Melbourne’s West Gate tunnel project spending has blown out by $3.3 billion.

Transurban has revealed a $3.3 billion blowout in the cost of building the project, saying it is  running at least two years behind schedule because of a dispute about contaminated soil.

Transurban estimates it will cost “in the order of $3.3 billion” extra to finish the $6.7 billion project, and has called on the Victorian Government and builders to help pay for the cost overruns.

There is a standoff between Transurban, its builder CPB John Holland and Victoria’s Andrews Government on who should pay to deal with soil that contains the dangerous chemical known as PFAS. The parties are seeking to solve the issue through mediation.

Tunnelling has been held up by problems in finding a place to take the toxic soil.

Transurban wants all project parties, including the Victorian Government and builders CPB John Holland to make a “meaningful financial contribution” to reach a settlement on the soil situation.

The company has pushed back its completion date for the tunnel, saying “project completion in 2023 is no longer considered achievable … a further update on the expected completion date cannot be provided at this stage”.

Victoria’s Transport Infrastructure Minister Jacinta Allan says Transurban is responsible for resolving the dispute with its builder and holding company to the terms of its contract.

“Transurban has today told its investors that it believes it has a multi-billion-dollar problem with the contract it signed with CPB and John Holland – it's in the interests of their shareholders that they get on and resolve that dispute,” she said.

“We need an alternative to the West Gate Bridge – and that's why we've been working with Transurban to try and fix their mess, and we've been clear with them that time is running out.”