Melbourne’s West Gate Tunnel Project Faces $3 Billion Blowout

An aerial general view of the West Gate Bridge and the West Gate Freeway in Melbourne, Australiaon on Feb. 24, 2017. (Scott Barbour/Getty Images)

A reported $3 billion cost blowout in the construction of Melbourne’s West Gate Tunnel will not be worn by taxpayers, the state government says.

Furthermore, contractors who seek additional funds and cause delays could be doing themselves out of future work, Premier Daniel Andrews warned.

Leaked reports on Sept. 22 suggest the $6.7 billion tunnel might cost an extra $3 billion due to problems including with underground pipes, The Age newspaper reported.

“We have a fixed-price contract. We expect it to be honoured,” Andrews said in response to the reports.

Already delayed because of a dispute over contaminated soil from the construction site, the project’s builders have pushed to rip up their contract, sending a legal dispute to arbitration.

Toll giant Transurban took CPB Contractors and John Holland to Victoria’s Supreme Court after the builders asked to be let off their end of the bargain.

“I’m sending a very clear message to those who would make claims against the government, and, therefore, against taxpayers; this is not a contract that’s held with us. The contract is between Transurban and its builders,” Andrews said.

At least 200 workers on the project have lost their jobs since January because of the delays. The project is due to be finished in 2023, a year behind schedule.

The premier waned that the conduct of contractors will be remembered for future projects.

“If bidders have decided to play games instead of build things ... it goes directly to whether they will win contracts in the future,” he said.

“We want people who actually build stuff. Not people who think construction companies’ best performances are in courtrooms.”

Victoria’s Liberal-Nationals opposition said the government had mismanaged the West Gate project and taxpayers stood to carry the added $3 billion burden.

“That could hire 44,000 extra teachers, that could build an extra 15 women and children’s hospitals,” Opposition Leader Michael O'Brien said.

The tunnel is designed to be an alternative to the heavily-congested West Gate Bridge.