Andrews Government still locked in billion-dollar Metro Tunnel stand-off
After months of the Metro Tunnel’s monetary woes and ballooning costs, the Andrews Government remains in a stand-off with the project’s consortium. And despite valiant efforts from builders and the government, any resolution still seems a long way off.
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The Andrews Government and the group building the $11 billion Melbourne Metro Tunnel remain in a stand-off over ballooning cost overruns after talks broke down at the end of last year.
Sources familiar with last year’s talks say an offer floated by the State Government involving hundreds of millions in extra money was rejected outright by the Cross Yarra Partnership.
The consortium, which includes construction giants Lendlease, John Holland and Bouygues Construction, is seeking up to an extra $3 billion, claiming financial pressures had arisen due to issues that were unforeseeable when contracts were signed in 2017.
A government spokeswoman said negotiations were still continuing.
In December, works to build the twin 9km tunnels between South Yarra and Kensington ground to a halt because of the ongoing dispute.
At the time, Premier Daniel Andrews said it was a “pretty obvious tactic from some giant building companies who are very keen to get some more money out of Victorian taxpayers”.
The fresh major project pain comes amid a separate dispute over costs on the $6.7 billion West Gate Tunnel project, which has also saw tunnelling halted last year.
The WGT consortium on Tuesday told Transurban — which signed the overarching contract for the toll road — that it would terminate its part of the deal to build the tunnels.
Mr Andrews yesterday stared down the builders, which include John Holland and CPB Contractors, saying they were using “completely obvious” tactics.
He acknowledged concerns about contaminated soil at the project site, but said a solution was close.
“We have made significant progress on the soil issues and we make no apology for never compromising safety and these sort of very obvious games being played by very large, very profitable companies, looking to squeeze more money ultimately out of the Victorian taxpayer, will not work,” he said.
“We are not that far away form being able to deal with these soil issues.”
The soil problem has dogged the project since last year, when a strict EPA stance on an industrial chemical known as PFAS forced the consortium to bulk excavate masses of soil from vast areas of the project site.
It argues that this was an unforeseen circumstance and that the regulations governing PFAS had changed since the contract was signed.
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Mr Andrews said the issue he expected the toll road should still be opened by 2022.
If not, the generous deal the government struck with Transurban to extend its CityLink concession deed until 2045 — worth billions of dollars — could be revisited.
“Will the concession deed be potentially back on the table? My answer is, ‘yes’,” Mr Andrews said.
A Transurban spokeswoman said the project “is a vital piece of infrastructure to deliver Victorians a much-needed alternative to the West Gate Bridge”.
“We are committed to getting the job done as safely and quickly as possible. Construction works are progressing with around 4000 people currently on the job.”