CPB Contractors and John Holland end $4.5bn Melbourne scheme over soil contamination row

The developers of the US$4.5bn West Gate Tunnel project in Melbourne have notified Australian Securities Exchange (ASX) that the contractors on the scheme wish to withdraw from their contract over contaminated soil.

Toll-road operator Transurban told the ASX that CPB Contractors and John Holland made their request on the grounds that the PFAS contaminants they found in the soil constituted a "force majeure" event that allowed their contract to be terminated.
Transurban refused the request. It told the ASX it does not consider the contract validly terminated.

The builders warned Transurban six months ago that more PFAS chemical had been found in the soil than expected, and talks have been under way since then on resolving the problem. Now the builders have used the force majeure clause to stop work on the tunnel, which is the main element of the scheme.

The dispute has centred around who will pay the extra cost – estimated to be as much as $675m – to dispose of the contaminated soil.

Worried about rising costs for taxpayers, the government of the state of Victoria, which is part-funding the project, took a dim view of the latest development.

Victoria Premier Daniel Andrews dismissed the dispute between Transurban and the builders as "silly games", and hinted that it could hinder the companies’ chances for future contracts.

"They have a contract with the builders and we’ll expect them to deliver against the terms of that contract," he said, reports Australian Associated Press.

"When it comes to tendering new jobs and new work, we look to people with a track record of delivery, not a track record of playing games."

Michael O’Brien, the leader of the opposition Victorian Liberal party, said: "Taxpayers and motorists have been ripped off enough. There is no way on God’s green earth that taxpayers or motorists should be paying one extra dollar to bail out Transurban or its builders."

PFASs (perfluoroalkyl and polyfluoroalkyl substances) are a group of more than 4,700 chemicals that are based on carbon and fluorine atoms, and used to make a wide variety of everyday products. There are concerns that some of these chemicals pose a health risk to humans.

In its submission to the West Gate Tunnel’s environmental effects statement in 2017, Australia’s Environment Protection Authority warned that PFAS chemicals would be increasingly regulated, owing to emerging health and ecological concerns.

The West Gate project was intended to improve traffic flow in Melbourne by widening an existing urban motorway – the West Gate freeway – from eight lanes to 12, and excavating two tunnels: a 2.8km eastbound tunnel from the freeway to the Maribyrnong River and a 4km westbound tunnel under Yarraville.

Image: The West Gate project was to offer an alternative to the West Gate Bridge (Cimic)

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  1. 3 construction contractors put in bids and all were worked over fairly well by Transurban during the two step tender process. One of these contractors are doing the same thing they did at Inpex, Darwin. That is, when it gets all too hard and they are in deep red with no chance to recover go extremely heavy with the lawyers, terminate the contract and hope that the arbitration process drags on for so long people give up, current stockholders forget, years later just maybe a shareholder announcement is made “for a few billion in extra provisions relating to the project”.

    Lets see the “free market” enterprise Transurban transport alternative solve problems it wanted to manage and to reinforce and extend its Melbourne motorway monopoly, rather than buck-passing back to Victorian Government.

  2. To Rob posted on 07 Feb, who are you refering to in inpex – I dont think Hollands or CPB left? Downers did and that was just before they merged i believe.

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