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The future of the West Gate Tunnel is once again in chaos, with Transurban on Monday advising of a $3.3b blowout and demanding taxpayers help pay for it.
The company also said there was “no reliable timeframe” for completion of the project.
In documents released to investors, Transurban has for the first time provided further details of the dispute that is delaying the project.
Giant tunnel boring machines are sitting idle in the ground at Yarraville because there is no site in Victoria that can currently handle the soil it will dig up.
The dirt is contaminated with PFAS and asbestos that will need to be specially handled at a purpose-built facility under current environmental guidelines.
Digging was expected to begin in 2019 and has led to massive cost overruns, staff layoffs and a threat from the builders that they would tear up the contract.
Transurban was scheduled to finish the project in 2022 but has pushed that completion date back to 2023 and 2024.
On Monday, chief executive Scott Charlton said the company could not commit to any finish date.
“We had hoped this project would be open for the community next year; however that is no longer achievable, and we are unable to put a reliable timeframe on its completion,” he said.
The trouble-plagued West Gate tunnel project in Yarraville. Picture: Aaron Francis
Hi Quality in Bulla, Maddingley Brown Coal and Cleanaway and Ravenhall all have environmental and planning approval to take the dirt.
The company has provided cash for Hi-Quality in Bulla to build a facility to handle the contaminated soil and this is expected to be completed later this year.
But in its corporate report, Transurban flagged an ongoing legal dispute with the builders CPB and John Holland had not yet been resolved.
The consortium tasked with delivering the West Gate Tunnel has tried to tear up the contract and rule it invalid because of the soil contamination issue, with the builders and company in mediation over the dispute.
Transurban has provided $443m in advance payments and flagged cost blowouts of $3.3b.
“Due to the presence of commercial matters, claims and dispute resolution processes, the D&C subcontractor (the builders) will not be able to complete the contracted works by the end of 2023 and is expected to incur costs in excess of the contractual sum,” the report reads.
“Estimates of additional costs to complete the project differ among project parties and remain uncertain.
“Based on preliminary independent analysis, the Group estimates the D&C subcontractor’s construction costs could increase in the order of $3.3b
“In order to reach a commercial settlement, the Group believes all project parties would be required to make a meaningful financial contribution.”
This article first appeared on www.heraldsun.com.au
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