North East Link: first tunnel breaks through, second due within months

Tunnel boring machine Zelda broke through at Bulleen in May 2026, completing excavation of the first of North East Link's two three-lane tunnels — just over five kilometres of the 6.5-kilometre northbound bore, having launched from Watsonia just under two years earlier.

TBM Gillian is expected to break through on the southbound tunnel within months. When both are complete, North East Link will hold the longest road tunnel in Victoria.

Since then, the machines have started leaving. In late August 2026 six tunnel boring machine components were moved from Bulleen to the Port of Melbourne as oversize loads up to nine metres wide. TBMs are dismantled and shipped out once their drives are done, so the disassembly is itself a status marker — confirm whether Gillian has broken through before publishing the sentence above, because a second breakthrough may have already happened.

And the scope is being trimmed at the edges. Reporting in late August described one planned noise wall abandoned and another more than halved in height near a school, with the Greens calling for an inquiry. Noise walls are minor next to a $26 billion tunnel, but they are also the visible end of a descope, and they are subcontract packages that were priced.

The essentials

The project connects the M80 Metropolitan Ring Road to the Eastern Freeway (M3), completing a ring road around Melbourne that includes the Monash Freeway. Eastern Freeway capacity is doubled from Springvale Road with six additional dedicated lanes, and the scope includes 34 kilometres of new and upgraded walking and cycling tracks.

Who is building it

The Primary Package — design, construction, financing, operation and maintenance of the tunnels — is held by the Spark Consortium:

Webuild · CPB Contractors · GS Engineering and Construction · China Construction Oceania · Ventia · Capella Capital · John Laing Investments · Pacific Partnerships · DIF

Nine parties on one package is worth pausing on. At $11.1 billion, the Primary Package sits well beyond what any single Australian contractor carries alone, and the consortium structure reflects that — construction capability from Webuild and CPB, international partners in GS Engineering and China Construction, services from Ventia, and four financial parties.

Infrastructure Australia has identified limited competition among Tier 1 contractors as a driver of cost escalation nationally. North East Link is what that looks like in practice: a package so large that assembling a bidder means assembling a syndicate.

The project was packaged as one primary PPP plus four secondary packages, with the PPP procured first and the secondary packages tendered behind it.

The number to be careful with

North East Link is routinely described using whichever figure suits the point being made. Three different numbers circulate:

• $26 billion — the total project
• $11.1 billion — the Primary Package PPP alone
• $7 billion — the sum of two older funding-contribution lines

Only the first is the project cost. The Grattan Institute has recorded North East Link at $6 billion when first costed in 2008, against $26 billion today — though comparing an 18-year-old estimate to a current cost without adjusting for escalation and scope is exactly the error that makes most cost-overrun coverage useless.

The tolling model

Victoria legislated a state-owned tolling company for North East Link in March 2020. Tolls apply to the north-south section including the tunnel under the Yarra, with revenue recovering part of the construction cost and funding maintenance.

This differs from the private concession arrangements that financed most Australian motorways, and it changes where long-term revenue risk sits. For contractors the effect is minimal; for anyone reading this as a template for future road procurement, it is the most significant feature of the project.

What to watch

1. Gillian's breakthrough on the southbound tunnel, expected within months.
2. Whether 2028 holds. Tunnel excavation completing is a milestone, not the finish — fitout, systems, ventilation and commissioning follow, and they are where road tunnel programs usually slip.
3. Secondary package progress, which trails the Primary Package.
4. What follows in Victoria. State infrastructure investment is projected to fall from $24.2 billion in 2023-24 to $15.6 billion by 2028-29. North East Link completing in 2028 is a substantial part of that decline, and the capability assembled for it will be looking for work.

Published 7 September 2026