Transport Infrastructure Minister Jacinta Allan has hit out at Transurban and the builders of the $6.7 billion West Gate Tunnel as more than 200 workers on the troubled toll road project were stood down, with another 400 at risk of losing their jobs in coming months.
Senior industry, union and government sources confirmed to The Age late on Monday that about 100 white-collar staff employed by the project’s builders – CPB Contractors and John Holland – and possibly another 130 subcontractors were being stood down.
The companies had not announced the job losses by Tuesday afternoon, so no official reason has yet been provided.
But sources with detailed knowledge of the project said the cuts were linked to claims by the builders that costs had increased due to the landfill levy associated with the dumping of contaminated soil already dug up and being stockpiled along the West Gate Freeway.
The builders wrote to head project contractor Transurban on March 31, advising the company that if a site was not found to dispose of the project’s soil within the next two weeks, it would cut up to 600 jobs in the next 12 weeks.
Transport Infrastructure Minister Jacinta Allan blasted the project’s builders and Transurban on Tuesday, raising the possibility they were playing a tactical game aimed at extorting the Victorian taxpayer.
“This behaviour that were seeing most recently from these companies and also Transurban is absolutely disgraceful,” she said in a press conference called in the wake of the cuts.
“You do have to question is this a tactical move by Transurban and its builders in an attempt to in some way extort the Victorian government and by extension, the Victorian community to help them sort out this issue.
“This is just unacceptable behaviour.”
The state government wrote to Transurban on April 22, confirming that the soil stockpiled along the freeway had received necessary EPA approvals and that there was sufficient licensed landfill capacity to accept it.
The government has been determined to resist pressure to bail the contractors out over the contamination conundrum. Senior government figures have been scathing behind the scenes about the tactics used by Transurban, CPB and John Holland, with one source accusing the companies of trying to “extort taxpayer money” from the government.
The builders have already used the EPA approvals to remove piles of soil along Footscray Road and the soil stockpiled along the freeway was a very small portion of all the spoil to be unearthed to build the toll road.
Ms Allan said the job losses were unnecessary and were occurring while other businesses were trying to do all they could to keep people employed.
“There is no reason whatsoever for Transurban’s builders, CPB and John Holland, to sack these workers,” Ms Allan said.
“The stockpiles of soil currently on site can be moved immediately – the builder has all the necessary EPA approvals to take this soil to licensed landfill sites.
The job losses come at a difficult time as unemployment surges towards 10 per cent in the wake of the coronavirus pandemic, and governments seek to bolster job numbers with stimulus spending and borrowing.
“While businesses across Australia are going to extraordinary lengths to keep staff on, Transurban’s builders are proposing to sack up to 600 people because they can’t agree who should pay tip fees – it’s disgraceful,” Ms Allan said.
With a price tag of $5.5 billion and a promise to reduce congestion, the West Gate Tunnel project is an ambitious one. But does it stack up?
The builders are in a dispute with Transurban, claiming the issue of soil being contaminated with potentially carcinogenic PFAS chemicals amounts to a force majeure event. Transurban is disputing this claim and is reserving its rights to seek damages from the builders over late delivery.
Sources said there were plans to redeploy the 100 workers directly employed on the West Gate Tunnel on other projects or offer them redundancies. The West Gate Tunnel project employs 4000 workers.
Delays and job losses on one of Labor’s signature projects are also a blow to Premier Daniel Andrews’ “can do” reputation and his focus on getting infrastructure built.
Last week, Transurban admitted that the toll road was running late and would not be completed until 2023, instead of 2022.
A Transurban spokeswoman urged the builders to keep the workers employed.
“We are extremely disappointed the CPB-John Holland joint venture is taking these steps when there are options to keep staff employed,” she said.
“While there are challenges on the project, there are plenty of pathways forward to progress works and we urge the CPB-John Holland joint venture to keep these people in a job.
“The CPB-John Holland joint venture has a fixed-price, fixed-time contract to deliver the West Gate Tunnel project including responsibility for all staffing, construction and tunnelling works.”
Source: Royce Millar, Timna Jacks The Age