North East Link builders told government CFMEU was holding up construction

The consortium building the $26 billion North East Link project complained to the government in 2023 that the CFMEU was delaying construction by blocking surveyors from carrying out their work on the over-budget 10-kilometre toll road.

Spark, the consortium building the project, briefed transport officials on the “negative impact” the construction union was having in a monthly report tracking progress in March 2023.

The brief, obtained by the state opposition under freedom-of-information laws and provided to The Age and The Australian Financial Review, adds pressure on Premier Jacinta Allan to explain the steps she took to tackle systemic issues before revelations in this masthead’s Building Bad investigation in mid-2024.

The premier, who was the minister responsible for transport infrastructure such as the North East Link until September 2023, refused on Tuesday to say how many times she had been warned about misconduct on the government’s $100 billion Big Build, insisting she had always responded appropriately.

Spark’s monthly brief to transport bureaucrats, which the Department of Treasury and Finance was also looped into, detailed havoc the construction union was causing to the North East Link works, which is due to link the Eastern Freeway to the M80 Ring Road through Bulleen by 2028.

“During this month the CFMEU prevented the surveyors from carrying out their duties effectively. This has had a negative impact on progress re setting out etc. But workarounds have been developed by the site team,” the March 2023 progress report explained.

It revealed that tunnelling on the North East Link was unable to begin for up to two months because of “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.

According to the government’s Big Build website, tunnelling did not in fact begin until August and September.

Later that year, the government revealed the North East Link had blown out by another $10 billion. It was initially budgeted at $10 billion and reassessed in 2019 at $15 billion, before reaching $26 billion in December 2023.

Those cost escalations were put down to expanded scope and compliance with environmental regulations that weren’t calculated in the business case, as well as global economic disruptions such as the COVID-19 pandemic and the war in Ukraine.

Opposition transport infrastructure spokesman Evan Mulholland said the latest example of warnings to the government showed Allan had “turned a blind eye to this behaviour, at an enormous cost to taxpayers”.

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

Mulholland made the FOI request in October 2023 but was denied access, before appealing to the Office of the Victorian Information Commissioner and then the Victorian Civil and Administrative Tribunal (VCAT).

The Age and The Australian Financial Review earlier revealed that Kevin Devlin, the head of the Victorian Infrastructure Delivery Authority, repeatedly raised his concerns with Allan about CFMEU-linked misbehaviour on government work sites before this masthead’s Building Bad investigation.

Four sources said Devlin felt his concerns had not been heeded.

Allan acknowledged that Devlin had brought the issue to her attention, but maintained she had responded appropriately and that she had “zero tolerance” for any criminal behaviour on the Big Build.

“When Kevin Devlin raised with me in a meeting in June 2023 that he was aware the authority at the time was aware of anecdotal claims of alleged criminal behaviour, I ordered for those claims to be investigated by the agency with the Department of Transport at the time,” the premier said on Tuesday.

“They came back and provided advice that there was no evidence that there was systematic behaviour, but I was still concerned enough. I was concerned that this needed to be investigated further, which is why, in addition to the authority referring this matter to Victoria Police, I also, too, in June of 2023 wrote to the chief commissioner of Victoria Police.”

As one of a small number of senior public servants serving as a director of peak body Roads Australia, Devlin separately contributed to its board’s collective estimate – detailed in a confidential briefing note obtained by this masthead – last year that entrenched industrial lawlessness and criminality was fuelling 30 per cent blowouts on government infrastructure projects.

Allan, who has refused calls for a royal commission, emphasised that construction cost escalations in Victoria were lower than the national average but conceded she was “of course” concerned by that figure.

“As evidenced by the actions that we have taken,” she said.

Allan has repeatedly dismissed estimates by corruption buster Geoffrey Watson, SC, that 15 per cent of the Big Build’s $100 billion price tag had been lost to crime and corruption.

Deputy Nationals leader Emma Kealy on Tuesday said it was “utter bullshit” that the premier did not know about widespread wrongdoing on government building sites and that she should “step up or step away from the job”.

Victoria Police established Operation Hawk following this masthead’s Building Bad investigation in 2024 and has since laid dozens of charges, while the Labor Hire Authority has also cancelled and suspended licenses using stronger powers.

“They’re cleaning up the industry,” Allan said. “The culture is changing, and it’s changing because we have taken strong action against any allegation or any claim of criminal behaviour.”

The opposition and the Greens are continuing their push for the Independent Broad-based Anti-corruption Commission to have greater powers and a broader jurisdiction which would empower the watchdog to pursue wrongdoing on government construction sites.

Spark declined to comment.

The North East Link and premier’s office were contacted.

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