Australia’s West Gate Tunnel project agreement

A resolution has been reached for Australia’s West Gate Tunnel project.
Finance & Funding / January 5, 2022 25 seconds Read
By MJ Woof
A resolution has been achieved for the dispute over additional costs to Melbourne’s West Gate Tunnel project – image courtesy of © Stephen Wood, Dreamstime.com
An agreement over Australia’s West Gate Tunnel project in Melbourne looks set to allow work to restart. The project ground to a halt when toxic soil deposits were found on the alignment. The need to remove the contaminated ground from the tunnel route for the work to be allowed to continue resulted in a massive jump in costs, triggering a dispute as to who would pay for the removal.

The Victoria State Government and toll road firm Transurban have now agreed terms however. Victoria State is to provide an additional US$1.41 billion (A$1.9 billion) to the works, while Transurban will provide an additional $1.48 billion (A$2 billion). The extra construction costs of $2.52 billion (A$3.4 billion) will be shared between Victoria State and Transurban.

In addition, Transurban will pay for the $222.6 million (A$300 million) cost of the extra costs for factors such as project management and insurance. The project is due for completion in 2025 and will now cost a total of $7.42 billion (A$10 billion) instead of the $4.97 billion (A$6.7billion) originally envisaged.
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