CFMEU disruption did not blow North East Link’s budget, says premier

Premier Jacinta Allan has rejected claims the CFMEU delayed the North East Link or that the construction union’s disruption added to the project’s $10 billion blowout.

The Age on Tuesday revealed that the consortium building the 10-kilometre project had complained to the government in March 2023 that the union’s mischief had pushed back tunnelling by as much as two months.

Separately, the opposition on Wednesday afternoon gained enough crossbench support to pass its bill through the upper house to give the state’s corruption watchdog “follow the dollar powers”, as the Independent Broad Anti-corruption Commission (IBAC) and a parliamentary inquiry have both called for.

The bill immediately failed in the lower house, where Labor holds a handsome majority, while the premier was absent. But its passage through the upper house is a significant embarrassment to the government.

Spark, the consortium building the project, briefed the government’s transport officials on the “negative impact” the CFMEU was having on the North East Link in a monthly report tracking progress in March 2023.

Asked whether the disruption had contributed to the project’s budget blowout, Allan said: “Those claims are incorrect”.

The premier repeated that the government expanded the toll road’s scope to better serve the community, with longer tunnels and more lanes, and said progress was on track to link the Eastern Freeway to the M80 Ring Road through Bulleen by 2028.

“The project is scheduled to be delivered by 2028 and the feedback I get from the project, and when I was out there a couple of months ago, is that the work of the tunnel boring machines is going really well. We’re on track to see the project delivered by that 2028 timeline that’s been committed,” Allan said.

“North East Link is a much-needed project. It’s been talked about for decades.”

The 2023 briefing note, obtained by the Victorian opposition under freedom-of-information laws, said tunnelling on the North East Link was unable to begin for up to two months and cited “later delivery and longer CFMEU-driven assembly”.

The first tunnel-boring machine was expected to start excavations 65 days later than planned, pushing its start time out from March to May 2024, while the second was delayed 44 days from May to July 2024. The Big Build website says tunnelling did not begin for even longer than that.

Two sources unable to speak publicly said that a demarcation fight between the CFMEU’s construction wing and the Australian Workers’ Union had been playing out on the site. The AWU had claimed that cranes should have been operated by its members but were instead going to the CFMEU.

“During this month, the CFMEU prevented the surveyors from carrying out their duties effectively,” Spark’s brief said. “This has had a negative impact on progress re setting out etc. But workarounds have been developed by the site team.”

Allan said she met with the surveying industry at the time, to talk through a “range of matters” complicating government projects.

The North East Link was initially budgeted at $10 billion and reassessed in 2019 at $15 billion, before reaching $26 billion in December 2023.

The government has also put the cost escalation down to inflationary pressures brought about by the COVID-19 pandemic and Russia invading Ukraine.

Opposition transport infrastructure spokesman Evan Mulholland said Allan “as minister responsible, and premier, was repeatedly warned about CFMEU behaviour adding costs to taxpayers and causing disruption on construction sites”.

Allan has dismissed the need to give IBAC greater powers and a broader jurisdiction, despite IBAC informing the premier it was unable to investigate a referral she made in 2024 about alleged misbehaviour on the state’s Big Build program.

Follow the money powers would allow IBAC to track taxpayer funds through subcontracts, which the construction sector is particularly dependent on.

The premier has disputed the $15 billion figure, estimated by corruption-buster Geoffrey Watson, SC, even after the board of Transport Australia estimated costs may have escalated as much as 30 per cent on some government worksites.

The Greens supported the opposition bill through both houses on Wednesday, with Victorian leader Ellen Sandell saying voters deserved answers.

“This is another desperate attempt from Labor to cover up alleged corruption.”

A Queensland inquiry is separately using its royal commission powers to compel infrastructure industry peak body Transport Australia, which counts Victoria’s Big Build chief Kevin Devlin among its directors, to produce board discussions.

The board of Transport Australia, formerly known as Roads Australia, agreed last March that industrial lawlessness, criminality and other wrongdoing were adding a 30 per cent premium on to some major projects.

Devlin had separately confidentially discussed his concerns about serious union wrongdoing on Victorian rail and road projects with Allan while she was transport infrastructure minister.

On Tuesday, Allan conceded that the head of the Victorian Infrastructure Delivery Authority had privately warned her about serious wrongdoing on the Big Build in 2023. She said it was not found to be “systemic” but claims were referred on to the relevant authorities.

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