West Gate Tunnel losses have grown substantially, and Transurban has written to the government warning of a widening budget hole
A secret arrangement means the public may be left in the dark on the tunnel’s total cost and we may never get a review of whether it is value for money.
Opinion
Don't miss out on the headlines from Opinion. Followed categories will be added to My News.
When quizzed about infrastructure blowouts, former premier Daniel Andrews responded by saying, “things cost what they cost”.
His point was, I think, that although the price of something may change over time, there was still value achieved.
He added some herbs to this in 2017, when explaining why the West Gate Tunnel budget had shot up by $1.2bn before a shovel had struck dirt.
“If we don’t build this road, well, it’s unthinkable what will happen to our economy,” he said.
From its inception, the West Gate Tunnel – proposed by Transurban after Andrews killed the East West Link and was still promising to build a $400m-$500m project to get trucks off the West Gate – has been dogged by chaos.
In 2019, contaminated soil and other issues led to a lengthy legal standoff between Transurban and its builders.
At one point, the builders threatened to walk away altogether.
A settlement was brokered in 2021 by Mr-Fix-It Leon Zwier – the same man who got Victoria out of its Commonwealth Games contract – who described it as a “shared pain result that was better than the counterfactuals”.
The shared pain included a $1.9bn bill for taxpayers, $2.2bn for Transurban, losses for builders, and a three-year delay.
Since then, those losses have grown substantially, and Transurban has written to the government warning of a widening budget hole.
When a fresh claim is lodged, the public may not know what the final cost of this public sector project is, given the blanket of commercial secrecy expected to descend on negotiations.
There is also a chance the value of this project, compared to its expected cost, will never be reviewed.
Auditor-General Andrew Greaves noted last year that public entities do not “specifically analyse how major changes to cost, time and scope impact a project’s benefits and economic viability”.
He pointed to the North East Link, which was assessed by Infrastructure Australia for commonwealth funding on the assumption it would cost $15.8bn.
The assessment was never updated when the cost blew out to $26.2bn in 2023, but last year Prime Minister Anthony Albanese poured in another $3.25bn.
Why does all this matter?
As state debt approaches $200bn it will be imperative to choose the right infrastructure projects.
We can’t build them all.
The phrase “those who cannot remember the past are condemned to repeat it”, springs to mind.
Originally published as West Gate Tunnel losses have grown substantially, and Transurban has written to the government warning of a widening budget hole
Panahi: Albo is gaslighting us and playing victim card
Excuse me, Prime Minister? There is nothing orderly or coherent in your government’s belated response to the US strikes on Iranian nuclear sites.
Despite broken ceasefire, Trump has walked the talk like few others
The shattered peace deal is a setback in the quest to end the Israel and Iran war, but the apparent destruction of Iran’s nuclear facilities is a remarkable achievement that puts Trump’s predecessors to shame, writes James Morrow.