Make Transurban pay for West Gate Tunnel

Last month, the Victorian government advised that the $6.7 billion West Gate Tunnel project would not be completed in 2022 as originally intended, instead pushing the project back to 2023 over a dispute around the disposal of contaminated soil.

Now it has been revealed that Transurban has sought to tear up the contract to build the project over a force majeure event – an unforeseeable circumstance that makes it impossible to fulfil the terms of a contract:

Transurban asked the state government if it could legally rip up its contract to build the $6.7 billion West Gate Tunnel if the builders’ attempts to dump the project were deemed valid, court documents allege.

It can also be revealed that the project’s joint building venture CPB Contractors and John Holland allegedly accused Transurban of engaging in “misleading or deceptive conduct” about the extent of PFAS contamination, fresh documents lodged in the Supreme Court said…

The builders have claimed the soil issue is a force majeure event – an unforeseeable circumstance that makes it impossible to fulfil the terms of a contract.

In a major development, court documents reveal that Transurban wrote to the state government in March, stating if the builders’ force majeure claim was deemed valid and the contract could be terminated, then this would surely extend to Transurban’s deal with the government…

The project’s builders have accused Transurban of being dishonest about the extent of PFAS contamination as part of a suite of claims they are making against the company, according to the documents.

Transurban cannot claim that it did not know about the contaminated soil, given the 1465-page agreement between the Victorian Government and Transurban also contained 125 references to “contamination”:

Search the West Gate Tunnel project agreement between Transurban and Victorian Treasurer Tim Pallas and you will find a thumping 125 references to “contamination” in the 1465-page document.

There is even a special section of the contract titled “Site conditions”, in which details are given over how to deal with disputes over new discoveries of contamination during construction of the project’s new twin tunnels and bridge over the Maribyrnong.

Victorian taxpayers are already being reamed, with the project’s cost ballooning by $1 billion, which could rise further in light of this dispute over soil contamination.

To add insult to injury, the tolls that will be charged on the project are extortionate and represent a massive financial gift from taxpayers to Transurban.

Under the project’s terms, Trans­urban will pay just $4 billion in exchange for which the toll road company will increase tolls by 4.25% every year for a decade – way above inflation and wage growth – and then rise by CPI, with Transurban netting an extra $37.3 billion by 2045, according to Parliamentary Budget Office calculations.

Transurban has already privatised the gains from this project. It must be made to wear any further cost blowouts.

Leith van Onselen

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