Two years after major sinkholes opened over the construction of a $3.1 billion Sydney motorway tunnel, the consortium tasked with completing the project has been served with a notice requiring it to continue work or face potential legal consequences.
NSW Highways Minister Jenny Aitchison said contractor CGU had received a “notice of non-compliance” on Monday, requiring it to restart work on the M6 tunnel, which was 90% complete by May 1.
Excavation in the Kogarah tunnel had been suspended since sinkholes formed in March 2024 and a “challenging” geological feature was discovered nearby, with work finally halted last June after the contractor claimed a design solution could not be achieved.
New South Wales Premier Chris Minns criticized the unilateral move to shut down the tools, saying the contractor remained responsible for the design and construction of the tunnels.
Aitchison said the government had taken “decisive action” after trying to remedy the impasse, including submitting an engineering solution to CGU, a joint venture of CPB, Ghella and UGL.
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“Transport for NSW has issued a non-compliance notice to CGU after more than two years of work to try to resolve the issues affecting this project,” it said in a statement on Monday.
“The Department has made it clear that there is a technical solution available within the current contract, and it is a reasonable expectation of the community that it be delivered.”
The new twin 4km tunnels, connecting southern Sydney to the wider motorway network, were approved in 2019 and are scheduled to open in 2025. That date was pushed back to 2028 after sinkholes were opened, then workers discovered a “high-angle reverse fault” in the bedrock in the same 245-metre section of the project.
In Tuesday’s NSW Transport Estimates, Aitchison said CGU was concerned it would not be able to deliver the project safely and feasibly, but expected the company to meet its obligations.
“We are holding the contractor accountable for the commitments they made when they signed the contract,” he told the committee.
“I’m hopeful we can come to a resolution.”
He said he could not provide information on additional costs or a possible completion date due to ongoing legal negotiations, but the prime minister had previously ruled out spending additional money on the project.
The contractor had also not approached his office to make a formal request for more funds for the project, he said.
Minns ruled out any additional funding on Tuesday when asked if the government might need to reach a deal if CGU couldn’t cover the “additional $1.5 billion needed to repair the tunnels.”
“No. This contractor…took the risk in the design and took the risk in the construction,” he told reporters.
“I’m sorry it didn’t work out, but at the end of the day they have to deliver – they’re a big international infrastructure company, they signed an agreement with the New South Wales government. I promise you that if they were under budget they wouldn’t give us a check back, so they’ll have to step up to the plate.”
When asked by National MLC Nichole Overall if the government was “prepared to let the project collapse, effectively allowing a $3.1 billion project to become a white elephant”, the minister said she would not prejudice legal discussions “with comments made here to satisfy your scaremongering”.
The NSW government has so far spent $5 million on legal fees in the dispute, the committee heard.
CPB, as CGU’s prime contractor, was contacted for a response.
