Questions raised over steel for Metro Rail Tunnel

Premier Daniel Andrews has said he is disappointed only 85 per cent of steel on the West Gate Tunnel project is likely to be Australian as union heavyweights say there was a “crisis of confidence” growing in the industry over a “dirty deal”.

Premier Daniel Andrews won’t commit to penalising the West Gate Tunnel builder for breaching the local content requirement for steel on the multi-billiondollar project.

Mr Andrews said he was disappointed that only 85 per cent of steel on the project was likely to be Australian — which breaks his promise that it would be built with 92 per cent local material.

He blamed the contractors putting in later orders to local steel manufacturers that they did not have enough time to fulfil.

But despite saying the actions of lead contractor — the Chinese owned builder John Holland — was a clear breach of the local content clause in the contract, he would not confirm if they would face penalties.

“It would seem the key to the issue is that the contractor has not given local steel manufacturers sufficient notice to fulfil the orders,’’ Mr Andrews said.

“They have not given local manufacturers enough time to scale up to fulfil the orders and said well it can’t be supplied locally and we need to go offshore.”

He said he would work with his department to ensure other contractors on state government projects give the local steel industry enough notice so they can meet steel orders. Mr Andrews said the government was still working through the contract to determine if John Holland would face penalties.

Labor had promised 90 per cent Australian steel would be used on the Metro Tunnel, which will provide an alternative to the City Loop when it opens in 2025.

But the union representing steel workers says there is now a “crisis of confidence” in the industry, after it was revealed 33,000 tonnes of steel would be imported for the WGT.

AWU state secretary Ben Davis said the major shareholder of the company producing that steel is China Communications Construction Company — the same company that owns WGT builder John Holland.

Mr Davis said it was a case of John Holland doing a “dirty deal” with its own parent company and the Andrews Government should be “embarrassed”.

“What’s the point of local content promises and commercial undertakings if principle contractors like John Holland can just thumb their noses at obligations and the government just rolls over?” he said.

Construction of the West Gate Tunnel. Picture: Wayne Taylor

John Holland is also part of the group building stations and tunnels for the Metro Rail Tunnel, along with Lendlease, Bouygues and Capella Capital.

The company has repeatedly ignored requests for comment about the West Gate Tunnel and Metro Tunnel local content arrangements.

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Australian Steel Institute interim-chief executive Phil Casey said billions of dollars were added to the economy by the local industry and the body was “disappointed” so much steel was being produced offshore for a key Victorian project.

“We are continuing to work closely and constructively with the Victorian Government and the steel supply chain to ensure that as much steel as possible, including the remaining steel tonnes yet to be contracted for the West Gate Tunnel Project, are supplied by local companies,” Mr Casey said.

Shadow Treasurer Louise Staley said Mr Andrews’s commitments could not be trusted.

“Regardless of whether this was a good policy in the first place, it was an election promise by the Andrews Labor Government and it’s a promise they’ve broken,” she said.

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