Transurban (ASX:TCL) share price edges higher despite $1.7 billion West Gate Tunnel blowout

Here’s the latest on the company’s West Gate Tunnel project dilemma.
The post Transurban (ASX:TCL) share price edges higher despite $1.7 billion West Gate Tunnel blowout appeared first on The Motley Fool Australia. –

The Transurban Group (ASX: TCL) share price is edging higher in early morning trade on Friday. This comes after the company announced a revised agreement to proceed with the West Gate Tunnel project in Melbourne.

At the time of writing, the toll road operator’s shares are fetching $13.69, up 0.66%.

Transurban reaches agreement with Victorian Government

In today’s statement, Transurban advised that it will now deliver the West Gate Tunnel project by late 2025.

The revised terms of the contract were mutually agreed upon with the Victorian Government and the CPB John Holland Joint Venture (D&C subcontractor).

The parties involved are now finalising the formal documentation. This is expected to be completed by early 2022.

This follows disputes that arose between the project parties relating to changes in the requirements for disposal of soil potentially contaminated with PFAS.

Transurban said it remained confident of its legal position but agreed to the revised terms to accelerate the project’s completion.

Under the modified terms, the D&C subcontractor has committed to commence tunnelling in early 2022.

The total cost of the D&C contract has been increased by $3.4 billion. Transurban and the Victorian Government will each contribute $1.7 billion.

Additional costs to Transurban of approximately $300 million include site activation and insurance fees, and project management expenses.

Furthermore, Transurban will also incur revenue impacts due to the now delayed completion date. The D&C subcontractor withdrew their claims to additional construction costs, which were significantly higher than the agreed contract sum adjustment.

Transurban CEO, Scott Charlton, commented:

We recognise this situation has been disappointing, however we believe this agreement represents the best path forward to deliver the West Gate Tunnel Project in the interests of all stakeholders, particularly the millions of Victorian motorists who will benefit from a vital alternative to the West Gate Bridge and a second river crossing.

Transurban share price summary

Over the past 12 months, Transurban shares have moved in circles, down 3.18%. Year to date, the company’s shares are fairly flat for the period, up just 0.74%.

Transurban commands a market capitalisation of roughly $41.8 billion, making it the thirteenth largest company on the ASX.

The post Transurban (ASX:TCL) share price edges higher despite $1.7 billion West Gate Tunnel blowout appeared first on The Motley Fool Australia.

Should you invest $1,000 in Transurban right now?

Before you consider Transurban, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Transurban wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Two inflation resilient ASX 200 shares revealed: fund manager

Why CBA (ASX:CBA) and this dividend share could be buys

The Transurban (ASX:TCL) interim dividend has just been announced. Here’s what you need to know

ASX 200 (ASX:XJO) midday update: BHP higher on unification plans, TPG tumbles

The Transurban (ASX:TCL) share price has gone nowhere this year. What now?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!