sydneycimic ltd maintained its fullyear guidance despite forgoing profit margin on a troubled multi billiondollar tunnel project in australias victoria state the engineering and construction group on friday said it had reached a settlement following a dispute over the west gate tunnel project where costs had spiraled due to the unexpected expense of dealing with contaminated soil dug out during tunneling cimic said a settlement ruled that the total contract value of the project to its 5050 jointventure with china communications construction coowned john holland had increased to 857 billion australian dollars us615 billion from an original contract value of a499 billion cimic said its jv which entered arbitration after seeking to declare force majeure in 2020 agreed to reduce its revenue from the project by a600 million and to forgo profit margin it expects the financial impact of the settlement and other project risks to be offset by existing provisions and other nonrecurring gains cimic maintained its net profit guidance of a400 milliona430 million for 12 months through december it anticipates the same figure on an underlying basis the settlement resolves a longstanding legacy issue that has absorbed significant management time and attention over recent years cimic said in a statement cimic is pleased to have achieved this settlement avoiding further potential legal and other costs while being able to maintain guidance the settlement includes victoria state contributing a19 billion and tollroad operator transurban contributing a20 billion to ensure the completion of the project cimic said tunneling work will start in early 2022 and complete in late 2025 cimic said transurban which had opposed the contractors attempt to declare force majeure said the jv had sought construction costs significantly higher than those in the settlement we recognize 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 transurban chief executive scott charlton said transurban said 3 billion of its original capital contribution had been deployed so far with the remainder and a17 billion of its latest contribution not commencing until its 2023 fiscal year the other a300 million costs relate to site activation insurance and direct project management it said