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Transurban yesterday finalised a contract with the Victorian Government to build and operate the West Gate Tunnel Project. It has been estimated that the final design approved for construction will cost AUD6.7 billion.

The project is located in Melbourne. It comprises three main construction areas: widening the West Gate Freeway, twin tunnels under Yarraville, and a bridge over the Maribyrnong River connecting to a new elevated road along Footscray Road. 

The West Gate Freeway is currently the busiest urban freeway and the busiest road in Australia, carrying more than 200,000 vehicles per day. It links Geelong and the western suburbs of Melbourne to the central business district. It is also a link between industrial and residential areas west of the Yarra River and the city and port areas. The West Gate Tunnel project will increase the capacity of the freeway and provide a vital alternative to West Gate Bridge for crossing the Yarra River.

Construction will start in January 2018. Transurban is partnering with construction contractors CPB Contractors and John Holland to deliver the project. The new tunnels and bridge are expected to be open to traffic in 2022.

The project will be funded through tolls. Heavy commercial vehicles (HCV) and high productivity freight vehicles (HPFV) will be charged for using the expanded West Gate Freeway. All vehicles using the Hyde Street ramps, tunnels and city connections will be tolled.

Furthermore, Transurban is contributing AUD4 billion to the project in exchange for a ten-year extension on CityLink tolls. CityLink is a network of tolled urban freeways in Melbourne maintained by Transurban. The current concession agreement with Transurban expires in 2035. The extension could generate more than AUD15 billion. However, Shadow Ministers of the Victorian Parliament are moving to block the extension.

According to the official releases of the Victorian government and Transurban, the project will reduce peak travel time by up to 20 minutes, take around 28,000 vehicles off West Gate Bridge and 22,000 vehicles off Bolte Bridge a day and remove over 9,000 trucks from local streets. The parties estimate that it will boost the Australian economy by AUD11 billion. This includes the creation of 6,000 jobs, including 500 jobs for people entering the workforce, and up to 150 jobs for former auto workers.