Dan’s West Gate Tunnel hit with another scandal

In late 2017, the Victorian Labor Government completed a shady $6.7 billion deal with Transurban to build the West Gate Tunnel Project, which will see Transurban contribute $4.4 billion towards the cost in exchange motorists paying $15 billion in additional tolls on CityLink until 2045.

Former Premier Jeff Kennett described the deal as “absurd” and claimed Transurban had “the government in their pocket”.

Whereas several transport experts also sounded the alarm over the deal (see here, here and here).

Under the deal, tolls are permitted to rise by a whopping 4.25% a year until 2029 – well above inflation and wage growth – and then rise by CPI, with the current CityLink toll trip cap to increase from just over $9 currently to more than $20 by 2045.

In November, an assessment by the Victorian Auditor-General slammed the project, claiming the Treasury Department had failed to rigorously assess the project or examine better value alternatives.

And in December, it was revealed that the cost of the West Gate Tunnel project had blown out by more than $1 billion to $6.7 billion, with taxpayers to fund the extra costs.

Yesterday, another scandal hit the project, with complications over contaminated soil resulting in heavy lay-offs:

Union delegates have met with the consortium running the project this morning and have been told as many as 150 staff may not be working on the site from January 24.

Digging is yet to start on the tunnel amid a dispute over how to deal with toxic soil with traces of asbestos and industrial chemical PFAS…

Most of the workers likely to be sent home are understood to be tunnellers needed for the digging operation…

Workers attending the meeting were told the decision was triggered by a standoff between the state government and Transurban, which has been contracted to deliver the project, about the handling of contaminated soil at the project site.

Soil contamination issues at industrial areas in Melbourne’s inner west had forced the start of major tunnelling work to be delayed by at least six months.

AWU state secretary Ben Davis said the delay would put the project’s 2022 completion date in jeopardy…

The Herald Sun has also been told that the consortium building the project was likely to make a claim for cost overruns…

Meanwhile, Transurban is laughing all the way to the bank, scooping a $15 billion toll jackpot to build the West Gate Tunnel:

Toll road operator Transurban will reap an estimated $15 billion in additional tolls until 2045 in return for coughing up $4.4bn to help fund the Andrews government’s $6.7bn West Gate Tunnel project…

Under the plan, Transurban is expected to net an additional $15bn in toll revenue on CityLink, according to opposition estimates, while also profiting from variable peak-hour pricing and city access taxes on the West Gate Tunnel.

The Victorian Government has clearly failed for follow due process on the East West Tunnel, instead granting further monopoly rents to Transurban.

Ultimately, this debacle has all come about because the Victorian Government is desperately trying to build infrastructure to keep pace with the federal government’s mass immigration ‘Big Australia’ policy:

Expect a lot more dodgy dealings in the future as Melbourne’s population continues to balloon out of control beyond 10 million.

Leith van Onselen
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