Tunnelling on Sydney’s M6 motorway is to restart two years after sinkholes halted excavation.

The NSW government and Transport for NSW have reached an agreement with the Stage 1 consortium CPB/Ghella/UGL (CGU) to resume immediately all work required to complete the project, under the terms of the original design and construct contract. CGU will absorb the cost of completing the tunnels.

Tunnelling on the 4km-long twin tunnels stopped in March 2024 after the two incidents of subsidence. The incidents prompted a design review but in May 2025 CGU walked away from the project, citing unexpected tunnelling conditions.

In July 2025, CGU agreed to complete surface works.

In March this year Transport for NSW issued the consortium with a default notice.

Transport for NSW says it has been negotiating with the consortium in good faith for more than two years to get the project back on track.  

The agreement also means Transport and CGU have reached a consensus that there are viable technical solutions to complete the remainder of the project.

Around 90% of tunnelling and close to half of the tunnel fit-out have been completed for M6 Stage 1. Only 250m of excavation of the main tunnel remains.

Under the agreement, CGU has also agreed not to pursue contractual claims against Transport or the NSW government for costs related to the two subsidence events in 2024, and will work to rectify this area.

Transport will provide an update on the expected completion timeline in due course. The contractors have agreed to seek to optimise this delivery further as they remobilise to site over coming weeks.

The CGU was awarded the design and construct contract in May 2021 and construction commenced in February 2022.

Transport for NSW secretary Josh Murray saidCGU would now work to rectify the subsidence issues that originally paused the contract.

“While there has been a regrettable delay, the contract for the M6 Stage 1 has clear dispute resolution processes and these will be used – ending the threat of walk-offs and the need for termination – with a deed putting the interests of taxpayers, motorists and residents first,” he said.

NSW Motorways CEO Camilla Drover saidwelcomed “CGU’s decision to resume delivery of the project as per the terms of the contract”.

“We now turn our attention to building a collaborative relationship with our contractor to complete the project,” she said.