Transurban asked the Victorian government if it could rip up the West Gate Tunnel contract. Image by James Ross/AAP PHOTOS

Infrastructure

Stoush over Vic tunnel heads to court

2020-06-11 11:32:21

The company spearheading the construction of Melbourne’s $6.7 billion West Gate Tunnel asked the state government if it could rip up its contract.

Toll giant Transurban made the inquiry in March, according to documents lodged in the Supreme Court as part of an ongoing stoush between the company, its builders and the state government.

Transurban’s joint venture builders CPB Contractors and John Holland in January tried to terminate their subcontract over an issue with contaminated soil at the construction site, including its disposal.

The builders argued the issue was a “force majeure”, or unforeseen circumstances meaning the contract couldn’t be fulfilled.

Transurban said it did not believe the contract was validly terminated, while the Andrews government urged the parties to resolve their differences and get on with the job.

In documents lodged in the Supreme Court on Friday, Transurban has sought an injunction preventing the builders from beginning arbitration “prematurely” and in breach of its contract.

Major Projects Victoria project director David Clements has also submitted an affidavit supporting Transurban’s efforts to “enforce the dispute resolution procedure that binds the parties”.

But Mr Clements has revealed Transurban in March sought advice on whether it was entitled to rip up its contract if the builders were correct a “force majeure” had unfolded, arguing it would then have also occurred for the wider project.

The state government replied in April with a resolute no.

“The state’s position is that no force majeure event has occurred … it remains the state’s position that Project Co (Transurban) is not entitled to terminate the Project Agreement,” its correspondence at the time read.

The affidavit also reveals the builders accused Transurban of engaging in “misleading or deceptive conduct” over the extent of contaminated soil likely at the site, before they minted a contract.

Transurban’s matter is listed to come before court on June 18.

At least 200 workers on the project have lost their jobs since January as the fight delays construction, with completion now slated to 2023 – a year behind schedule.