.

“Projects like these are naturally complex, and not done until they’re done. That’s why we have supplemented our executive team to include more engineering, major project and construction expertise,” it said last Tuesday.

Transurban said it had seen the financial impact of construction projects in Sydney and Melbourne but expected these to ease in 2025.

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