Transurban faces more West Gate Tunnel pain

Costly delays on the West Gate Tunnel project are adding up, with Transurban flagging a huge hit to its tolling revenue.

Delays on the crisis-plagued West Gate Tunnel are expected to cost Transurban more than $450 million in lost tolls — and the crippling dispute that stalled the mega project has no end in sight.

The tolling giant, which brought the $6.7bn road plan to the Andrews government in 2015, has already flagged $3.3bn in blowouts once the project gets back on track.

Contractor CPB and John Holland have argued overruns could be closer to $5bn.

In an update to investors, the tolling giant’s chief executive Scott Charlton — who received millions of dollars in bonuses last financial year — said there was no resolution to the ongoing saga and courts may have to get involved.

“Progress has been made in seeking to commercially resolve these issues, but as we have previously stated a commercial resolution may not be reached and we may need to eventually rely on the legal system,” he said.

Transurban Group chair Linsday Maxsted also revealed the company had estimated how much the business would lose because the incomplete project will not be taking customers.

The West Gate Tunnel is now expected to be completed in 2024. Picture: Jason Edwards

The road and tunnel’s completion, which was expected in 2022, was extended to 2024, and now has no firm completion date due to the standoff over costs.

Mr Maxsted said the total cost of lost revenue could be more than $450m

“The amounts in dispute are substantial,” he said in a statement.

“The project parties have continued a mediation process to seek a commercial resolution in the interests of progressing the project, and minimising further time and cost impacts; however, negotiations do remain challenging.”

Tunnelling ceased on the project in 2019, after concerns were raised about contaminated soil.

John Holland and CPB tried to kill the contract they had with Transurban, and have been locked in talks over who should pay for the debacle for many months.

The mediation process now involves the Andrews government, although it has repeatedly said the stalemate could only be settled by Transurban and the project builders.

The government struck a controversial deal with Transurban to build the road, including by extending the company’s CityLink tolling deed by 10 years.