As part of the project’s funding deal, Mr Andrews agreed to extend CityLink tolling by 10 years to 2045, with tolls to escalate by 4.25 per cent a year, about double the inflation rate.
This would help Transurban generate its $4 billion contribution to the road, with taxpayers set to pay $2.7 billion.
Asked if the concession deed for the extended toll deal with Transurban could be revisited, Mr Andrews said: “My answer is yes.”
The Premier said he had not met Transurban recently, but the company was aware of the government’s position.
By 2044-45, Transurban stands to make $7.5 billion in present value terms from the new CityLink tolls.
Opposition transport infrastructure spokesman David Davis said the government would have to negotiate any changes to the tolling document with Transurban before introducing them in Parliament.
But Mr Davis challenged the Premier to carry out his threat. “The Premier is talking tough about Transurban now, but given his track record you’d have to doubt whether he would follow through.”
Mr Davis sought to stop the concession deed from being passed in State Parliament last year and said he would “wait and see what the Premier puts forward”, but was inclined to vote against any further CityLink tolling.
Greens transport spokesman Sam Hibbins said he wanted to see the concession deed “scrapped altogether”.
“This was a sweetheart deal with Transurban that never should have gone ahead in the first place,” he said.
The West Gate Tunnel construction companies are claiming that issues around soil contaminated with PFAS – chemicals linked to a range of illnesses that led to the shutdown of the CFA training college in Fiskville – are proving extremely difficult to manage.
The first of two 450-tonne tunnel-boring machines was lowered into a launch site at Yarraville last August, but neither machine has moved a centimetre because of the discovery of the PFAS contaminants. Other work continues on the project, such as off-ramp construction.
Dr Nick Seddon, one of Australia’s leading experts on government contracts, said the Andrews government had the power to pass overarching legislation that changes or hinders CityLink tolling.
The government could pass legislation even if it contradicted the terms of its contract with Transurban, he said.
“The company [Transurban] can’t sue the government if the change to the contract is done by legislation,” the honorary professor at ANU College of Law said.
However, David Donnelly, a partner at Allens law firm who specialises in infrastructure projects, said it was unlikely the government would simply rip up the CityLink concession deed, because it would severely harm investor confidence.
“The tunnel might be in a world of pain given the PFAS issues, but the concession with Transurban is still on foot,” he said.
Crossbench MP David Limbrick was one of two Liberal Democrats MPs who opposed the concession deed when it was put to a vote in the upper house.
“I’d have to see the details, but we might not be happy with it the second time as well,” he said.
The two Derryn Hinch Justice Party MPs also opposed the concession deed, and the party confirmed its position had not changed.
Justice Party MP Stuart Grimley said the tunnel was necessary to relieve traffic bottlenecks, but the deal delivered too big a windfall to Transurban.
“It is outrageous that we are now in this position given the strong public opposition to the bill last year,” he said.
However, shareholders appear to be calling the Premier’s bluff on threats to change CityLink tolling, with Transurban’s share price slipping only slightly on Thursday.
Mr Andrews said the builder’s “obvious” tactics to try to squeeze more money from the taxpayer to deal with the soil would not be successful.
A Transurban spokeswoman said the CityLink tolling extension was key to the West Gate Tunnel funding deal and the company was working with the building joint venture, the government and the Environment Protection Agency to reach a solution on how to dispose of the rock and soil.
Timna Jacks is Transport Reporter at The Age
Benjamin is a state political reporter