And yet this week saw the biggest road construction project Daniel Andrews’ government has embarked upon engulfed in chaos over the contamination question. It came after months of the government deflecting questions over the potential for problems with contaminated soil being dug up on the project. Transurban told the stock market that the builders on the project, two of Australia’s biggest, were threatening to walk over problems dealing with contamination. Both were claiming a “force majeure termination event” - an event so far beyond the reasonable control of the companies that both wanted out of a contract that is paying each of them $2.5 billion. An unprecedented meltdown looms, even by the Victorian construction industry’s standards, where a bit of rough and tumble is standard on big building projects.

Problems on construction of the $6.7 billion toll road centre around soil contamination that everyone knew was there before the big dig got underway. The debate over the contamination that builders CPB Contractors and John Holland are digging up centres around rules introduced by the state’s Environment Protection Authority last October. The building firms say the volume of soil contaminated with PFAS, chemicals historically used in firefighting foams and other industrial products, is greater than expected, and that the rules around how to dispose of it have become stricter since work began. Loading While Transurban still expects the two construction giants to treat and deal with the soil, they say it’s not their fault the rules have changed.

CPB Contractors and John Holland are refusing to pay for new waste sites around Victoria to be upgraded so they have somewhere to put contaminated soil. One construction insider at the firms puts the price of compliance at around $500 million. “I wonder if the government’s big rush to get it signed off and started meant some things were overlooked?” observes William McDougall, a respected transport planner and engineer hired by the Andrews government in 2015 to help assess Transurban's proposal. McDougall questions whether the government and Transurban's shared determination that the project should proceed quickly meant not as much attention was paid to the extensive soil testing works undertaken. “In general, due diligence in determining the ground conditions is a fundamental requirement and if you are getting samples up that show something is wrong, then you go back and do more research and boreholes. It ought to be more straightforward [than what has transpired],” he says. McDougall, who also worked as a transport engineer on bids for CityLink and EastLink, was removed from the government’s assessment team for the project after he raised doubts about the wisdom of proceeding.

He’s hardly alone in having questioned the logic of building a road that will funnel thousands of extra private vehicles into the city centre each day, via new city off ramps and an expansion of Wurundjeri Way. In late 2017, a group of 28 academics told the government just as it was about to sign its contract with Transurban that the project would not fix the city’s transport woes, and that its benefits had been vastly overstated by both the toll road giant and the government. They also warned that the secrecy surrounding the opaque market-led process that had brought about the plan meant no real scrutiny of it had taken place. Premier Daniel Andrews and the Minister for Transport Infrastructure Jacinta Allan at Carrum Station on Thursday. Credit:Jason South “Everyone other than a small cadre of experts (most of whom are within Transurban, but also state officials within Treasury and [the transport department]) were shut out of the process of asking whether this project should be undertaken,” the experts wrote. While their warnings were on the planning and development side of the ledger, on the financial side the verdict from the state’s Auditor-General once the deal had been signed was scarcely more positive.

In a scathing report released last November, Victoria’s Auditor-General Andrew Greaves found the government had approved the new tunnel without sufficient proof that Transurban's proposal, embraced by Pallas, demonstrated value for money and "unique qualities". The Treasurer, who was the key backer of the Transurban deal within Cabinet, simply waved away more than a year’s work by Greaves, dismissing it as "subjective opinion". Transurban’s share price has barely budged in the wake of this week’s mess, even when Daniel Andrews threatened to rewrite the legislation that dictates the toll road operator’s relationship with the Victorian government. The Premier came under extensive questioning on Thursday over whether he had met with Transurban (he hadn’t, but his officers had), if he thought the project would run late (the opening date of 2022 remains unchanged, he said), and whether this meant trouble for the state’s bottom line (it didn’t). Andrews was adamant the claims by CPB and John Holland were opportunistic.

“Their tactics are completely obvious and they will be unsuccessful,” he said, under questioning over what a walkout by the builders would mean for the state - which has had to bail out its fair share of public-private partnerships gone wrong over the past two decades. This includes train and tram privatisation, the myki ticketing system, and the calamitous East West Link, for which $1.1 billion was paid by the state “for little tangible benefit”, the state’s auditor-general found. “We expect the contract, all of the terms and provisions of the contract, the project and its delivery in 2022, will be honoured,” Andrews said, before floating the idea that the “concession deed” - the contract that governs the state’s financial relationship with Transurban - could be altered in response to the problems. A West Gate Tunnel construction site in Footscray. Credit:Luis Enrique Ascui When Transurban floated in 1996 after it won the contract to build CityLink, the fledgling firm raised just $500 million. Today the behemoth is worth $43 billion and, from that one Melbourne toll road, has built an empire of 18 Australian motorways and three North American expressways. One former senior Victorian politician says their business model is simple: once you get control of the contract to operate a toll road, work relentlessly on the government that it helps to convince it to extend the contract. “That is their business model, nothing more,” he says.

But when Labor came to office, the company was staring down the potential that a clause in its existing contract - which allowed termination of its CityLink tolling as early as 2025 - could wipe out its most lucrative toll road. Last year, motorists on CityLink handed Transurban $813 million in tolls. The company used all its connections in 2014, prior to that year’s state election, to convince then shadow treasurer Tim Pallas it had a plan to tackle congestion in Melbourne’s west and - helpfully for Transurban - to extend its contract to run CityLink for a decade at the same time. After Labor won office that year, two of Pallas’ former staff members then working for Transurban helped to convince the government it was onto a winner by cutting the deal. The fledgling government, which never mentioned meeting Transurban or its West Gate Tunnel project before the state election, promptly dumped the (by comparison) modest plan it was elected with: a set of on- and off-ramps for trucks on the West Gate Bridge. That project’s total cost? Between $400 million and $500 million. Today, so extreme has been the blowout in costs associated with soil contamination in this project that $500 million is the figure floated by the builders for dealing with the problem while building the road.

It isn’t the government’s only big project that has problems. Of its two other mega-projects, the Metro Tunnel and the still-to-be-commenced North East Link, the former is billions over budget, while one of the three bidders to build the latter has walked away from the tender process. On Thursday, Andrews was adamant that the West Gate Tunnel was still on track, that problems always arose on big construction jobs but that the situation was in hand: “As much ground testing as you do, and as much due diligence and careful planning, there will always be issues that challenge you.” He assured reporters that the builders were playing "silly games" to get more cash out of either Transurban or his government, but that the project would be finished the same year as the next state election - 2022. It was Andrews' attempt to stare down the private sector, even though his cards in this poker game may not be that strong. The Premier has built a political reputation the envy of every politician in the land as being the man in the hardhat. If this project goes spectacularly wrong, sending all the parties to court and costly legal action, it isn't only Transurban and the reputations of two building firms that stand to be badly damaged.