2020 January: West Gate Tunnel Builders Seek to Terminate Contract (Victoria)

West Gate Tunnel builders seek to terminate contract over contaminated soil, Transurban tells ASX


The builders of the Andrews Government’s signature road project are seeking to terminate their contract to build the West Gate Tunnel, due to the discovery of contaminated soil.

Project owners Transurban notified the Australian Securities Exchange this morning that the builders of the $6.7 billion project, a joint venture between CPB Contractors and John Holland, were seeking to terminate the contract on the basis that the discovery of the dangerous chemical PFAS constituted a “Force Majeure Termination Event”.

Transurban does not agree and believes the contract remains valid.

The request to terminate the contract has not halted current works.

Force majeure, meaning “superior force”, is a common clause in contracts that frees both parties from liability in the event of an extraordinary circumstance beyond the control of both parties preventing one of both of them from fulfilling their obligations under the contract.

Transport Infrastructure Minister Jacinta Allan said she had spoken with Transurban chief executive Scott Charlton this morning.

“I’ve made it very clear to the head of Transurban that we expect all three parties, all three publicly listed companies to knuckle down and resolve this matter,” she said.

She said under the Government’s contract with Transurban, the company had taken on the risk of soil contamination.

“This was a matter that was identified through the independent planning process,” Ms Allan said.

“This is a commercial matter that needs to be resolved between the builders and Transurban.”

She said the Government expected the project to be completed as scheduled by 2022.

The ABC understands the builders first gave notice of their intention to end the contract over the PFAS issue six months ago.

It is understood the builders have been unable to remove the contaminated soil because it cannot obtain an official classification from authorities for the spoil.

There is also a shortage of sites where the spoil can be treated and stored.

Last week 137 workers were laid off after tunnelling work was delayed due to the PFAS contamination, amid a dispute over who was responsible for cost overruns.

The Bela tunnel-boring machine was due to start digging last July.

PFAS led to the shutdown of the Country Fire Authority’s Fiskville training college in 2015.

It has been linked overseas to an increased risk of some cancers, but Australian authorities deny the link.

Opposition Leader Michael O’Brien said the Government should have prepared better for the possibility of soil contamination.

“This was entirely foreseeable,” he said.

“If you dig up western suburbs industrial sites, you don’t need to be a rocket scientist to know you’ll find contaminated soil.

“This should have been identified by the Government ahead of time.

“Who was responsible for removing the soil should have clearly been laid out in the contracts.

“Instead, it looks like it’s motorists and taxpayers who’ll be left to pick up the mess.”

Australian Workers Union secretary Ben Davis said today’s announcement was another example of Transurban and the joint venture holding the project and workers to ransom in order to maximise their legal position.

“Its outrageous they would do that,” Mr Davis said.

“It’s unconscionable to do this to workers’ lives.”

Mr Davis said there were procedures in the contract to resolve disputes like this through the courts.

“This is pure commercial argy-bargy. This is not an acceptable way for Transurban and the joint venture to conduct themselves,” he said.