Victoria’s Big Build is set to come under formal scrutiny after newly appointed Premier Ben Carroll announced plans for a royal commission, which could bring previously confidential procurement, subcontracting and due-diligence practices into public view.
Announced as Carroll’s first major act after replacing Jacinta Allan last week, the inquiry is expected to examine allegations of corruption, criminal infiltration, violence and misconduct connected to Victoria’s Big Build projects and their extensive contracting networks.
The Big Build has directed more than $100 billion in public funding towards more than 180 projects since 2015, including the Metro Tunnel, Suburban Rail Loop, West Gate Tunnel, North East Link and the level crossing removal program.
Many of these projects have suffered significant cost blowouts, previously attributed by Allan to inflation, supply chain disruptions and rising labour costs. However, media investigations have raised allegations of gang involvement and union-linked corruption on some Big Build sites.
Once formally constituted under Victoria’s Inquiries Act, the commission would hold substantial coercive powers, with the ability to summon people to attend hearings, compel evidence under oath and demand documents, as well as seek warrants to search premises and seize relevant materials.
These powers could provide access to procurement records, tender evaluations, contracts, variations, invoices, payment data, internal correspondence and due-diligence documentation not usually available for public scrutiny.
The Victorian Government has also committed to appointing a special prosecutor to work alongside the royal commission and said it will strengthen the Independent Broad-based Anti-corruption Commission’s (IBAC) ability to follow public money through contractors and other organisations.
This would allow investigators to trace payments beyond principal contractors and examine how taxpayer funding moved through subcontractors, labour-hire providers, traffic management businesses and other companies within complex project delivery structures.
IBAC has previously identified fraud, collusion and bribery as the main corruption threats affecting the procurement and construction stages of major transport infrastructure projects, warning that large projects are particularly vulnerable because of their size, technical complexity, short delivery schedules and reliance on extensive supply chains.
The anti-corruption watchdog has also pointed to multiple tiers of subcontracting making it difficult for government agencies and principal contractors to identify beneficial ownership, conflicts of interest, collusive relationships and the ultimate recipients of public money.
The proposed commission could examine supplier selection, tender evaluation, subcontractor visibility, beneficial ownership, labour-hire arrangements, contract variations, conflicts of interest, probity controls and the escalation of suspected misconduct.
It may also consider whether agencies and head contractors conducted adequate due diligence beyond their immediate suppliers, whether audit and inspection rights built into contracts were actually exercised, and whether existing reporting systems allowed emerging risks to be identified and escalated early enough.
However, the commission has not yet been formally constituted, with its commissioner, final terms of reference, reporting timeframe and commencement date yet to be announced, but Carroll said he intends to have it underway before Victoria’s election in late November.
“I want no stone unturned, whether it is top-tier contractors, subcontractors, labour hire, government, unions,” he said.
Victorian Opposition Leader Jess Wilson has released her own draft terms of reference and called for 25 potential witnesses, including Carroll, former premiers Daniel Andrews and Allan, Deputy Premier Gabrielle Williams, former CFMEU Victorian secretary John Setka and construction industry mediator Mick Gatto.
Her letter to Carroll argues the terms “must be expansive” and should “specifically examine, at public hearings as a matter of urgency, the knowledge and culpability of what current and former premiers, ministers and senior officials knew.”
Wilson’s proposal calls for scrutiny of all government-funded construction projects rather than Big Build sites alone, including the roles of current and former ministers, senior public servants, ministerial offices, unions, contractors and other industry participants.
Carroll said he had not yet read Wilson’s letter in full, but confirmed the government’s own terms of reference would be “wide and exhaustive.”
He said he was taking advice from Victoria Police Chief Commissioner Mike Bush on developing the terms and would leave it to the royal commissioner to decide which witnesses should be called.
“Everyone should be questioned that the royal commission believes had a role,” he said, adding that he would be willing to give evidence himself if requested.
Calling the announcement long overdue, former IBAC commissioner Robert Redlich said Allan and Andrews should “undoubtedly” be called.
“If the royal commission is going to look at where the problems started, why they started, that’s the place at which the royal commission must commence,” he said, referencing Andrews’ premiership.
Redlich said the commission would also need to examine how contractual arrangements for each major project were made, what oversight the public service exercised and how criminal elements came to benefit from the process.
Pressure for an inquiry intensified following the release of Rotting from the Top, a report prepared by anti-corruption barrister Geoffrey Watson SC into the Victorian CFMEU during Setka’s leadership.
Tendered to Queensland’s Commission of Inquiry into the CFMEU and Misconduct in the Construction Industry, the report contains allegations of corruption, intimidation, violence, criminal influence and preferential treatment involving parts of Victoria’s construction sector.
It also raises questions about the selection of subcontractors and labour-hire providers, alleging that some businesses received favourable access to major worksites through their relationships with union officials or organised crime figures.
Watson estimated that corruption-related costs could have added as much as 15 percent to the Big Build, a potential $15 billion burden on taxpayers, although these figures remain unverified.
