Westgate Tunnel Project Sinking…

Project owner Transurban has this morning advised the ASX that JV contractors CPB and John Holland are seeking to terminate their contract to build the Westgate Tunnel Project. The project has been mothballed for >6 months as parties try to find a solution to the significant PFAS soil contamination discovered during construction. With none of Transurban, the JV partners or the State Government willing to pick-up the tab for decontamination and processing of the waste the project was forced to lay-off up to 140 workers last week as the boring machines lay idle.

The JV now claims that the PFAS issue equates to a “Force Majeure Termination Event” –  a common exit clause in contracts that is usually triggered by natural disasters.

So what does this actually mean for the project? Works outside of the boring are continuing and are likely to do so as the legal and commercial wrangling works its way through the courts – it is highly unlikely even in the event that the contract is annulled that the JV would walk away from the project. But the solution isn’t just as simple as someone having to write a cheque as the states waste processing facilities require significant upgrades if they are to handle and process the amount of waste that will be generated. That 2022 delivery ‘deadline’ is looking very close indeed.