Victoria's royal commission opened hearings Monday to examine a contractor's claim about union influence in government and financial arrangements following a 2022 rail stoppage, raising questions about public construction costs.
The first hearings focus on the Gap Road project in Sunbury, near Melbourne. Work stopped June 6-7, 2022, and resumed after a June 7 meeting at the offices of the Construction, Forestry and Maritime Employees Union (CFMEU), the commission says. The project removed a level crossing and built a rail bridge and underpass.
The inquiry will assess the price of measures taken after the meeting and who bore it. It will also examine changes involving labor hire and traffic management providers.
ABC News reported that the project's target cost rose from A$110 million to A$116 million after the stoppage. It put the final cost at A$104 million and said contractors received A$2 million in additional profit under an arrangement giving them 35% of savings below the target. ABC said the state initially paid project costs, while contractors shared some overruns. The rise in the target cost does not establish what the stoppage itself cost.
Australian Associated Press reported that an August 2021 memorandum by project contractor John Holland described the CFMEU as influential within Victoria's government and connected the company's dealings with the union to its wider government strategy. That was John Holland's assessment; the commission has made no finding that the union influenced government decisions.
Premier Ben Carroll denied knowing about access to officials and ministers alleged in a separate 2017 John Holland memorandum, ABC News reported.
Established in August, the commission is investigating allegations of corruption, criminal conduct and serious misconduct across Victoria's major construction projects. Its remit includes unions, contractors and government bodies, as well as procurement, project costs and whether public funds can be recovered.
Public hearings are scheduled through Nov. 20. The commission's final report is due by Aug. 20, 2027, unless the deadline is extended.
