Cost Blowout, Delays Occur When Government Rushes Transport Project: Transport Expert

A general view of commuters and heavy transport vehicles traveling on the M1 freeway in and out of the city on August 06, 2020 in Melbourne, Australia. (Asanka Ratnayake/Getty Images)

The cost for Melbourne’s West Gate Tunnel project is expected to spiral out of control, and a transport expert attributed part of the problems to the Labor government’s rushing the project.

The West Gate Tunnel project is a four-kilometre toll road under construction that will upgrade the West Gate Freeway at Yarraville and link to CityLink at Docklands via a tunnel beneath Yarraville. It aims to relieve M1 congestion, give people more travel options and get trucks off local streets in the inner west.

The project’s initial estimated cost was $5.5 billion (US$3.6 billion) in 2015, but it went up to $6.7 billion in 2017. In 2021, the project was predicted to cost$10.8 billion under the revised budget. The project is also running about three years behind schedule, with the initial scheduled open date in 2022 postponed to 2025.

The Herald Sun reported on July 2 that another budget blowout is underway, citing union actions over crane use and the construction of bridge structures as reasons that caused the project to be delayed.

Transport and cities program director at the Grattan Institute, Marion Terril, noted that the West Gate Tunnel has taken” a lot longer than expected” and that it’s quite common for “all sorts of problem to emerge down the track when things are instigated in a rush.”

“Fundamentally, mega projects are very complex, and they’ve got a lot of dependencies. If one thing goes wrong, it can flow on other things really easily,” she told Melbourne’s 3AW radio.

“And I think I would say that there is this particular thing that Australian governments do, rush to market on these projects, and they do pay a price when that happens.”

The transport expert also noted that other factors also came into play, including the dispute about the contaminated soil and the dispute about the relocation of utility pipes.

“There’s been a bit of everything,” she said. “I think what’s happening now with all these big infrastructure projects is that we’re seeing cost escalation because it’s been partly that’s hard to get supplies in due to the war with Ukraine.”

“Plus, it’s hard to get skilled staff. People are finding that in every part of the economy, particularly in construction.”

Toxic Soil Dispute

Among the reasons for the major delay in the project was the dispute between road operator company Transurban, its builder CPB John Holland and the Andrews government over the disposal of the contaminated soil.

Transurban argued all project parties, including the Victorian Government and builders CPB John Holland, would need to contribute to the cost and suggested that taxpayers should help foot the bill.

“The parties differ on the estimated costs to complete this project; however, Transurban is prepared to make a further meaningful contribution on top of our original $4 billion investment to get the project back on track,” Transurban Chief Executive Scott Charlton said, reported the ABC.

“We also believe that the other project parties should do so, given the unforeseen circumstances such as changes in regulations and various responsibilities under the contract.

However, the government said Transurban should be responsible for resolving the issue.

The Opposition, meanwhile, said Labor’s toxic dumping site does not have the support of local communities; instead, they argue the state government steamrolled local government and residents.

Shadow Minister for Transport Infrastructure David Davis argued the West Gate Tunnel project has been “a debacle from beginning to end.”

“It’s been a special deal for Labor’s mates. It is wildly late, with time slipping further. No wonder Labor has pulled down the 2022 completion banners,” Davis said in a media release.

“Motorists are paying through the nose every day on the CityLink roads for a tunnel that is not even built, and they may never use.

“Meanwhile, Labor is running roughshod over local communities, forcing toxic waste into place with a truncated and undemocratic process. Dumping toxic contaminated soil near communities–what could possibly go wrong?”

Victorian Training Minister Gayle confirmed the project would cost more but insisted taxpayers would not have to pay for further costs.

In June, the West Gate Tunnel experienced an underground collapse.