West Gate Tunnel builder vows to overcome toxic soil crisis

Victorian Premier says he won’t rule out revisiting another Transurban contract.

Victorian Premier Daniel Andrews says Transurban is aware of the government’s position.

A defiant Transurban has vowed to overcome the toxic gridlock that has plunged its $6.7bn West Gate Tunnel into crisis.

As Premier Daniel Andrews heaped pressure on Transurban on Thursday, the tollway giant recommitted to completing the controversial second river crossing.

“The West Gate Tunnel is a vital piece of infrastructure to deliver Victorians a much-needed alternative to the West Gate Bridge,” a spokesman said.

“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.”

The West Gate Tunnel is designed to provide an alternative link between Melbourne’s western suburbs and the city, the airport and the southeastern suburbs.

But the promised 2022 completion date — and the $6.7bn cost — are under immense threat after a dispute over contaminated soil came to a head on Wednesday.

West Gate joint venture builders CPB Contractors and John Holland threatened to walk away from the contract because of a blowout in costs triggered by the discovery of toxic soil.

Mr Andrews warned Transurban on Thursday its separate tollway contract for CityLink could be revisited if the West Gate Tunnel dispute was not resolved. He dismissed the dispute between Transurban and the builders as “silly games”.

Asked on Thursday whether the dispute might mean the government revisits the 10-year extension handed to Transurban in relation to the West Gate project, Mr Andrews suggested it might. “I won’t rule it out,” he said.

“They have a contract with the builders and we’ll expect them to deliver against the terms of that contract. When it comes to tendering new jobs and new work, we look to people with a track record of delivery, not a track record of playing games. Companies trying to squeeze the taxpayer by playing silly games, that simply will not work.”

Mr Andrews said that despite this issue, the project would be delivered on time in 2022 and added that significant progress had been made on the soil issues.

Sources familiar with the project said the extension of Transurban’s CityLink toll deed is critical to funding the cost of the West Gate Tunnel, and suggested that any reduction in revenues would have a significant impact on Transurban’s ability to complete the project.

The two subcontractors issued the tolling giant with an ultimatum on Wednesday. In a notice to the Australian Securities Exchange, Transurban said it has received a document from the builders which “purports to terminate” their subcontract over an ongoing soil contamination issue.

Ratings agency Standard & Poor’s this week issued a warning, saying it expected the termination notice to trigger commercial negotiations between the builders, Transurban and the Andrews Government.

This opens the way for taxpayers to be hit with a bill for several billions of dollars to cover the costs of removing the soil, which is laden with polyfluorinated alkyl substances, otherwise known as PFAS firefighting foam, within the site.

Additional reporting: AAP