Transurban faces more West Gate Tunnel pain
The toll road giant is hit with more major cost blowouts on the troubled West Gate project due to ongoing tunnelling delays.
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Transurban faces more pain at Melbourne’s troubled $10bn West Gate Tunnel after revealing it will take an extra hit of at least $450m due to lost income from delays and extra project costs.
The budget for the toll road soared by $3.3bn to $10bn in August amid a dispute over toxic soil, and a date for completing the development was axed as the stoush over costs with its builders CPB and John Holland continues.
The toll road giant said on Monday it faced a further slug of at least $450m due to tunnelling delays which had crimped expected revenues.
“You really have to think about adding that on to the contractors’ cost. We thought it was important as we are raising equity to clarify that quantum of those costs. But it is in addition to the $3.3bn,” Transurban chief executive Scott Charlton said.
The company also noted it had taken a knock to its proportional revenue in Melbourne of $7m-$9m a week during July and August due to Covid lockdowns and $13m-$15m a week in Sydney over the same period.
Brisbane had a $5m-$6m hit during August restrictions, it said.
Transurban took the market-led proposal for West Gate to the then Andrews opposition in the lead-up to the 2014 state election, just as Labor was pledging to rip up the Napthine government’s East West Link contract – in a move that cost Victorian taxpayers $1bn – and looking for an alternative road project.
Tunnel boring was supposed to commence in 2019, but machines at the Yarraville site in Melbourne’s inner west remain idle after a dispute over the handling of contaminated soil.
Transurban on Monday unveiled plans to conduct a $4.2bn capital raising to pay for its share of Sydney’s WestConnex motorway deal after the NSW government sold the remaining 49 per cent stake to the company and its investment partners for $11.1bn on Monday.
The West Gate Tunnel was supposed to be completed ahead of the state’s November 2022 election, but amid a dispute over toxic soil Transurban pushed that timeframe out to 2023, then 2024, and said in August it could not commit to a completion date.
Transport Infrastructure Minister Jacinta Allan has previously said the onus is on Transurban to resolve the dispute and get the project done.
“Transurban brought this project to government, it selected the builders, it identified the presence of PFAS and then signed a contract to deliver the project – they need to finally settle this dispute with their builders and get on with the project,” Ms Allan said on August 9, after details of the cost blowout were revealed.
Originally published as Transurban faces more West Gate Tunnel pain
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