Melbourne Metro Tunnel Work Halts Over Cost Dispute


Digging on Melbourne's Metro tunnel's has stopped without notice, amid a mounting cost dispute on the state's $11 billion infrastructure project.

Workers on the project and its two tunnel boring machines have been placed “on standby”, after a dispute over the cost of the rail project between the consortium building the project and state government boiled over.

Sources confirmed on Monday that the consortium threatened to stop work and withdraw from the project entirely if the Victorian government did not pay up to $3 billion to cover cost blowouts.

The Cross Yarra Partnership consortium comprises Lendlease, John Holland, Bouygues Construction and Capella Capital.

The Victorian government signed contracts with CYP to deliver the Melbourne Metro Tunnel, one of the state's biggest contracts on a public transport project, early last year.

But when contacted, a government spokesperson said Rail Projects Victoria was in “ongoing discussions” with the consortium.

“On all aspects of the project and is focused on achieving the best outcomes as works progress,” the RPV spokesperson said.

“To date, CYP has not provided RPV with any specific detail of proposed changes to its tunnelling program.

So far the tunnel boring machine 1 has travelled 540 meters, while the second has travelled 281 meters since launching this year, the RPV spokesperson added.

The $11 billion project plans to create a new end-to-end rail line from Sunbury in Melbourne's west to Cranbourne-Pakenham in the south east.

Plans include two nine-kilometre tunnels from the west of Melbourne, near South Kensington station, to the south east, near South Yarra station. Along with new stations in the CBD, Parkville, North Melbourne, and St Kilda Road.

“Rail Projects Victoria is committed to delivering the Metro Tunnel Project by 2025,” the RPV spokesperson said.

It’s now understood a mediator has been called in to handle the dispute.

The CYP consortium is yet to respond to a request for commentary.

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